Things To Consider Before Starting A Construction Company in India

If you are pondering how to start a construction company in India, then you are not alone! Starting a construction company at this pace of urban development is one of the most profitable businesses to pursue. But clearing the pathways to reach your goal is not an easy task in India. You need experience, research, paperwork clearance, and so many more formalities. If you have the passion and know-how to position your business in the current landscape, then this niche is the best venture to explore.

Construction is one of the most prominent industrial segments in India and has contributed about Rs. 2.7 trillion to the GDP in 2019, as per Statista reports.

Go Textfile team is here to explain how to start a construction company in India and help you in this journey.

1. Licence and Permits

First thing first! Before commencing a construction company, you need to make sure you have applied or obtained a licence. Despite other businesses, the construction business is different. Hence, certification and capital requirements are necessary to invest in a construction company. You can visit the council office for permit details and required papers to get your licence. Permit requirements of different locations are different. So, it is crucial to research how to start a construction company in India before the first leap.

Construction businesses can register as the following types of entities:

• A private limited company or
• Public limited company or
• Sole proprietorship or
• Partnership firm, or
• Limited liability partnership.

You also need to register for Sales Tax and GST once you have secured the permits. You also need to obtain a TIN Number, PWD License, Business bank account under the company name, and EPF (Employee provident fund) registration if you plan to hire more than 20 employees.

2. A structured business plan

Knowing every knick-knack of your construction business is the only way to survive it. If you are wondering about how to start a construction company in India, here is the best tip! Study and research your construction dreams. You need to be aware of the nature of this business, the investment required, location, your clients, a deep analysis of the raw materials required, cost, staff, and all other vital things that are unavoidable in this business. Other than this, you should also have a well-structured plan on the marketing strategies and promoting techniques you will adopt for the company.

Marking a clear boundary of your target audience and studying the essential requirements for your location is also important. You can have a commercial or a residential company. Depending on the background and conditions of the client, you can set the goals. Selecting the location is key to getting better business. The site you choose to set your business office should be conducive for your customers and match your business plans. If you already own a company headquarters, then refurbishing it can be an option to accommodate more staff and clients. The definitive reply to such question of how to start a construction company in India is simple - set a professional office that attracts customers.

3. Networking and Workforce selection

Networking is the next step of action. It is the primary thing that can accelerate and sustain your business. You need to gain the attention of good dealers and build a healthy relationship to make an active community. Gaining new contacts and referrals depends on the visibility of your company. Particularly if you are unsure how to start a construction company in India, expanding your business sphere by establishing a mutually beneficial relationship can facilitate the necessary support.

To get this support, you need to build trust. You need to invest time, dedication, and energy in this active networking. With a good reputation comes trustable partners. By making a highly influential network, you are guaranteeing continual business growth. It can open infinite opportunities for new ventures, business partners, client leads, and many more. Attending business luncheons, high-profile business meets, and conclaves are some effective ways to grow your business as well as your network.

When you think about how to start a construction company in India, you also need to include workforce selection as a priority in your plan. The foundation of your construction company depends on the employees that you hire. You can find the right people through trustable brokers, subcontractors, independent contractors, mediators, or hire workforce through job portals.

4. Equipment purchase

As a construction company, you need expensive types of machinery and appropriate funding for this equipment. You should also be aware of the availability of quality equipment, trustable suppliers, and research about essential machinery requirements. For instance, you need wheelbarrows, ladders, excavators, and so on. You can also rent or lease equipment if you do not have the necessary funding for new purchases. Since the market is unpredictable, renting becomes a viable option in today’s market. Before taking steps on how to start a construction company in India, you should be aware of the renting formalities and the nature of this market.

5. Insurance cover

Construction needs huge workforce and investment for starters. You are operating with highly dangerous machines, and your workforce are working in a risky locale. Slight negligence can result in high costs. Accidents are not new stories on a construction site. Anyone can get injured, people can die on the site, or your machiners can have irreversible damages. Even an unhappy client can file a lawsuit against your company. It can be minor things such as vandalism or theft that can make you end up in court. In that case, insurance cover can give you boundless relief. Insurance covers your company owner, workers, tenants, subcontractors, partners, and sole proprietors. Lack of insurance makes you solely responsible for the event.

In case of accidents, the construction company is responsible for paying compensation and medical treatments. If you have insurance cover, then you can get financial assistance in these unfortunate incidents. Insurance covers the following construction process,

1. Personal accident insurance
2. Employers liability insurance
3. Public liability insurance
4. Contractors all risk insurance

How to start a construction company in India? We have a solution!
This question does not have an easy-peasy answer. Despite it being the most rewarding business, it also has the most failure rate. Each initiative in a construction business needs precision and deep knowledge. You need to have thorough research and expertise to succeed in this business. So, here is the good news! You don’t need to get frantic about the unending formalities and tax concerns before starting your construction business.

Entrust Gotaxfile for masterful assistance!

Gotaxfile can pitch in and back you with years of experience and acquaintance in this field. We have a professional team that can take care of your certification and other legal procedures within a stipulated time. We will watch your step in your journey of obtaining permits, tax registration, insurance, finances, and all your queries. So if you are still pondering over how to start a construction company in India, contact us and get it all done within a matter of time.