How To Start a Building Company

Starting a building company can be a lucrative venture, but it requires careful planning and execution. Let us guide you through the critical steps, so you can build a thriving  business to be proud of!

 

1. Overview
2. Qualifications and CSCS
3. Pros and Cons
4. How much can I earn?
5. How much does it cost to start a building company?
6. Do your research
7. Choice of business structure and registering your company
8. Create your business plan
9. Construction Industry Scheme (CIS)
10. Marketing and Branding
11. Red tape
12. Conclusion

 

Who doesn´t love the satisfaction of seeing a project completed. Owning a building company will have you doing this on a regular basis and  there’s nothing quite like driving away from a long project leaving a happy customer behind. 

 And the good news is that it can be relatively inexpensive to start.

 

 

The construction industry is notoriously volatile with many large companies very publicly going under in recent years. This may sound worrying but small ventures do seem to weather the storm more successfully.

The whole construction sector in the United Kingdom is expected to grow to £476.6 billion by 2027. The construction of buildings is forecast to remain the biggest segment in the market at £239.4 billion! 

 

• Potential Annual Revenue: £40-56,000+
• Start Up Cost: £3,000-£10,000
• Time To Revenue: 3-4+ months 
• Annual Market Growth Rate:     %
• Best for: Hard working, outdoorsy, physically fit and self-motivated with a great eye for detail
  

 

After tough times in 2020/21 the building trade has bounced back with monthly construction output increasing by 1.6% in June 2023. This is the highest level of construction output (£15,620 million) since records began in January 2010.

Adding to this is an ageing workforce and skilled employees departing the field quicker than they can be attracted, it is the perfect time to start your own building business and fill the sector’s loss. 

 

Provide a reliable and trustworthy service 

 

From registering your company, establishing your brand to marketing your services, we’ll cover everything you need to know to help you turn your entrepreneurial talent into a successful company owner. 

 

 

Qualifications 

If you are thinking about starting a building company, you probably possess most of the skills required and have spent some time in the industry. 

A common misconception most people have about this industry is that you need to have a ton of construction experience and know-how to do everything. This isn´t so but you must have skills and/or qualifications in the areas that you will concentrate on. 

The building trade constantly needs new blood and with labour shortages continuing, starting your own business has the potential to be lucrative.

Apprenticeships are one of the most common routes into the construction industry, providing a number of advantages. Maybe this was how you trained. In general, an apprentice’s time will be divided between on-the-job training and the classroom. 

If you feel you need extra training you can do relatively short courses that will cover a range of trades. 

Take a look at the government’s National Careers Service website or their Apprenticeship site or contact City and Guilds or your local colleges for BTEC for information. 

All qualifications will help enormously when you’re starting your own business, giving potential customers confidence in your working ability. 

 

CSCS

If you are a fully qualified old timer or a newly qualified apprentice,  in order to work on a construction site you will need a Construction Skills Certification Scheme (CSCS) Card to demonstrate your competence. CSCS issue a number of cards which reflect the different occupations and qualifications in construction.

These cards provide proof that individuals working on construction sites have the appropriate training and qualifications for the job they do. Therefore improving standards and safety.

If you take on employees they should have a card although it is not a legal requirement. However, most conscientious contractors and major house builders require construction workers on their sites to hold a valid card.

 

Structure

It is very important when starting any business to decide on the scale of the business you are aiming for.

What type of projects do you want to undertake? Are you starting off on your own as a sole trader, small renovations builder or do you want to work on much larger commercial projects as a general contractor with a team? 

Can you cope with numerous projects at one time? Will you be managing your bookings/stock level/admin? 

The sole trader option is excellent for someone just starting out or on a tight budget. As you build your reputation and work for more customers, you can take on employees and advance to becoming a general contractor. 

 

Maybe you´re already a qualified, experience builder and have decided to branch out on your own or you have finished an apprenticeship and gained some experience or want to see how you could start your own business once you’ve  finished a course and got experience, we are here to help take the next steps on your construction journey. 

 

So, before you put in that order for a new cement mixer, here are some pros and cons to keep in mind:

7 Great Reasons to Start a Building Company   

• Demand: The UK has a constant demand for construction. This creates a steady stream of potential projects for construction companies both big and small.
• Technological Advancements: The UK is known for embracing innovation and technology. Implementing modern construction techniques, such as prefabrication, sustainable building practices, and digital tools, can help your company stay competitive and efficient.
• Growing Housing Market: The UK faces a continual need for new housing developments to accommodate its growing population. Starting a building company that focuses on residential construction can tap into this ever-expanding market.
• High Demand with recurring revenue: There is a constant demand for house renovation as home and property owners require regular upkeep and repairs.
• Numerous Services: You can offer a variety of services big and small by using subcontractors such as plumbers and electricians if you aren’t qualified. This allows you to cater to a diverse customer base and increase your revenue streams.
• Green Building Opportunities: With an increasing focus on sustainability and environmental conservation, there is a growing demand for eco-friendly and energy-efficient buildings in the UK. Emphasising green building practices can attract environmentally conscious clients and government contracts.
• Market Opportunities: The UK has a diverse and dynamic market, with opportunities in both commercial and residential construction sectors. Diversifying your services to cater to various market segments can help your company maintain a stable revenue stream.

 

7 Common Challenges When Starting a Building Company 

• Financial Constraints: The building industry often requires substantial initial investments in equipment, materials, and labour. Managing cash flow, securing financing, and accurately estimating project costs are critical for the success of your business.
• Skilled Labour Shortage: Finding and retaining skilled workers can be difficult, especially during periods of high demand. Recruiting and training qualified employees is essential for delivering quality projects on time.
• Competition: The construction industry is highly competitive, with many established companies and new entrants vying for projects. Standing out from competitors is essential so be original, form strong customer relationships from the start, and bring with you a track record of successful projects.
• Project Management: Effective project management is crucial for delivering projects on time and within budget. Managing subcontractors, scheduling, procurement, and quality control are complex tasks that require strong organisational and communication skills.
• Economic Volatility: Fluctuations in the economy can affect the demand for construction projects. Economic downturns can lead to reduced construction spending, making it crucial to diversify your services and clientele.
• Safety Risks: Construction sites pose various safety hazards, and ensuring a safe working environment is paramount. Failure to prioritise safety can lead to accidents, injuries, legal liabilities, and a damaged reputation.
• Seasonal Fluctuations: Weather conditions can significantly impact construction schedules, especially in the UK! 

 

The all-important question – How much can I earn starting my own building company?

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 There are many avenues for making money in construction. Ultimately, your profit margins hinge on the complexity of your project as well your ability to stay on time and within budget. 

How many hours, where and when you work will determine your income. This is effected by what type of services you offer and if they are different to your competitors. 

The average yearly earnings of a builder in the UK can range from around £11,063 per year for an apprentice, up to £56,833 per year for a business owner. Your earnings will depend on your experience, skills, qualifications, the type of work, and where you live/work.

 

How much does it cost to start a building company?

Costs can vary greatly, one of your main expenditures is your vehicle. This could be new, second hand or leased.

If you are setting up your own building company you probably own a great number of tools already. Always try to invest in good quality tools, in the long run these will be more cost effective. 

You are looking at a minimum of £1,500 – 2,000 for basic start-up tools. Consider renting larger items such as a cement mixer or grinder if you don’t own them already. Then when your finances allow, you can invest in the more expensive items. 

With the repair, maintenance and improvement sector growing faster than the house building market, your customer database could be varied, from building conservatories and fitting a kitchen or tiling a bathroom in a residential home to adding extra seating space in an expanding restaurant. 

Contact local landlords or the local council for any work contracts in your town and surrounding areas. Let them know the kind of construction services you offer. 

Keep your eyes open for new builds in your area. New housing estates are a great place to advertise your business you´ll have a fresh supply of new customers who will inevitably need you soon!

 Also, have you thought about premises and storage or will you be able to store tools safely at home? 

 

Do Your Research

To be successful in the building business you´ll need to do your research and decide what you´d like to concentrate on. 

Could you offer something different and exploit an untapped market? 

Most people who venture into the building trade target standard customers for standard jobs.   

How about focusing on – 

Green and sustainable construction

A fast growing interest in sustainability means this first trend is here to stay. Provide your customers with environmentally friendly products like solar panels, heat pumps, eco-friendly insulation, and water-saving fixtures. Construct buildings to the BREEAM (Building Research Establishment Environmental Assessment Method) certification mark. 

Prefabrication and modular construction

In recent years, prefabricated and modular construction has gained immense popularity worldwide, although currently still in its infancy is the UK.  It is being considered a solution to the UK´s growing housing crisis. Faster built and more energy efficient buildings are built off-site and then assembled on-site. 

If predictions are accurate, modular buildings could constitute as much as 75% of construction by 2050.

Smart buildings and home automation

Automated security, lighting, heating, and entertainment are all part of the rapidly expanding smart home movement. Most aspects of a customer’s house can benefit from these smart solutions. Get in on the action now! 

Insulation and Sound proofing

 A growing industry fuelled by the increasing demand for energy-efficient buildings and the need for noise reduction in both residential and commercial spaces. Using the latest technology and sustainable, environmentally friendly materials can be a great boost to your skill set. 

 

How I’d set this business up.

So, here’s how I’d make sure you build on your successes! 

Choice of business structure

Anyone who sets up a new company should have a business plan. Ask yourself “What is my ultimate goal and how am I going to achieve it? “ Think organised, efficient and productive. 

 

A strong plan is fundamentally important when you are setting up any business. As a solopreneur, you can start this business as either a sole trader or a limited company. 

I’d also strongly consider a hybrid start up structure where you can reap the benefits of both structures with minimal cost and risk.

This could enable you to start trading with the simplicity of a sole trader but also have secured the limited company for marketing hacks and saving tax later if you decide to incorporate your business.

Have you thought about a company name yet? Use our FREE Company Name Checker Tool and find your perfect name. You’ll be searching through a comprehensive database of over 5 million registered company names and more than 11 million UK domain names.

 

 

Business plan

Start by formulating a business plan. This will help to focus on delivering a clear message to your potential customers. 

There are different types of business plans. (But you can use my 1 page business plan here) It’s designed to cut the waffle but has enough detail to make it a meaningful tool so that you remain laser focussed on what needs to be done when you set up this business.

 Hold yourself accountable!! 

If you are unsure what to do at this point I recommend seeking professional advice. My team is available to talk you through this in a clear and concise way you will understand.

 

We also need to mention the Construction Industry Scheme (CIS)

When you start a construction company, the law requires that you register it under the CIS. This is a payment handling system that ensures that payments are being handled properly by contractors and subcontractors.

To complete this step, submit:

• the business name
• your National Insurance number
• the company’s unique taxpayer reference number
• your value-added tax (VAT) identification number (if applicable)

For more information and to register see the Construction Industry Scheme Government Website 

 

 

How to Market a Start Up Building Company.

This is a business that I would definitely want to fast-track from the beginning for growth. You want to get busy as quickly as possible and there is only one real way to achieve this.

Most buyers/potential clients for this service are going to find a builder using a Google search. Sure some will use an app, some might ask for a recommendation on social media but MOST will look on Google.

Google knows that when someone is looking for a builder, they want to see results close to where they are located.

This usually means that Google will show a maps listing at the top of the search results like the image below.

 

 

If your business shows up here then you are right at the top of the search results, under the nose of people who want to find a building company.

For any type of business/search term where Google shows a Maps listing like this , I describe these businesses as having “high local marketability”.

High local marketability means if you know what you are doing and tick the right boxes with Google you can get a lot of business enquiries very easily.

 

So if potential customers can’t find you on Google, they won’t be calling you. And guess what? That means someone else has picked up their trowel and that customer and you’re missing out!

 

 

So how do you dominate Google search results for this business?

You have to optimise for the Google maps listing.
How do you do that? 

 

Follow these 10 simple steps to marketing a building company:

1. Get a website. Make sure it complies with Google’s best practice guidelines.
2. Get your new website in Google so clients find YOU.
3. Provide LOCAL PROOF. Use a local phone number and a mobile to tell clients and Google you are definitely a local business.
4. Provide SOCIAL PROOF. Show reviews from real customers on your site. This is called “social proof” and turns browsers into customers!
5. Use LANDING PAGES. A landing page is optimised for a specific search term making it rank higher than your competitors. Landing pages are for people who want to buy your service now. They show the client what they want to see.
6. Provide great CTA’s (CTA =call to action). Make it super easy on your website for clients to get in touch with you by including features such as a messaging/chat app and CTA’s that show clients exactly how to contact you.
7. Share FEEDBACK. Go the extra mile to provide an outstanding service and you are sure to collect plenty of positive feedback from clients. Ensure you harness this by collecting reviews from every new customer.
8. AUTOMATE – You won’t have time to be manually updating your website. Make sure you automatically show the new reviews on your website, driving more clients to your business.
9. PROMOTE – Regular updates to your website and using Google tools will give your website an extra edge.
10. MAINTAIN – From time to time websites need technical maintenance to the software they run on to keep peak performance.

 
Most building businesses DO NOT invest enough time and money to execute this simple marketing  strategy providing you with the opportunity to step in and DOMINATE in the local search engine results.

 

 

Live Chat Function

This is great as it gives your potential customers a “one click method” to message you straight from your website – you get the messages on your usual Messenger account, This is probably something that your competitors won’t have and we’ve had clients getting great success using this tactic. Make it easy for your potential clients to get in touch with you. 

 

 

Still confused? We can create a personal website for you to get you off to the best start. 

 

Always ask for references and reviews on your website and apps. This is so important for new customers looking for a reliable company. 

Google reviews, testimonials and recommendations are essential. Potential customers WILL check for reviews when they are searching for a service, product or trade. 

Look for positive feedback from other successful building companies. If customers are giving great reviews about precise price quotations and regular communication from their builders, this means that in order for you to get favourable feedback, you need to be on the ball and do the same but better! 

This is difficult when you first start out and asking can be uncomfortable but a happy client will want to help you up the ladder every time.

 

 

 

 

Here are 8 great tips to help you market your building company effectively:

Promoting your business is crucial to attract new customers and grow your business. 

 

• Do your research

The construction world is super competitive, so it’s important to research your competitors in the local area. Examine their websites and online presence. Identify what you can offer that others don’t. This will help you differentiate your business and attract more customers.

Ask people in the local area what service they would like to see. Are they having trouble getting a good bricks and mortar builder or do they need more tilers and plumbers?

• Create a great company and domain name for your website

Choose a name that is related to you and your business and is memorable for your potential customers. Remember to steer well clear of similar sounding names so confusion does not occur with other companies. Our Company Name Search Tool will help you stay out of trouble! 

 

 

We can quickly and easily help you get the ball rolling with this, registering your company and domain name and even providing you with fully featured business email boxes making your business look more professional, adding credibility when you are approaching new customers. So instead of emailing from an @yahoo or @hotmail address you can be emailing from @mycompanyname. Doesn´t that look better?

 

You will then have to register a domain name for your website. We all know websites are crucial nowadays so make sure you get yours registered as soon as you have chosen your trade name. Take a look at our Domain Name FAQs which will explain why a domain name is so important to getting your business up and running.
Use our simple to use domain checker and let´s get you onto the world wide web!!  

 

 

• SEO

Search engine optimisation is the art of getting your building company’s website to the top of the search results on Google and the other search engines so that you have the best chance of getting their business. 

If you’re new to running a website it’s easy to get caught out with a low cost SEO service that just doesn’t work.

We can help put together an affordable SEO package and we’ll always tell you what we are going to do and what results you might expect to achieve.

 

• Create a website

The site must also give lots more information about the services you offer, the area you cover and if relevant, any fixed rates you offer. They are also essential for contact purposes, online bookings and enquiries. 

Here you can introduce yourself and give your customers a little background info.

A little information about yourself can make the business more personal and boost customer confidence. 

Your website is a great place to showcase your skills. Plenty of before and after photos and videos will give a potential customer a feel for your work standards.

 And don’t forget to add all reviews and comments to your website – I can’t stress highly enough how important reviews are. 

We all rely on those Google reviews and recommendations when we need a service, product or trade, so make sure they are clearly visible on your site. 

Unsure where to start with a website? Just ask us. We can help you create a website that will attract new customers and boost your local marketability .

 

 

• Word Of Mouth and Networking

  
  are powerful and effective marketing tools and should never be underestimated! Customer service is king.

A lot of your business will come from clients recommendations. Make sure these reviews are on your website and monitored frequently.

We have already mentioned this (a lot!) but it is vitally important.

Always ask for References and Reviews on your website and apps, this will boost your online presence rating. 

Start with your friends and family if you have worked for them. 

It’s very common to work with other professionals in the building industry. Do you have links already to plasterers, painters/decorators and electricians? If you aren´t qualified to tackle a certain aspect of a project make sure you have high quality, reliable subcontractors you can work with. 

How about contacting local estate agents! House buyers always want to put their stamp on a new house.

These are all important mutually beneficial relationships. 

 

Ask if you can leave your cards or leaflets in bars, supermarkets, DIY and hardware stores etc. 

Make sure you have any additional services mentioned on them. 

How about creating a marketing material for local businesses! For example, you can create beer mats that can be placed on bar tops. Potential customers will surely have a look, and you might end up building a bar in a garden!

If you start to employ more builders, collect customer feedback. Customer engagement and customer retention really matters, get in touch with your customer and listen to their views. This will also really help you to create trust among the customers.

Trade fairs such as UK Construction Week, the UK’s largest construction trade event are perfect places to network.

 

• Design an eye-catching logo

Your logo is an important aspect of your brand identity, so it’s essential to design a logo that represents you and your business and can be used everywhere, including your workwear, vehicle, business cards and leaflets. 

Have you thought about adding QR codes to your marketing material? 

With a click of their mobile phone, customers can fill out a request form or write a review by using a QR code.

Add a QR code to your works vehicle, magnetic signs are perfect for this.  Potential consumers passing by can immediately scan for further information about your services. 

QR codes are perfect for business cards, giving website links, tips on maintenance or basic DIY. They are also an easy way to get that all-important customer feedback and can be added to invoices and receipts that go directly to your review page.

 

• Use Social Media

Why would a building company use social media?

Social media platforms such as Facebook, Twitter/X, Instagram and TikTok  can be powerful marketing tools for your building company. 

Shout out loud what makes your business unique! Whether it´s using eco-friendly materials or having a 24 hours emergency service.

Whatever if it is, make sure you are getting the word out there. 

Join local business Facebook groups or similar platforms to promote your business and connect with potential customers. You will have to be active to beat off the competition from the construction giants out there.

You can also create social media pages for your business and post regular updates, photos and promotions to attract more customers. 

Running competitions on social media is a great way to create more business. Remember to make it simple and quick to enter. Maybe vouchers for a local DIY store?    

Remember not everyone uses social media, so stay visual in your area with leaflets and posters too.

Also join online directories, many people rely on them for finding tradespeople. 

 

• Use apps and software

There are many apps available that can help you manage your business more efficiently. They can be used for booking, saving customer details and receiving payment. 

Project management software will be vital especially as your business starts to grow. Companies such as Asana, Clickup, Monday.com and Zoho all offer good packages that will help you take control of your business and keep those projects running smoothly. 

 

By implementing these marketing strategies, you can attract more customers, improve your brand identity, and grow your construction business.

 

Other formalities

 There are other formalities that you will need to complete before you can start trading successfully.

Health and Safety 

There is no other industry that performs the majority of its projects in public places and exposes its employees and the public to the dangers such as falling objects, transportation accidents, lifting operations etc. 

There are basic Health and Safety standards that apply to all companies and industries (including construction), but there is additional legislation focused especially at the building sector. 

It is vital that both you and any employees you work with are fully aware of the construction health and safety regulations. 

Some of the most important regulations are the

• Working at height regulations
• The lifting operations and lifting equipment regulations
• The control of noise at work regulations

Many short courses are available throughout the country, so make sure you and your staff are up to date on training. 

For more information see the government HSE website Contractors: roles and responsibilities

 

Building Regulations and Planning Permission

Building Regulations apply to the vast majority of building projects in England and Wales, as well as many renovations to existing buildings, whether for residential, business, or industrial purposes. This is required by law.

Changes have taken place recently to help the UK deliver net zero by 2050. 

Under the new regulations, CO2 emissions from new build homes must be around 30% lower than current standards and emissions from other new buildings, including offices and shops, must be reduced by 27%.

Make sure you have a good understanding of the current building regulations. Many training companies offer CPD (Continuing Professional Development) training on the Building Regulations.

To find out if your project will need planning permission, contact your local planning authority (LPA) through your local council.

 

Open a bank account

You need a separate business bank account for your business whether it’s a sole trader or limited company.

Keeping your personal and business finances separate is crucial for several reasons. It simplifies accounting and bookkeeping, making it easier to track business expenses, income, and tax obligations. It also helps demonstrate financial transparency, which can be important for legal and tax purposes.

How about a  contactless card payment machine? No carrying lots of change around with you all day. There are plenty on the market now and easy for you and your customers to use. 

 

 You will need Insurance.

There are lots of companies offering their services so have a good look around and take their advice. 

Public liability insurance is crucial to protect yourself and your customers, providing cover against injury or accidental damage to their property. 

If you employ someone Employers’ liability insurance is essential to cover any injury and illness sustained whilst whilst being employed by you, 

Then there is insurance for your equipment and tools, protecting you from theft, damage and loss. Construction sites are regularly targeted, a Chartered Institute of Building survey reported that 92% of construction companies claimed they are directly affected by petty crime and 21% revealing that their sites are robbed on a weekly basis. 

Make sure your insurance company knows your vehicle is a works vehicle. Theft of tools from vans averages out at 20,000 cases  being reported to police each year so make sure you´re covered. Your eye-catching logo and your contact details must are prominently displayed!

Some of your work may require a highway or pavement licence, these are available from the local council in the area you are working in. Always apply for your licence well in advance of the work start date and make sure all licence requirements are met before you start. 

Do your homework and contact your local council and government websites for more details on other required licences.

 

Stay Safe

Belonging to a trade association or union is always an excellent way to show your professionalism. Make sure this is shown on ALL your marketing materials.  

Gaining a trade certification from the Federation of Master Builders (FMB) is invaluable showing clients your standard of work. All potential members  must complete an evaluation and inspection procedure before they can show the FMB badge. 

Other organisations such as the National Federation of Builders (NFB) and  The Construction Industry Council (CIC) also give kudos to your business. 

Other industry bodies include the Guild of Master Craftsmen, National Institute of Carpet & Floorlayers, The Cavity Wall Insulation Self Certification, National Inspection Council for Electrical Installation and many, many more.

 

Conclusion

 

Starting your own building company can be a lucrative and rewarding venture. It is a great way to enjoy the outdoors, stay fit and active and meet new people. With property development continuing to grow, it is full of opportunities, you can keep it as a small enterprise or expand with time. 

You do need to have knowledge and experience, as construction work is a specialist business. It can be a very technical job with high health and safety risks so adequate training is required for all employees involved in the business.

The construction industry has seen many advancements in technology, such as improved safety features and digital tools for project management and inventory control. Make sure you stay up to date with these new technologies as they can enhance your efficiency, productivity, and competitiveness. Continually educate yourself and your employees. 

As you embark on this entrepreneurial journey, it’s essential to remember that running a building company comes with its challenges and requires a combination of industry expertise, strategic planning, effective management and a strong commitment to quality and customer satisfaction.

However, with passion, hard work and a commitment to excellence, the rewards can far outweigh the difficulties, making it a highly rewarding endeavour.

 Who knows what you´ll build next! 

Find out more today and let´s get your new business off to the best start!