Guides to start a business in construction or real estate

Entering the world of construction and real estate offers exciting opportunities for growth, financial independence and community development.

Whether building homes or commercial properties, renovating homes or facilitating property transactions, construction and property businesses play a vital role in shaping the built environment and meeting the diverse needs of homeowners, businesses and investors.

By setting up your own construction or property business, you have the opportunity to make a lasting impact on your community while pursuing your passion for building, investing or customer service.

A business plan is a written document that sets out the commercial, operational and financial objectives of a business and explains how it's going to achieve them.

To put it simply, it consists of two distinct parts:

• A written part that presents, in detail, your project, the team, your business strategy, and your medium-term objectives.
• A financial forecast that highlights the expected profitability of the project and the funding requirements.

The absence of a business plan is one of the main reasons why more than 50% of new businesses fail within five years. If you are setting up a construction business, drawing up a business plan is essential to reduce the risk of your project failing.

Most financial partners (banks and investors) also require a business plan before granting finance. It is therefore strongly recommended that you write a business plan if you are seeking a loan or capital to finance your start-up.

To put it simply, it all depends on where you set up and what kind of construction or real estate business you are planning.

The cost of setting up the business itself (incorporation, legal fees, etc.) is generally fairly modest, although it varies considerably from country to country.

Initial investment and working capital requirements in the construction and real estate industry vary significantly depending on the type of business.

Consider this: launching a small masonry business might not need much upfront, mainly just buying tools and a work vehicle. But if you're diving into real estate development, especially focusing on big residential or commercial complexes, you're looking at a hefty initial investment. That includes buying land, covering design and permits, and handling construction and marketing expenses for those early projects.

There's only one way of accurately estimating the cost of setting up your own business: you need to draw up a financial forecast. And there's no better way than to use The Business Plan Shop's online financial forecasting software.

Before starting a construction or real estate business, it's essential to take a number of factors into account.

This includes market research to assess local demand, competition, regulations and industry trends. It is also important to choose the right legal status, understand legal and tax obligations, and plan for risk management and safety on construction sites.

The qualifications and diplomas required to set up a business in the building and civil engineering or real estate sectors depend on the country and the specific type of business.

In many cases, certifications, licences or qualifications in fields such as civil engineering, architecture, project management or real estate may be required.

The main sources of funding include:

• Government grants, loans or subsidies available for start-ups.
• Investments from private investors or venture capital firms specialising in real estate.
• Banks or financial institutions may offer business loans or lines of credit.

Companies in the construction and real estate industries are often faced with challenges such as fluctuating material prices, fierce competition, project delays, managing costs and deadlines, and regulatory compliance.

To meet these challenges, it is crucial to put in place effective project management processes, keep a close eye on budgets and schedules, invest in staff training and maintain transparent communication with customers and stakeholders.

What's more, keeping up to date with technological advances and industry best practice can help you stay competitive.