India is one of the fastest-growing economies globally. Some reports suggest India will be the world’s second-largest economy by 2075. Naturally, such growth brings with it the need for a solid, well-developed infrastructural system. Any entrepreneur wondering what to venture into next might want to consider opening a construction company. The Indian construction sector was worth $701.7 billion in 2022 and is set to grow at an average annual rate of more than 6% between 2024 and 2027.
If you are considering starting your own construction company, here are the steps you need to take.
- Market Research and Business Plan –
Before even considering starting the legal process of starting your construction business, make sure you have a solid plan in place. Research the area where you want your project to be, find out if there is any gap in the market and try to fill it. Plan ahead for any obstacles that may arise. Finalise a budget, short and long-term goals, target audience, and procurement of raw materials. Be well-versed with all the rules and regulations that apply to your market. Know what are the upcoming projects in the area. These plans will prove to be the foundation for your business.
- Licenses and Registration –
As a construction company, getting registered legally is perhaps the most important step. Without this, anything construction could be considered illegal. Under the Companies Act 2013, companies can be registered as public limited, private limited, sole proprietorship, partnership or limited liability partnership with the Ministry of Corporate Affairs (MCA).
This needs to be followed by Salex Tax and GST Registration along with PWD License, TIN No., and EPF registration. A company bank account also needs to be set up.
- Infrastructure and Workforce –
Construction companies require dedicated offices to plan, strategize and develop new properties as well as display the models for their properties. A corporate office is also required for any registration and legal paperwork that may arise. Also, arrange for transportation services needed to carry raw materials to and from the construction site.
Also build a strong network of suppliers, contractors, builders, brokers, independent contractors, subcontractors and other such professionals who will support and promote the business. Take care to maintain these relationships long term as they will aid with business expansion. There will also be a need for trained professionals like architects, marketing professionals, etc
- Securing Funding –
A construction company requires a large initial investment. Additionally, petty cash will be needed for the day-to-day activities of the business. To meet these needs, you can opt for business loans.
- Getting Insured –
Construction companies are high-risk, high-reward businesses. To manage these risks, make sure you are properly insured against any calamities. Also, insure your workers to protect them in case of any accidents or disasters. This will drastically reduce the financial risk of running a construction business.
Even though this sounds easy, please keep in mind that starting and operating your own construction company is a long-term process which will require a great deal of hard work, commitment, and perseverance. For examples of projects by successful construction companies in India, visit – https://www.shapoorjipallonji.com/
