How to start a construction company

Working as your own boss in construction can be lucrative and fulfilling, with potentially high levels of job satisfaction from seeing the results of your hard work.

With the construction industry predicted to grow by 7% in 2025 and new laws to prioritise the building of new homes, it could be a good time to start your own construction business.

You could do this either as an independent contractor or as the owner of a construction firm.

While the industry is heavily regulated and requires skilled work, it presents a good opportunity to be your own boss if you have the necessary skills, experience, and a solid business plan.

This guide walks you through the essential steps to launching a construction business, from initial planning to securing funding and understanding legal requirements.

What skills and experience do you need?

If you’ve previously worked professionally in construction, you should have the necessary skills to start your own construction business.

Experience in the industry is invaluable – from understanding project management to ensuring health and safety requirements are met.

Although no mandatory qualifications are required to start a construction business, specific roles within the industry, especially those involving safety-critical tasks, may require specific certifications or qualifications.

You may wish to consider the following to enhance your knowledge, particularly if you don’t have past construction experience, through schemes such as:

• NVQs (National Vocational Qualifications)
• City & Guilds qualifications in construction
• construction management qualifications from universities
• certification from the Chartered Institute of Building (CIOB)
• training approved by the Construction Industry Training Board (CITB).

You could also consider joining an apprenticeship scheme to earn while you learn before becoming your own boss.

Other qualifications to consider, especially when operating and being the legally responsible person for building sites, are:

• The Federation of Master Builders (FMB) – a trade accreditation demonstrating the necessary skills for construction projects – you must pass an assessment and inspection process to qualify.
• Construction Skills Certificate Scheme (CSCS) – while not a legal requirement, a CSCS card is often needed for working on construction sites.

Running a successful construction company requires more than just building skills.

General business and soft skills can help your start-up thrive.

These might include:

• good communication skills for dealing with clients and suppliers
• organisational skills to keep projects on track
• numeracy skills to manage invoicing, payments, and profit forecasting
• project management skills, such as strategic planning, problem-solving, and adaptability.

Find out more about the skills you need to run a business.

Define your construction business

Decide on the type of construction business you want to start.

For example, will you focus on:

• residential projects – such as building homes, extensions, or blocks of flats
• commercial buildings – such as offices, shopping centres, and hotels
• infrastructure work – such as roads, bridges, and utilities.

Your choice will influence your business plan, marketing strategy, and the skills you need to recruit as you grow a team.

Research potential customers

Thorough market research is critical to understanding the demand for construction services in your area.

It can help you make considered decisions and avoid costly mistakes when launching your business.

Conducting thorough research means identifying your target market, analysing competitors, and looking for opportunities.

Consider a number of key areas for your market research:

• local demand – assess local competitors to determine demand for construction services in your area. Look at what they offer, their prices, and how you could differentiate your business
• potential customers – what do your target customers need, what options are currently not available to them (so you could fill the gap), and typical customer preferences
• emerging trends – this might involve research about the latest developments in your sector, health and safety practices, sustainability and new materials, and new regulations that might affect your business.

Learn about market research techniques.

Create a construction business plan

A business plan is essential for outlining your business objectives and how you plan to achieve them over a set period.

It acts as a roadmap, guiding you on structuring, running, and growing your business.

A well-crafted business plan is also crucial for seeking external funding or partnerships.

There are several key areas you must outline in your construction business plan, including:

• a description of your construction business
• your construction products/services
• key objectives
• goals and how you plan to achieve them
• your target market and customers
• sales and pricing plans
• marketing plans
• operational plans
• financial projections.

Download our free business plan template.

Register your business

To operate legally, you must first register your business with HMRC.

Choose a business structure that suits your needs, such as a sole trader, partnership, or limited company.

Each option has its advantages, depending on what kind of construction business you plan to start.

If you decide to set up a limited company, you must register your business with Companies House.

Before doing so, you must choose a name for your construction start-up.

It can be a good idea to choose something unique and memorable that conveys the type of services you offer – find out more about how to choose the right brand name for your business.

Read our complete guide to start-up business structures.

Insurance for your construction business

It is important to have business insurance to protect your construction company from potential liabilities.
Typical insurance policies for construction businesses include:

• public liability insurance – this covers claims made by the public for incidents that occur in connection with your business
• employers’ liability insurance – this covers claims from employees for work-related incidents or illnesses
• professional indemnity insurance – this covers claims for professional mistakes that cause financial loss for a client.

If your construction business relies on vehicles, you may also need a commercial vehicle insurance policy to protect against accidental damage or theft.

Learn more with our guide to self-employed insurance for start-up businesses.

Funding your construction business

Starting a construction business requires significant capital for equipment, materials, and hiring employees.

You may wish to think about using savings, bank loans, or loans from friends and family.

You might also consider applying for a Start Up Loan to help you launch your new business.

A Start Up Loan provides government-backed personal loans of up to £25,000 with a fixed 6% interest rate, plus a year of free business mentorship.

Other funding options could also include:

• working capital loans – a short-term financing solution designed to help businesses cover their everyday operational expenses
• purchase order financing – short-term options that cover the cost of materials in advance
• vendor financing – a loan agreement where you would negotiate an extended repayment schedule with no late fees.

Read more about the best business funding alternatives for your start-up.

Buy or rent equipment

The equipment required for your building construction start-up will vary based on your services.

You might choose to rent larger pieces instead of purchasing them.

However, basic equipment inventory could include:

• hammers
• drills and drillbits
• ladders
• a variety of saws
• buckets and brushes
• screwdrivers, wrenches, and pliers
• safety wear (hard hats, hi-vis vests, gloves, and eye and ear protection)
• chemical supplies such as paint, plaster, adhesives, and cement.

For larger projects, you may need heavy machinery such as cement mixers, diggers, excavators, jackhammers, industrial lights, and heaters – but these could be rented as needed.

Another cost to consider is arranging secure storage and transportation for your equipment between jobs.

Market your business

Marketing your start-up can help spread the word about your business to potential customers.

A robust marketing strategy highlighting your construction company’s unique selling point (USP) could help you stand out and drum up business in your target market.

A business website can help showcase past projects to potential clients, detailing your services and providing a simple way to contact you.

Other marketing tactics for your construction start-up could include promoting your business on social media, becoming listed in online directories, and investing in pay-per-click (PPC) advertising.

Read our guide to marketing on a shoestring budget.

Hire staff or sub-contractors

You may wish to hire permanent employees who would work under your direction.

Consider recruiting skilled and reliable people licensed in their trades and aligning with your business’ values to work on each project.

Alternatively, hiring sub-contractors could be a good idea if your clients require people with experience in something you do not currently provide, such as specialist technical services such as drainage, electrical work, or roofing.

If you hire sub-contractors, you must register with the Construction Industry Scheme (CIS) – a tax deduction scheme that involves deducting money from sub-contractor payments and passing it directly to HMRC.

These count as advance payments towards their tax and National Insurance.

You may require employees for other positions, such as accountant, office administrator or site manager.

Understand construction health and safety regulations

Health and safety should be a top concern for every construction business.

Compliance with health and safety regulations is mandatory to minimise the risk of workplace injuries and illnesses.

Some of the most important to consider are described on the Health and Safety Executive website.

Other regulations may apply depending on the nature and requirements of the project so it’s a good idea to seek independent legal advice to ensure your business remains compliant.

Grow your construction business

Growing your construction start-up could take some time but making a plan outline how you expect your business to grow can be smart and provide you with a roadmap to success.

Encouraging positive relationships and client communication could result in positive referrals and reviews, boosting your company’s reputation.

If you share glowing customer feedback on your website and social media, this could help you attract new clients in the future.

You could also invest in team training and development to improve employee skills and boost morale.
This could also help your team deliver high-quality work for your business.

You could eventually consider providing a more comprehensive range of services and investing in more specialist equipment.

You may want to look into securing further funding for these through a variety of business finance options.

Read more about Working as your own boss in construction can be lucrative and fulfilling, with potentially high levels of job satisfaction from seeing the results of your hard work.

With the construction industry predicted to grow by 7% in 2025 and new laws to prioritise the building of new homes, it could be a good time to start your own construction business.

You could do this either as an independent contractor or as the owner of a construction firm.

While the industry is heavily regulated and requires skilled work, it presents a good opportunity to be your own boss if you have the necessary skills, experience, and a solid business plan.

This guide walks you through the essential steps to launching a construction business, from initial planning to securing funding and understanding legal requirements.

What skills and experience do you need?

If you’ve previously worked professionally in construction, you should have the necessary skills to start your own construction business.

Experience in the industry is invaluable – from understanding project management to ensuring health and safety requirements are met.

Although no mandatory qualifications are required to start a construction business, specific roles within the industry, especially those involving safety-critical tasks, may require specific certifications or qualifications.

You may wish to consider the following to enhance your knowledge, particularly if you don’t have past construction experience, through schemes such as:

• NVQs (National Vocational Qualifications)
• City & Guilds qualifications in construction
• construction management qualifications from universities
• certification from the Chartered Institute of Building (CIOB)
• training approved by the Construction Industry Training Board (CITB).

You could also consider joining an apprenticeship scheme to earn while you learn before becoming your own boss.

Other qualifications to consider, especially when operating and being the legally responsible person for building sites, are:

• The Federation of Master Builders (FMB) – a trade accreditation demonstrating the necessary skills for construction projects – you must pass an assessment and inspection process to qualify.
• Construction Skills Certificate Scheme (CSCS) – while not a legal requirement, a CSCS card is often needed for working on construction sites.

Running a successful construction company requires more than just building skills.

General business and soft skills can help your start-up thrive.

These might include:

• good communication skills for dealing with clients and suppliers
• organisational skills to keep projects on track
• numeracy skills to manage invoicing, payments, and profit forecasting
• project management skills, such as strategic planning, problem-solving, and adaptability.

Find out more about the skills you need to run a business.

Define your construction business

Decide on the type of construction business you want to start.

For example, will you focus on:

• residential projects – such as building homes, extensions, or blocks of flats
• commercial buildings – such as offices, shopping centres, and hotels
• infrastructure work – such as roads, bridges, and utilities.

Your choice will influence your business plan, marketing strategy, and the skills you need to recruit as you grow a team.

Research potential customers

Thorough market research is critical to understanding the demand for construction services in your area.

It can help you make considered decisions and avoid costly mistakes when launching your business.

Conducting thorough research means identifying your target market, analysing competitors, and looking for opportunities.

Consider a number of key areas for your market research:

• local demand – assess local competitors to determine demand for construction services in your area. Look at what they offer, their prices, and how you could differentiate your business
• potential customers – what do your target customers need, what options are currently not available to them (so you could fill the gap), and typical customer preferences
• emerging trends – this might involve research about the latest developments in your sector, health and safety practices, sustainability and new materials, and new regulations that might affect your business.

Learn about market research techniques.

Create a construction business plan

A business plan is essential for outlining your business objectives and how you plan to achieve them over a set period.

It acts as a roadmap, guiding you on structuring, running, and growing your business.

A well-crafted business plan is also crucial for seeking external funding or partnerships.

There are several key areas you must outline in your construction business plan, including:

• a description of your construction business
• your construction products/services
• key objectives
• goals and how you plan to achieve them
• your target market and customers
• sales and pricing plans
• marketing plans
• operational plans
• financial projections.

Download our free business plan template.

Register your business

To operate legally, you must first register your business with HMRC.

Choose a business structure that suits your needs, such as a sole trader, partnership, or limited company.

Each option has its advantages, depending on what kind of construction business you plan to start.

If you decide to set up a limited company, you must register your business with Companies House.

Before doing so, you must choose a name for your construction start-up.

It can be a good idea to choose something unique and memorable that conveys the type of services you offer – find out more about how to choose the right brand name for your business.

Read our complete guide to start-up business structures.

Insurance for your construction business

It is important to have business insurance to protect your construction company from potential liabilities.
Typical insurance policies for construction businesses include:

• public liability insurance – this covers claims made by the public for incidents that occur in connection with your business
• employers’ liability insurance – this covers claims from employees for work-related incidents or illnesses
• professional indemnity insurance – this covers claims for professional mistakes that cause financial loss for a client.

If your construction business relies on vehicles, you may also need a commercial vehicle insurance policy to protect against accidental damage or theft.

Learn more with our guide to self-employed insurance for start-up businesses.

Funding your construction business

Starting a construction business requires significant capital for equipment, materials, and hiring employees.

You may wish to think about using savings, bank loans, or loans from friends and family.

You might also consider applying for a Start Up Loan to help you launch your new business.

A Start Up Loan provides government-backed personal loans of up to £25,000 with a fixed 6% interest rate, plus a year of free business mentorship.

Other funding options could also include:

• working capital loans – a short-term financing solution designed to help businesses cover their everyday operational expenses
• purchase order financing – short-term options that cover the cost of materials in advance
• vendor financing – a loan agreement where you would negotiate an extended repayment schedule with no late fees.

Read more about the best business funding alternatives for your start-up.

Buy or rent equipment

The equipment required for your building construction start-up will vary based on your services.

You might choose to rent larger pieces instead of purchasing them.

However, basic equipment inventory could include:

• hammers
• drills and drillbits
• ladders
• a variety of saws
• buckets and brushes
• screwdrivers, wrenches, and pliers
• safety wear (hard hats, hi-vis vests, gloves, and eye and ear protection)
• chemical supplies such as paint, plaster, adhesives, and cement.

For larger projects, you may need heavy machinery such as cement mixers, diggers, excavators, jackhammers, industrial lights, and heaters – but these could be rented as needed.

Another cost to consider is arranging secure storage and transportation for your equipment between jobs.

Market your business

Marketing your start-up can help spread the word about your business to potential customers.

A robust marketing strategy highlighting your construction company’s unique selling point (USP) could help you stand out and drum up business in your target market.

A business website can help showcase past projects to potential clients, detailing your services and providing a simple way to contact you.

Other marketing tactics for your construction start-up could include promoting your business on social media, becoming listed in online directories, and investing in pay-per-click (PPC) advertising.

Read our guide to marketing on a shoestring budget.

Hire staff or sub-contractors

You may wish to hire permanent employees who would work under your direction.

Consider recruiting skilled and reliable people licensed in their trades and aligning with your business’ values to work on each project.

Alternatively, hiring sub-contractors could be a good idea if your clients require people with experience in something you do not currently provide, such as specialist technical services such as drainage, electrical work, or roofing.

If you hire sub-contractors, you must register with the Construction Industry Scheme (CIS) – a tax deduction scheme that involves deducting money from sub-contractor payments and passing it directly to HMRC.

These count as advance payments towards their tax and National Insurance.

You may require employees for other positions, such as accountant, office administrator or site manager.

Understand construction health and safety regulations

Health and safety should be a top concern for every construction business.

Compliance with health and safety regulations is mandatory to minimise the risk of workplace injuries and illnesses.

Some of the most important to consider are described on the Health and Safety Executive website.

Other regulations may apply depending on the nature and requirements of the project so it’s a good idea to seek independent legal advice to ensure your business remains compliant.

Grow your construction business

Growing your construction start-up could take some time but making a plan outline how you expect your business to grow can be smart and provide you with a roadmap to success.

Encouraging positive relationships and client communication could result in positive referrals and reviews, boosting your company’s reputation.

If you share glowing customer feedback on your website and social media, this could help you attract new clients in the future.

You could also invest in team training and development to improve employee skills and boost morale.
This could also help your team deliver high-quality work for your business.

You could eventually consider providing a more comprehensive range of services and investing in more specialist equipment.

You may want to look into securing further funding for these through a variety of business finance options.

Read more about how to build a scalable start-up.

/support-and-guidance/business-guidance/business-planning/8-ways-to-build-a-scalable-startup">how to build a scalable start-up.