Construction business with an average check of 5 million rubles
Currently, there is a tendency towards a decrease in the number of purchased apartments in multi-storey buildings. At the same time, the popularity of private houses has increased. The greatest demand is for small cottages, which can be classified as economy class. The price for them is in the range of two hundred thousand dollars.
Today, many people choose not to buy pre-made homes. They acquire a plot of land and place an order for construction companies to build a cottage that would satisfy the tastes of future owners. In this regard, a very popular idea is building houses as a business.
Is this business profitable?
A small construction business, however, like a large one, is very profitable from the point of view of making a profit. Sometimes there are periods when you have to wait for a return for some time. Such situations arise in the case of unfinished construction.
However, as a result, all financial investments will pay off and increase significantly. The profitability of this business is in the range of fifty to seventy percent. And this is a great result. In other words, the construction business can be said more simply: profitable, profitable and cost-effective.
First of all, you need to correlate your capabilities and desires. The construction business will require significant start-up investments. Before starting your own business, you will need to draw up a business plan. The construction of cottages is especially beneficial in the construction of villages. In this case, the cost per square meter of housing is significantly reduced. But it should be borne in mind that this will require significant investments, in particular, for the acquisition of a large land plot.
Having started your own business, you shouldn't even try to immediately conquer a large part of the market. You should go from one step to another.
The problem of recruiting non-professional personnel is also relevant for construction organizations. It is important that there are no employees on the staff who will try to take out the materials or agree to "shake things up" somewhere on the side.
Careful attention to the choice of suppliers, business partners and investors will help to avoid all kinds of pitfalls. Much will depend on your business sense and acumen.
First of all, you will need to draw up a business plan. The construction of cottages in this document should be considered from the point of view of those investments that you are ready to make in your own business. In the event that significant financial investments are envisaged, it is worth opening your own construction company. At the first stage, it will be expensive, but over time it will definitely pay off.
Your business plan for the construction of cottages can also be considered from the point of view of investment. In this case, third-party companies are involved. However, it should be borne in mind that the profitability of the case will be somewhat lower.
Since its launch, Ilyas Gimadov's company has built over 100 houses and developed 88 individual projects. However, over the years of work in the construction market, there have been problems with finding qualified specialists and with the trust of customers.
Ilyas Gimadov, General Director of Khan's House, talks about the first steps in business, training of personnel in construction and market conditions in an interview with Kontur. urnal.
Experimenting in entrepreneurship
I left my native village of Kyr-Tavgildino, Buinsky district of the Republic of Tatarstan after graduation. I dreamed of studying to be a lawyer, but I couldn't do it right away. As a result, he was educated as a philologist - in 2021 he graduated from Kazan State University by correspondence. I received my second higher education, already in law, later - in 2021.
After moving to Kazan, I faced the question of employment. I didn’t work for a single day: almost immediately I decided to try myself in entrepreneurship. One business grew into the second, the money from the sale of the previous company became the start-up capital for the next one. So he developed until, finally, he found a job to his liking.
My first project, the Gif video and photography studio, turned out to be quite successful. Starting in 2021, this company still exists today. At first I did everything myself - I worked as a videographer, edited, and then I found employees. Today this business works without my participation.
In 2021 I tried myself in the car market - I opened tire fitting. This business existed for two years, but then I got tired of the niche - the business was seasonal, and the competition was very high. However, I got out of this project very successfully, having sold it in 2021. In parallel with the tire changer, I also had my own taxi service "Arzan". Ten years ago, it was a very popular business. The development of the company was hampered by the lack of capital for scaling. The company managed to sell: it didn’t make much profit, but it didn’t remain in the red either.
In 2021, I decided to return to fulfilling my childhood fantasy - building houses. I bought a piece of land, built a house and sold it at a 30% mark-up. Then he took up a new project, and so it started.
In the first year I built two houses, in the next five or six. Then people began to contact me, asking me to develop a project for them. We expanded the list of services, came up with a name, created a brand. So in 2021, my construction activity took shape in the Khan's House company, one of the most recognizable in the Tatarstan market.
Over the five years since its launch, our company has already built more than 100 houses and developed 88 individual projects, 35 of which have been successfully implemented. Today more than 130 qualified specialists work in the Khan's House company, but at the start it was the people who were the most acute problem.
Finding professionals is difficult in any industry, but workers' specialties are perhaps the most affected.
As a rule, graduates of technical schools and colleges work in construction, many have no education at all. Construction today is considered unfairly a matter that anyone can do: nothing complicated, mix cement and put bricks. In fact, this is not the case, because we build houses from high-quality, expensive materials, and their inept use can ruin both the final product and the materials themselves. Therefore, we have to invest a lot of effort in personnel training.
Is it worth starting a construction business? The answer to this question is more difficult to find than it seems at first glance. The inherent stereotypes predict that one cannot do without millions of investments. But if you show good organizational skills and the ability to negotiate, as well as develop and adhere to a clear business plan, you can open a construction company with zero investment.
Types of construction firms
In the construction industry, it is customary to divide firms according to certain qualifications, as a result of which each has its own set of functions. The following types of construction companies are noted:
- architectural design ;
- general contractor;
The latter are also divided into specialists and suppliers.
Architectural and design firms are among the elite in this field, in which the staff is recruited from highly qualified specialists with practical experience. Quite often, such companies concentrate talented architects who have advanced degrees.
Architectural and design firms are the elite of the construction business
As for the subcontractors performing the work, they can be tied to the general contractors, perform some types of work for them. But they can also work independently, performing the same work as the general contractor, but only in a much smaller volume.
Subcontractors perform many types of work: from construction to finishing
The suppliers are not construction companies, but sellers who specialize in the supply of special equipment, machinery and materials. Their main field of activity is trade.
The construction business in Russia is gaining momentum. Construction work is in high demand in the market. The need for housing among the population is growing, cities are upset, apartments are being sold, suburban residential complexes and villages are also of great interest and demand among Russians. The volume of construction of commercial and industrial real estate in our country is increasing. We also note that the profitability of a construction company with experience is quite real up to 60%, and sometimes up to 100%. The payback period of the initial investment is on average one year.
So where to start building your highly profitable construction business?
Let's start with the fact that a construction company is a serious enterprise, and before starting to organize it, accurate calculations are required, including calculations of risks and investments. As in any business, there is serious competition in the construction business (both among small and large companies). But you and I know that healthy competition improves the quality of services in the market.
Choosing a direction for a construction company
When creating a construction company from scratch, you should define a circle of potential clients, choose a niche, for example, such as finishing works of apartments or offices, or low-rise construction. There are construction firms that carry out construction, repair of premises, "turnkey", there are specialized firms that are engaged in road repair or roof repair.
The work of any company begins with the registration of a legal entity with the tax authority at the location of such a person. Registration as an Individual Entrepreneur is the simplest procedure that requires a minimum package of documents and low costs. It will take more time and documents to register a Limited Liability Company, depending on the number of founders of the future Company. Many entrepreneurs prefer to entrust the registration of a company to competent lawyers who will prepare the documents correctly and explain all the legal nuances associated with the organization of a construction company.
Joining the SRO
An important point in organizing a construction company - SRO. The Self-Regulatory Organization of Builders gives admission to most of the risk-related construction and repair work. A list of such organizations is published in the Unified Register of SROs (can be found on the Internet at the official resource), the choice of SRO by each construction company is made independently.
The following documents are required to join the SRO:
1. Certificate of registration with the tax OGRN, as well as TIN and KPP 2. Company Charter 3. Diplomas of secondary technical education and higher education of engineering staff, certificates of completion of advanced training courses. Copies of work books, employment agreements and contracts. For some employees, a certificate with a group of admission will be required. 4. Certificate of ownership of the office, or a lease agreement for it 5. Decision on the appointment of the head of the company, if the founder of the company is one - the protocol on the appointment of the head. Order on the appointment of the head 6. Extract from the unified state register of legal entities - USRLE.
The list is not exhaustive, some SROs may request additional documents.
Building houses is a profitable business. The demand for real estate is practically not decreasing, in the private sector it is even growing. The family wants to live in the suburbs, not in a human anthill.
If a small construction company operates on a stream, the business profitability reaches 30 percent. The monthly income excluding taxes will be about 2 million rubles.
For a business to be profitable, it is necessary to properly organize the workflow.
Real Estate Market Analysis
Before investing in the construction business, study the demand for low-rise housing in the nearest settlements. This will help you choose the type of activity that brings the greatest profit:
- Construction of townhouses;
- Construction of private houses for sale;
- Construction of cottages to order.
Based on market analysis, a business plan is drawn up. It must take into account the advantages and risks of building houses: seasonality, average price, financial capabilities of the residents of the region.
At the start of a business, you should not be scattered: choose a narrow niche that leads to a faster return on the initial capital.
Registration of a construction company
At first, if you have your own land for individual housing construction, you can build a building without registering an enterprise and sell it privately. The scheme will allow you to earn start-up capital. However, after the facility is commissioned and further sold, a 13 percent tax on personal income will have to be paid. Documented expenses are deducted from the total profit.
A building permit will also be required - the document is issued by the local administration.
To create house designs yourself, a license is required. The local department of urban planning and architecture handles the documentation.