Construction business

How to start and scale a small construction business UK

10 May 2023

Getting into the construction business can be tricky, but the rewards can easily outweigh the struggle.

why start a construction company?

The UK construction industry is one of the largest industries in the country. Recent studies found that it contributes a yearly income of £110 billion to the UK economy. With such a large margin for profit, and no shortage of business, the idea of running your own company and being your own boss is completely plausible and doable.

The construction industry is always ready for new businesses, but knowing the right tactics, plans, and resources available to you can hugely improve your chances of success. Construction companies come and go, but those that do their research, know their market, and plan their future manage to conquer the construction business market and take full advantage of the wealth of work available.

In this article, we are going to explore everything we know about starting your own construction business, and what you need to know to make it go from an idea to a fully fledged concept.

Construction worker

How to start a construction company: in 9 easy steps

Obviously, starting your own construction company is no easy task. You need a business plan, good market research, a strong network and team of helpers, and good contracts and equipment.

It takes time and dedication to run a successful business, but with these 9 steps, you should have a better idea and structure for moving forward with your own construction businesses.

1. Research your target market

This is key, and really lays the foundation for a construction company. Ultimately, construction services can only succeed if the business idea has a place in that economy. For example, running a landscaping company in the centre of London would be pretty tough, garden space is more limited, so your market would be slim and the competition would probably be very high with established companies already dominating the limited market.

Local construction companies survive by knowing their market, being a part of the local culture, and offering great services that can compete with bigger entities. Hence, you need to know your market, know the competition, and know what you can offer to your market that sets you apart.

2. Develop a solid business plan

Know your market? Know what you bring to the table? The temptation to pick up your tools and get cracking is understandable but take your time to fully compile your market research and determine the profitability of your business idea. Experts say actually writing a business plan makes you 250% more likely to start a business.

This foundation can be the difference between failure and success when it comes to starting your own construction company. Develop a good business structure and hold yourself accountable.

Construction boss

3. Develop a marketing strategy

Alongside this business plan should be a marketing strategy. You need a viable plan for getting your name out there into the world. Are you going to use social media, paper based adds, emails, or something else? Knowing your market can hugely help your marketing strategy as you can target your demographic with specific adds.

Obviously, it can be tricky to learn marketing skills or tactics such as this if you have never done it before, but you would be surprised at the amount of tips you can find online to help with this. Do some research and do the best plan for you and your new construction company.

Look at how peers are doing it and ask yourself, how can I do it better?

Make changes

As your company develops, you will want to adjust the marketing plan. Customer testimonials and reviews are huge for the construction industry, so think of ways in which you can encourage customers to like your pages, leave reviews and add testimonials.

You can promise the world to customers, but until they see proof that you are able to carry out the service you provide, you may struggle to close deals.

4.Register your construction company

Once you have your business plan in place, know your market, and have an idea of how you’re going to promote your services, you then need to actually register the company.

Submitting the business as a limited company helps you to separate the financial affairs from your own. Keeping your personal and business finances separate protects your personal assets and allows your company to be legally recognised.

Now all the planning is done, it’s all about making it happen.

5.Register for the Construction Industry Scheme (CIS)

You will then need to register the company under the CIS, this is a legal requirement for building companies. This is to make sure payments are being handled properly by contractors and subcontractors.

6. Grow your network

Now that your company is registered and you have your plan in place, you need to start establishing a network. Understanding what other companies you can work with that maybe offer services that you could benefit from is key, knowing where you can find potential business is also essential.

Growing a good network can help to give you that early push.

7. Hire employees or contractors

Once you have all the aforementioned factors in place, you need to start building a team to complete the jobs you’ll start to take on. You want a reliable team that have the skills needed for the potential jobs you have in mind.

You might just want a network of contractors or you may want to hire fulltime team members, work out which is the most financially suitable for your goals.

8. Look for clients and construction projects

Now you have the business plan and the team, you need to start taking on jobs. With all the previous market research, networking, and planning, this part should be a lot easier. You should already have your clients in mind at this point, now it is simply about making it happen.

Just don’t be put off by the word no, you’ll get a lot of people turning your offers down. Remember, other companies will be offering the same services, and they could already have a good word of mouth presence in the area.

Until you have a few jobs under your belt, it might be tricky acquiring the first few customers. Have patience and stick to your plan!

9. Purchase or rent equipment

Got your first few job offers coming in? Well, now you need the equipment for your team to use. For bigger companies, it works out better to buy the equipment outright, but for a smaller new construction company, hiring equipment is essential.

Obviously, some foundational pieces of equipment will need to be purchased for day to day tasks, but for more specific equipment that might only be needed for one job, then hiring equipment is a great option.

Companies such as us here at PAL Hire, offer you with a full range of construction tools and equipment. From full site setups to specific niche tools, we can sort out everything you need.

Hence, if you feel hesitant to take on a job because you feel you’re lacking the equipment needed for it then one simple phone call to our team could change that.

Working with PAL Hire could be the difference between taking on two new contracts or none, we can help you to have the tools you need to always take on any contract thrown your way.

Construction company uk

Know the legal requirements

You could start a successful construction company and totally miss one of the many necessary legal requirements and have your company harshly penalised, and in the first few years that could be detrimental.

Know building regulations, health and safety regulations, insurance, and other requirements are needed from your company to conduct business. As a business owner, you’re expected to know this, so reach out to others in your field and ask for help.