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Starting a Construction Company in South Africa – Business Plan (PDF, Word & Excel)

Posted by BizBolts | All Articles , Business Ideas , Business Plans

The construction industry in South Africa is not just robust; it’s a thriving sector that offers a wealth of potential for those willing to take the plunge. South Africa is a nation on the rise, with a increasing need for infrastructure, housing, and commercial spaces. As the government invests heavily in infrastructure development, the private sector thrives, creating a dynamic landscape for construction businesses. With a population of over 60 million and a growing urbanization trend, the demand for construction services is skyrocketing, making it an industry ripe for entrepreneurial ventures. Starting a construction company in South Africa requires a strategic approach and a comprehensive understanding of the market dynamics. While the profit potential is enticing, it’s essential to be well-prepared. Entrepreneurs must conduct thorough market research, assess competition, and identify niche opportunities to differentiate their offerings. This article will outline how to start a construction business in South Africa, and the construction company business plan – PDF, Word and Excel.

Location & Premises

Choosing the right location for your construction company in South Africa is a pivotal decision that can significantly impact your business’s success. Consider establishing your base in a region with a high demand for construction services, such as major urban centers or emerging growth corridors. Proximity to suppliers, clients, and key transportation routes is also essential for logistical efficiency. Furthermore, keep an eye on local regulations and zoning laws that may affect your operations. A well-thought-out location strategy can be the cornerstone of your construction venture’s prosperity in this dynamic market.

Securing suitable premises for your construction company in South Africa is a critical step in laying the groundwork for your success. Depending on your business size and scope, you may need an office for administrative tasks, storage facilities for equipment and materials, and possibly a workshop for fabrication. The right premises should align with your business needs, budget, and long-term growth plans. Additionally, ensure that your chosen location complies with zoning regulations and offers ample space for your operations to expand as your company thrives. A well-chosen premises can enhance efficiency, safety, and overall productivity, setting the stage for a prosperous construction enterprise.

Vehicles, Machinery & Equipment

Having a well-maintained fleet of vehicles is a necessity in the construction business. The choice of vehicles can greatly influence the efficiency and effectiveness of your operations. You may need sturdy pick-up trucks for transporting materials, spacious vans for accommodating site personnel, and heavy-duty machinery transporters for specialized tasks. Prioritize factors such as vehicle reliability, fuel efficiency, and safety features when assembling your fleet. Moreover, consider leveraging your vehicles as mobile marketing tools by branding them with your company logo and contact information, establishing your presence within the local construction market.

Your choice of equipment should align with the type of construction projects you intend to undertake. Consider investing in a diverse range of machinery, including excavators, bulldozers, concrete mixers, and cranes, to cater to a variety of construction needs. Our construction company business plan includes contact details for local suppliers of construction equipment and machinery. Regular maintenance and upkeep of your equipment are essential to ensure safety and prolong their operational lifespan. Additionally, it’s worth noting that, for some specialized machinery, you can opt to hire them as and when necessary, allowing for flexibility and cost-effectiveness in managing your equipment inventory.

When venturing into the construction business in South Africa, it’s vital to define the range of services you intend to offer with precision. The market is diverse, and your success hinges on aligning your services with the needs and demands of your target clientele. You might consider a comprehensive approach, encompassing residential, commercial, and infrastructure projects, or specialize in niche areas like sustainable construction, renovations, or architectural design. To stand out in the competitive landscape, emphasize your unique selling points, such as a commitment to quality workmanship, adherence to timelines, or cost-effectiveness. Additionally, with South Africa’s growing emphasis on eco-friendly construction practices, integrating green building solutions into your service offerings can help you tap into a burgeoning market segment concerned with sustainability and environmental responsibility. Your service portfolio should be a well-thought-out roadmap that not only positions you as a construction expert but also resonates with the diverse construction needs of South Africa.

Furthermore, offering value-added services can set you apart in a crowded marketplace. Consider including project management, consultancy, or maintenance services to enhance the overall client experience and foster long-term relationships. Building a reputation for reliability and going the extra mile to meet client expectations can be your ticket to enduring success in South Africa’s ever-evolving construction industry. Whether you choose to be a generalist or a specialist, the key is to offer services that align with your expertise and the dynamic needs of the South African construction market while staying adaptable to emerging trends and technologies.

South Africa Construction Tenders

In the construction industry of South Africa, securing tenders can drive your business’s growth and sustainability. Successfully navigating the competitive bidding arena requires a multifaceted approach. First and foremost, stay vigilant and proactive in tracking tender opportunities that align with your company’s expertise and capabilities. Government departments, municipalities, and private clients frequently release tender invitations, and staying informed about these opportunities is crucial. Develop a comprehensive strategy for tender submissions, ensuring that your proposals are not only technically sound but also financially competitive. Building strong relationships with clients, suppliers, and industry stakeholders can provide valuable insights and increase your chances of winning tenders. Additionally, continuously improving your tendering process, from documentation to presentation, can give you a significant edge in securing projects and expanding your foothold in the South African construction market.

Staff And Management

In the construction business, your staff is the heartbeat of your enterprise. Assembling a skilled and dedicated team is paramount to your success. From project managers to skilled laborers, each member plays a pivotal role in delivering projects efficiently and upholding your company’s reputation. Some positions like project managers may require full-time employees for consistent project oversight and expertise. Conversely, roles such as general laborers or equipment operators may benefit from hiring part-time workers as when necessary, aligning staffing with fluctuating demands and optimizing cost-efficiency. The salaries for all your staff should be included in the construction business plan.

Invest in ongoing training and development programs to ensure your workforce remains at the forefront of industry trends and safety protocols. Moreover, fostering a positive work culture that values teamwork, commitment to quality, and client satisfaction can be your differentiator in a competitive market. As South Africa’s construction industry continues to evolve, your staff’s expertise and dedication will be the driving force behind your company’s growth and excellence.

There is a huge demand for construction services in South Africa. The nation’s construction landscape is rich and varied, offering opportunities across residential, commercial, and infrastructure sectors. Potential customers include government entities at various levels, such as municipalities and provincial governments, which often release tenders for public infrastructure projects like roads, bridges, and schools. Private property developers seeking partners for housing and commercial developments also represent a significant market segment. Moreover, industrial clients, including manufacturing plants and logistics companies, require specialized construction expertise for their facilities. Additionally, South Africa’s booming tourism industry has spurred demand for hospitality construction, with hotels and resorts seeking construction services to meet the growing influx of tourists. Beyond these, individuals looking to build or renovate their homes are an essential customer base, as they seek reliable and skilled contractors to bring their residential dreams to life. Understanding these diverse customer segments and tailoring your services to their unique needs is key to tapping into South Africa’s expansive construction market.

For instance, a construction company could specialize in residential projects, serving as the go-to contractor for individuals or companies looking to build or renovate homes. Alternatively, they might focus on commercial construction, targeting retail chains, office complexes, and shopping centers seeking expansion or upgrades. Government tenders for infrastructure development, such as roads and public buildings, present opportunities for contractors with expertise in these areas. By identifying and catering to the needs of these diverse potential customers, a construction company can position itself strategically in the South African construction market and unlock its vast growth potential.

PRE-WRITTEN CONSTRUCTION COMPANY BUSINESS PLAN (PDF, WORD AND EXCEL): COMPREHENSIVE VERSION, SHORT FUNDING/BANK LOAN VERSION AND AUTOMATED FINANCIAL STATEMENTS

For an in-depth analysis of the construction business in South Africa, purchase our construction business plan. We decided to introduce the business plans after noting that many South Africans were venturing into the construction business without a full understanding of the industry, market, how to run the business, the risks involved, profitability of the business and the costs involved, leading to a high failure rate of their businesses.

Our business plan will make it easier for you to launch and run a construction company successfully, fully knowing what you are going into, and what’s needed to succeed in the business. It will be easier to plan and budget as the construction company business plan will lay out all the costs involved in setting up and running the construction business. The business plan is designed specifically for the South African market.

USES OF THE CONSTRUCTION BUSINESS PLAN (PDF, WORD AND EXCEL)

The construction company business plan can be used for many purposes including:

• Raising capital from investors/friends/relatives
• Applying for a bank loan
• Start-up guide to launch your construction business
• As a construction project proposal
• Assessing profitability of the construction business
• Finding a business partner
• Assessing the initial start-up costs so that you know how much to save
• Manual for current business owners to help in business and strategy formulation

CONTENTS OF THE CONSTRUCTION COMPANY BUSINESS PLAN (PDF, WORD AND EXCEL)

The business plan includes, but not limited to:

• Market Analysis
• Industry Analysis
• 5 Year Automated Financial Statements [ Income statements, cash flow statements, balance sheets, monthly cash flow projections (3 years monthly cash flow projections, the remaining two years annually),break even analysis, payback period analysis, start-up costs, financial graphs, revenue and expenses, Bank Loan Amortisation]
• Marketing Strategy
• Risk Analysis
• SWOT & PEST Analysis
• Operational Requirements
• Operational Strategy
• Why some South Africans in the construction business fail, so that you can avoid their mistakes
• Ways to raise capital to start your construction business in South Africa
• Directory [Contact Details for South African suppliers of construction machinery & equipment]

The Construction Business Plan package consist of 4 files

• Construction Company Business Plan – PDF file (Comprehensive – 104 pages)
• Construction Company Business Plan – Editable Word File (Comprehensive – 104 pages)
• Construction Company Business Plan Funding Version – Editable Word File (Short version for applying for a loan – 49 pages)
• Construction Company Business Plan Automated Financial Statements – (Editable Excel file)

Testimonial 4

The business plan was very helpful, you did a great job of taking ideas and putting them into words as well as pointing out other aspects of the business plan I wouldn’t have thought of. I got funding using your business plan and it’s now 4 months since I started my poultry business, and everything is going well.

Testimonial 1

Many thanks to the BizBolts team for putting together a fantastic business plan, I could not have done this business plan on my own. I managed to get funding from investors to start my butchery business using your business plan.

Testimonial 2

I am extremely pleased with the business plan and financial statements. The business plan is very detailed & it meets my requirements. I feel better equipped with tools that can help me secure funding.  I would have no hesitation of recommending your business plans to other people.

Testimonial 3

The business plan has a highly professional look and feel. The research really helps me look deep into the market that I am targeting, it’s well suited for the South African market. The business plan clearly outlined everything I need to start the business and the costs. It’s now easier to budget and plan. Thank you very much.

Testimonial 5

The BizBolts poultry business plan led us down the path from start to finish. Contact details of suppliers of key requirements were included in the business plan. It helped us crystallize our strategy, and the business plan was well received by the bank.

Testimonial 7

Thank you BizBolts for the business plan. I received the business plan immediately after payment, it was money well spent ! I was able to easily edit the business plan. After using the BizBolts business plan, I can wholeheartedly recommend their products and skills.

Testimonial 6

It is with excitement and pleasure to inform you that I have been successful in securing a loan from my bank. This would not have been possible if not for the BizBolts Business Plan. Thank you for your help, my dreams are now coming true.

GET THE CONSTRUCTION COMPANY BUSINESS PLAN (PDF, WORD AND EXCEL) - R500 Only.

We decided to make the business plan affordable to anyone who would want to start the business, and the price for the pre-written business plan is only 500 Rand.

We have several payment methods which you can use.

Payment Method 1 (Visa card, Mastercard, Credit card, Debit Card)

Click  Buy Now  below to purchase. After you have purchased, you will instantly see the download link for the business plan package on the screen. We will also email you the download link. Get instant access to the business plan now!

If you want to purchase multiple business plans at once using Visa Card/MasterCard then  click here: Business Plans Store

The business plan package is a zipped compressed file containing the PDF, Word and Excel documents. To open the package after downloading it, just right click, and select Extract All. If you have any problems in downloading and opening the files, email us on [email protected] and we will assist you.

Payment Method 2 (Instant EFT - FNB, Absa, Standard Bank, Nedbank, CapitecBank, Investec, TymeBank and African Bank. )

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Call/Whatsapp us on +27606334830 for the other payment methods. (Whatsapp us by clicking the link https://wa.me/27606334830 ). Email: [email protected] .

About The Author

BizBolts (Pty) Ltd is a business research company based in Johannesburg, South Africa. We sell prewritten business plans for various industries including livestock production, crop farming and retail businesses. BizBolts also publishes articles on business ideas, business news, business tips, personal finance, and entrepreneur profiles.

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How to Start a Construction Company

Updated on 28 October 2022

If you’re an experienced contractor, then starting a construction company can be incredibly exciting. However, there are also many tricky, time-consuming steps required for getting a new construction company off the ground.

Like starting any business, you’ll need a solid business plan, funding, and the right team. In construction, you’ll also need a fairly long list of licenses, permits, and unique requirements. We’ll cover everything you need to know about starting a construction business in the guide below.

How Do I Start a Local Construction Company?

The first step to starting a local construction company is establishing a need for your services and finding a gap in the market. Construction can be a highly competitive business, so it’s important to specialize in an area where there is enough demand for your services.

While there’s a lot that goes into starting a local construction company, the process can be broken down into five main steps:

• Perform market research: The first step to starting a construction business is to perform thorough market research. Understand the local construction industry, gather information about your competitors, and establish a unique market positioning for your business.
• Create a business plan: Spend time writing a detailed business plan. This should cover how your business will operate, what your startup costs, operating expenses, and financial projections are, who will run the business, how you will market the business, and so on. This is your roadmap for how you will launch and manage your construction firm.
• Register your business: It’s important to register your business and set up the correct business structure.
• Get all the right licenses: Starting a local construction business requires the right licenses, permits, and insurance. It’s important that you get all of this covered so that your business can operate legally and safely. Some essential licenses, certificates, and legal steps for South African construction businesses include registering with the CIDB and NHBRC, VAT registration, tax clearance certificate, and registering with the CSD.
• Fund your business: Starting a construction business requires capital for equipment, staff, marketing, and getting your business off the ground. You’ll need to use your business plan to help you attract and gain funding.

These are the basic steps to starting a South African construction company. However, it is possible to start small with minimal capital. As long as you have the right team, knowledge, and documents, you can start by taking on small projects and renting any equipment you need.

What Documents are Needed to Start a Construction Company?

When you register your construction company, you’ll need to ensure you are set up with the right documents. This includes:

• COID Registration
• MBSA Membership
• VAT Registration
• CIDB (Construction Industry Development Board) Registration
• Letter of Good Standing
• B-BBEE Affidavit or BEE Certificate
• Tax clearance certificate
• NHBRC Registration

How Much Does it Cost to Start a Construction Company in South Africa?

The cost of your construction company depends on the size of the company and what you will be investing in. It could cost millions if you plan to invest in heavy machinery, vehicles, office space, and a large team. However, if you start small and rent your equipment, it could only cost you a few thousand rands to get your business registered and set up. This will let you start bidding on small construction projects.

Is Owning a Construction Company Profitable?

Owning a construction company can be highly profitable – especially if you are able to win large contracts and tenders. However, construction can also have thin profit margins and tough competition. The profitability of your company depends on the jobs you win and how efficiently your business is able to manage each project.

How Long Does it Take to Get NHBRC Certificate?

Registering at the NHBRC includes various enrolment requirements. While registration can take five working days, there are 16 steps to the registration process, including a test. This means it could take weeks, or even months, to get an NHBRC certificate.

Starting a construction business can be incredibly rewarding. You just need to make sure that you put in enough planning to make it a success. Ensure you meet all of the right legal requirements, and that your team is properly equipped to take on any projects you bid for. The good news is that construction is always taking place, so there is plenty of demand for quality construction services.

Looking for more business inspiration? Check out our complete guide on how to start an agribusiness in South Africa.

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Construction Company Business Plan

Growing a construction company is much more difficult and taxing than completing projects.

From acquiring a new project to meeting deadlines, managing the budget, and many more things in between- you will find yourself drowning in responsibilities when you start a construction company.

A construction  business plan can come to your rescue in such burdensome situations. If prepared well, it can become a reference point for your company as it continues to grow.

Confused about how to write a business plan?

Well, this article will serve you perfectly. It will help you understand the contents of the business plan and offer a sample template for your construction company.

So let’s build a solid construction company business plan with this detailed guide.

Let’s dive right in.

Why do you need a construction company business plan?

Apart from the fact that investors and banks would ask for a business plan when you seek funding, here are a few more reasons you need a business plan.

• A business plan offers a roadmap to your business. It acts as a guiding block that has answers to all your how, when, where, and what.
• It helps in determining the exact target market for your business and formulating strategies to cater accordingly.
• There are millions of construction companies competing in the industry. You can identify your strengths through a business plan and design a competitive edge to stand apart.
• A well-rounded plan prepares you for emergencies that may arise in your business by making a plan for every situation.
• A whole lot of business processes repeat every day. A business plan helps bring consistency by establishing SOPs for various business activities.

And of course, you get your desired funding with a solid business plan that vouches for the potential of your construction company.

Key components of a construction business plan

Writing a business plan gets much easier with a structurally defined flow. Well, let’s have a look at key components that a construction company business plan must have.

Executive Summary: A brief summary of an entire business plan that will encourage the readers to read further.

Company Overview: A brief company description including every detail from company structure to its mission statement and future goals.

Market Analysis: A thorough analysis of the construction industry and your target market. It also includes sections for competitor analysis, future market trends, and scope of growth.

Construction Services: Outline the construction services that your company will offer. Highlight any additional services that will make you a distinct player.

Marketing and Sales Strategy: It includes a strategic plan to achieve success through marketing and sales. Determine the best course of action for your business.

Management Team: Introduce key personnel in managerial and leadership roles. Discuss their roles, qualifications, experience, and expertise.

Operations Plan: A detailed plan that streamlines the everyday operations right from construction methods to hiring employees.

Financial Plan: A financial plan highlights the prominent figures and key reports of your construction company by making necessary financial projections.

Let’s dive further into these topics and get a detailed understanding of writing your business plan.

How to create a construction company business plan?

A poorly written plan serves no purpose. However, with this step-by-step guide on writing construction company business plan, you will uncover every detail that goes into making a fantastic and purpose-serving business plan.

1. Write an executive summary

The executive summary is a concise yet insightful description of your entire business plan.

This one-page document summarizes the most important questions that a reader might have and offers a peek into what they are about to uncover. Investors take a brief glance at your executive summary before deciding whether to proceed further or not.

An executive summary must outline the following details of your construction business in persuasive consecutive paragraphs.

• The exact business opportunity
• The target market
• The problem and the solution to it
• Products and services offered by you
• Market size and growth potential
• Financial highlights
• Management team

Maintain a personal storytelling tone while writing this section and encapsulate every minute detail that can make a difference.

But wait, don’t start writing yet. Write your executive summary only after you are done writing an entire plan. This will help you summarize effectively.

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2. Prepare a company overview section

This section of a business plan will focus entirely on the details of your construction company.

From the type of construction company to the construction company’s goals- everything in this section is about your company description.

To begin with, highlight the type of construction business you will start. For instance, a residential construction company, general contracting company, industrial construction company, or specialty trade construction.

Clarify, if this will be a new business or an extension of existing business. If the business is already operating, offer a brief description of the business history.

After that, highlight the business structure of your construction company. Are you going to be a sole trader or start a limited liability company (LLC) or a limited partnership firm? The business structure you choose will decide how the finances and taxes will work in your business.

Now, this section is your chance to weave magical stories around your construction company. Present the mission statement, company’s objectives, and future goals over here.

For instance,

Mission statement : Syncore aims to become a trusted name for sustainable residential construction projects in Arizona by 2028. With our commitment to the highest quality standards, we will penetrate the market with our premium budgeted solutions.

Business goals :

• Onboarding and signing 15 construction projects in a span of 6 months.
• Generating revenue of $2 million by 2025.

Like this, you will write this entire section in parts by offering a brief overview of your construction business.

3. Conduct a competitive and market analysis

In this section of a business plan, you begin with industry analysis and then narrow it down to your particular market segment. This is important to show your potential investors that there are promising opportunities in this market.

Using market research practices determine the target market for your construction business. Create a buyer persona to identify what your ideal customer will look like.

Further, highlight your competitors in this competitive construction industry. Using SWOT analysis and PESTEL, determine the strengths and weaknesses of competing construction companies. In this section, you will also highlight your strengths to gain a competitive edge over existing players.

Don’t limit your market study to merely understanding the current scenarios. Extend the research and identify future trends and growth possibilities in your targeted market.

If you are a residential construction company focused on sustainable building practices, you must include the following details in your market analysis section.

• How large is the construction industry?
• What segment of the construction market will you capture?
• Who will avail of the construction services?
• What is the spending capacity of your target customers?
• Who are the top competing construction companies?
• What are the emerging trends in the industry and how will you leverage those?
• What is the growth potential of your target market?

Focus on quality market research as this will form the base of your further projections and strategies.

This screenshot of the construction business plan example highlights only the market size for HDFL construction. You can also include details like competitors analysis, growth potential, and market trends here.

4. Describe your construction service offerings

What construction services will you offer your potential clients?

Offer a detailed answer to this question, as you write a business plan section for service offerings.

Overall, this section should highlight every service offering that will bring you money. This could include services like,

• General contracting services
• Design and Engineering
• Construction
• Renovation and remodeling
• Project management
• Specialty services i.e. concrete work, HVAC installation, Roofing services
• Maintenance and repairs

Offer a brief understanding of these service offerings and highlight construction jobs you will specialize in. For instance, remodeling of kitchen and bathroom.

Now, will your construction company sell any construction materials for profit? If so, include details for that as well.

It’s important to consider the breadth of your service offerings to keep the customers coming back.

Overall, this section is your chance to prove to potential investors that your services can stand solid in the competitive construction industry.

5. Propose marketing and sales strategies

According to the IBIS world report , there are more than 3,787,470 construction businesses in the USA. Starting a construction company will add one more to this list, but hey- How do you wish to make a brand that your target audience can recall easily?

All the market assessment and understanding of your potential clients will come in handy at this stage as you make your marketing plan and sales strategies.

Take an opportunity to lay out your sales plan in this section. If you have existing customers, explain how you plan to retain them.

After you are done making your sales strategies, touch the marketing aspect.

Firstly, identify the way you want your brand to be recognized- as an ordinary construction firm, a luxury construction company, a sustainable solutions firm, or an affordable construction company. This will help you make a marketing plan.

Your marketing strategy should answer the following questions:

• Which marketing channels will you use-  Online, offline, or a mix of both?
• How will you generate more leads?
• Online marketing methods- search engines, social media, Email marketing, content marketing, etc.
• If you are going to be utilizing social media platforms- which ones?
• How much will you budget for paid ads?
• Will you use billboards, pamphlets, and newspaper advertisements to market your business?

Keep in mind the marketing channels where you can find your potential customers. For instance, you are more likely to find conversions through Email campaigns than social media campaigns, if you are finding clients for commercial construction.

All in all, in this section you have to draw potential investors’ attention with your sales and marketing strategy.

6. Introduce your management team

Everyone is aware of the cutthroat competition in the construction industry. Knowing that you need an able team to transform your business plan into a successful venture.

After laying out your marketing strategy, it’s time to introduce the key management and leadership team to your business plan.

It’s okay to brag about the talented individuals you have in your company. From construction heads to project managers, highlight the achievements, experience, and expertise of these people and prove their asset-worthiness for your company.

Also, draw the hierarchical map to give potential investors an idea of your organizational structure.

This is your time to prove that you have both the means and manpower to run a successful company.

7. Outline your operational plan

You may know construction, but do you know how to run a construction business?

As someone said, “ Seamless operations are the silent engine of extraordinary business achievements”

Before even taking the first project, it’s important to define operations and SOPs for different business activities. Make it so thorough that it can act as a guidebook whenever a problem arises in your construction company.

As you write a business plan for this section, focus on answering the following questions:

• What construction materials will you use?
• What will be the supply chain process in your construction company?
• Who will oversee the project management on site?
• What will be the timeline for completing projects?
• What will be health and safety protocols for construction workers?
• What will be the process of construction work?
• How will the communication flow within an organization?
• What technologies and equipment will you use?
• How will you ensure quality work?
• How will you hire employees?
• What accounting software will you use?

This is just a general gist of questions that can help you prepare this section. Consider it as a living document that will undergo various changes as the business commences and grows.

A thorough operations plan will lay a clear groundwork for running a company. Moreover, it will instill investors’ faith in your ability to run a construction company.

8. Create a financial plan

Writing a sound financial plan is a challenge but nothing that your determined mind can’t handle.

Whether you plan to raise funds or get bank loans, you need a sound financial plan. Investors will analyze this section and only if they find your business financially viable, will they invest.

In this section, you will make financial projections and estimates for your construction company. This includes forecasting sales, estimating startup costs , projecting overhead costs, and making a pricing plan.

Using the startup costs projection, determine how much funding is essential to start your own construction company.

Also, prepare different reports like income statements, cash flow statements, balance sheets, and break-even analyses using the projections made earlier.

To make a financial plan more relevant, consider various progressive and aggressive situations.

Lastly, prepare graphs, charts, and diagrams to make this section visually appealing and easy to grasp.

Now, stop. Don’t start writing a financial plan yet. You need a financial forecasting tool from Upmetrics to help you with projections and calculations of cash flow, sales, revenue, and everything else. Simply enter the data and it will make detailed and precise calculations for you.

Trust us, you don’t want to scratch your heads writing the entire plan from ground level.

And that’s it! With all this information you pretty much know everything that a construction business plan must have.

Construction Industry Highlights 2023

Now that you are almost set to open a construction company, here are a few industry statistics that might interest you.

• Market size : The US construction market sector was valued at 1.8 trillion US dollars in 2022.
• Growth of the virtual construction market : The global BIM market is 7.9 billion US dollars . North America is projected to be a market leader capturing 30% of this market.
• Rise in prefabrication and modular construction : Healthcare facilities followed by hotels/motels and educational institutions are most likely to avail of modular construction facilities.
• Major concerns : The leading concerns encircling the construction industry are inflation and supply chain disruptions faced by nearly 90% of constructors.
• Sustainable and green building : There is a continuous increase in demand for sustainable and green building solutions. As for 2021, the green building market in the USA was reported to be approximately 83 billion dollars .
• Growing investment in smart cities : According to IDC, the investment in smart cities is expected to grow to 203 billion dollars by 2024.

From sustainability to tech-centric processes, the construction industry is making huge shifts in trends. Both, small businesses and large have to evolve according to changing times to keep themselves relevant.

The Quickest Way to turn a Business Idea into a Business Plan

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A lot of us struggle when it comes to translating our ideas into a solid construction business plan. But not with Upmetrics.

Upmetrics is an intuitively designed business planning app with more than 400+ sample business plans . Our business planning tool features AI assistance that will transform your business writing process. Not only that, it allows you to design, collaborate, and share your business plan in real-time with your team.

So what are you waiting for?

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Architecture Business Plan

Main Parts of a Business Plan

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Frequently asked questions, what kind of market research should i include in my construction business plan.

The market research for your construction business plan must include the following details:

• The market size of your targeted market, i.e. commercial construction, residential construction, etc.
• The target audience of your services and their buyers’ persona
• Top competing firms and companies offering similar services
• Emerging trends in your market
• Growth potential for your firm

Is a SWOT analysis necessary for a construction company business plan?

Absolutely yes. There are more than a billion construction companies in the USA itself. Starting another business won’t guarantee success unless you have a business that can withstand the dynamic competitive environment. SWOT analysis will make you aware of the company’s strengths, weaknesses, and the opportunities it can avail

What are the initial startup costs for a construction company?

It is possible to start a construction company with as little as $10,000. However, if you plan to set up a mid-sized construction company, expect to spend anywhere around $50,000-$250,000 on getting a basic setup. This includes accounting for licenses, insurance, office setup, construction materials, and payroll for the initial months.

Can I get government grants for a construction business?

Yes, you can apply for government grants to start your construction business. Check the local, federal, and state regulations to see which grants are applicable to your business. Check the eligibility and apply accordingly.

How often should I update my construction business plan?

A business plan is a living document that can guide you toward success if mapped properly. Ideally, you should update your business plan every 4-6 months to make it relevant. Set aside time to do so as a renewed plan will offer deep and meaningful insight into your business goals.

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How to Start a Construction Company in South Africa

If you want to know how to start a construction company and where to start, we have got you covered. Starting a construction company in South Africa requires careful planning and a thorough understanding of the legal and financial requirements involved. Let’s start with the basics of what a construction company does.

Table of Contents

What does a construction company do?

A construction company is a business that specializes in building and constructing structures, such as houses, buildings, bridges, and infrastructure. Construction companies typically provide a wide range of services, including:

• Design and planning: Construction companies often work with architects and engineers to design and plan construction projects.
• Site preparation: This includes clearing the land, grading, and preparing the site for construction.
• Excavation and foundation work: Construction companies typically handle excavation and foundation work, such as digging trenches and pouring concrete.
• Framing and structural work: This includes constructing the framework of the building and ensuring that it is structurally sound.
• Finishing work: This includes installing flooring, drywall, electrical and plumbing systems, and other finishing touches.
• Project management: Construction companies often manage the entire construction process, overseeing subcontractors and ensuring that the project is completed on time and within budget.
• Maintenance and repairs: Some construction companies also provide maintenance and repair services for existing structures.
• Consultancy: Some construction companies also provide consultancy services for construction projects, such as cost estimates and project scheduling.

Construction companies may also specialize in specific types of construction, such as residential, commercial, or industrial construction.

Here are some basic steps to consider when starting a construction company in South Africa:

Do the research

The first step in building a construction is to do your research. Learn everything you can about construction. There is plenty of information on the internet that can help you to do that.

Learn from other people who have already done what you want to do. You can talk to other construction business owners by joining Facebook groups where you will find many of them. There are also great channels on YouTube that cover businesses including construction Here is a great video that will give you insight into starting a construction companies.

The video is American but the fundamentals of business apply to any construction business.

Develop a business plan

This should include details on the services you will offer, your target market, and your projected financials.

Register your business

You will need to register your company with the Companies and Intellectual Property Commission (CIPC) and obtain a tax reference number from the South African Revenue Service (SARS).

Obtain the necessary licenses and permits

Depending on the scope of your services, you may need to obtain licenses and permits from various government agencies, such as the National Home Builders Registration Council (NHBRC) or the Construction Industry Development Board (CIDB).

Secure funding

You may need to secure funding from investors or financial institutions in order to get your business off the ground.

Network and market your business

Attend industry events, join professional associations, and use social media and other marketing tools to promote your company and attract clients.

Hire and train staff

As your business grows, you will need to hire and train employees to help manage the day-to-day operations of your company.

Stay informed and compliant

Keep up-to-date with the latest regulations and laws in the construction industry and ensure that your company is always compliant with them.

It is important to note that the laws and regulations regarding starting a construction company in South Africa may change and you should always seek professional advice and conduct thorough research before starting a business.

What do I need to start a construction business

Starting a construction company requires a significant investment of time, money, and resources. Here are some of the key things you will need to have in order to start a construction company:

• Capital: Starting a construction company requires a significant investment of capital. This may include money for equipment, supplies, and labor, as well as marketing and advertising expenses.
• Business plan: A business plan is a crucial tool for outlining your company’s goals, strategies, and projected financials. It will help you secure funding from investors or financial institutions.
• Licenses and permits: Depending on the scope of your services and the location of your business, you may need to obtain licenses and permits from various government agencies.
• Insurance: Construction companies are required to have liability insurance and workers’ compensation insurance to protect against potential accidents and injuries on the job.
• Equipment and tools: Depending on the scope of your services, you may need to invest in equipment and tools such as excavators, bulldozers, cranes, power tools and other specialized equipment.
• Staff: As your business grows, you will need to hire and train employees to help manage the day-to-day operations of your company.
• Network and market your business: Attend industry events, join professional associations, and use social media and other marketing tools to promote your company and attract clients.
• Knowledge of the construction industry: Having a thorough understanding of the construction industry, including the latest regulations and laws, is essential for running a successful construction company.

Reasons to start a construction business in South Africa

There are many reasons why someone might choose to start a construction business. Some of the most common reasons include:

Career satisfaction: Many people find satisfaction in building and creating something tangible and long-lasting.

• Financial opportunity: Construction businesses can be very profitable, especially for those who have experience and knowledge in the industry.
• Independence: Starting your own business allows you to be your own boss and have control over your own schedule and work environment.
• Flexibility: Construction businesses can be tailored to fit the specific skills and interests of the owner.
• Job security: Construction is a vital industry, and there is always a demand for skilled professionals.
• Potential for growth: Construction businesses have the potential to grow and expand over time, providing opportunities for increased income and job advancement.
• Fulfillment: Building and creating something that will be used and appreciated by people can be a very fulfilling experience.
• Serving the community: Construction companies help shape the infrastructure of communities and can play a vital role in the development of a region or country.

Note that starting a construction business also requires hard work, dedication, and a willingness to take risks. It is a competitive industry, and success is not guaranteed. It is essential to conduct thorough research and seek professional advice before starting a business.

Risks of starting a construction company

Starting a construction company can be a rewarding and profitable venture, but it also comes with a certain level of risk. Here are some of the potential risks of starting a construction company:

• Financial risk: Construction is a capital-intensive industry, and starting a construction company requires a significant investment of time and money. There is always a risk that the business may not generate enough revenue to cover expenses and turn a profit.
• Market risk: The construction industry is highly dependent on the overall health of the economy. A downturn in the economy can lead to a decrease in demand for construction services, which could negatively impact a construction company’s revenue.
• Operational risk: Construction projects can be complex and require coordination of many different tasks and people. There is a risk that things may not go as planned, leading to delays, cost overruns, and other operational issues.
• Legal and regulatory risk: Construction companies are subject to a wide range of laws and regulations, such as building codes and safety regulations. Non-compliance can result in fines and legal action.
• Reputation risk: A construction company’s reputation is important for attracting new clients and retaining existing ones. Negative publicity or a history of poor quality work can damage a company’s reputation.
• Weather risk: The construction industry is heavily dependent on weather conditions. Delays or interruptions in construction caused by severe weather can lead to a significant loss of revenue.
• Injury risk: Construction is a dangerous industry, and there is always a risk of injury to workers and members of the public. This can result in workers’ compensation claims, legal action, and damage to a company’s reputation.
• Risk of running out of cash: While a construction company is waiting for payments from clients or the government, it may have to pay for materials and labor. This can lead to running out of cash.

You must be aware of these risks and to have a risk management plan in place to mitigate them as much as possible. It is also essential to seek professional advice and conduct thorough research before starting a business.

Common Questions

What are the legal requirements for starting a construction company?

The legal requirements for starting a construction company will vary depending on the location of your business and the scope of your services. In general, you will need to register your company with the Companies and Intellectual Property Commission (CIPC) and obtain a tax reference number from the South African Revenue Service (SARS). You may also need to obtain licenses and permits from various government agencies, such as the National Home Builders Registration Council (NHBRC) or the Construction Industry Development Board (CIDB).

What types of insurance do construction companies need?

Construction companies are typically required to have liability insurance and workers’ compensation insurance to protect against potential accidents and injuries on the job. Some construction companies may also choose to purchase additional insurance, such as equipment insurance or vehicle insurance.

What are some common challenges faced by construction companies?

Construction companies can face a wide range of challenges, including cost overruns, delays, legal disputes, and accidents. Additionally, the construction industry is highly dependent on the overall health of the economy, and a downturn in the economy can lead to a decrease in demand for construction services.

How can construction companies ensure quality and safety on their projects?

Construction companies can ensure quality and safety on their projects by implementing strict quality control procedures, regularly training their employees on safety procedures, and following all relevant laws and regulations. They can also hire independent inspectors to regularly check the quality and safety of their projects.

What are some of the latest trends in the construction industry?

Some of the latest trends in the construction industry include the use of sustainable building materials and methods, the adoption of technology such as building information modeling (BIM) and 3D printing, and the increased use of prefabrication and modular construction.

How can a construction company stand out from its competitors?

A construction company can stand out from its competitors by offering unique services, building a strong reputation for quality and safety, and investing in new technologies and sustainable building practices. Additionally, a construction company can differentiate itself by offering excellent customer service and building long-lasting relationships with its clients.

Related Article: Best Construction Companies in Pretoria

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Licences and permits you'll require to start a construction business.

People will always need things built – homes, commercial office parks, recreational centres. With this comes ample opportunities for those keen to establish a construction company. But – if the frequent news stories tell us anything, it’s that these opportunities are often also exploited by unscrupulous contractors providing shoddy work.

What if you’re not unscrupulous, just ignorant?

Sometimes, you don’t intend skirting the rules, but you aren’t aware that you’re doing it. Today’s blog looks at all the licences and permits you’ll require if you’re interested in starting a legitimate construction business.  

10 steps to starting a business (any business)

Starting a business involves planning, making key financial decisions and completing a series of legal activities, which the following 10 easy steps will help you do.  

• Step 1: Create a business plan
• Step 2: Get business assistance and training
• Step 3: Choose a business location
• Step 4: Finance your business (find government backed loans, venture capital and research grants to help you get started)
• Step 5: Determine the legal structure of your business (decide which form of ownership is best for you: sole proprietorship, partnership, Limited Liability Company (LLC), corporation, S corporation, non-profit or cooperative)
• Step 6: Register a business name (‘Doing business as’)
• Step 7: Register for tax
• Step 8: Obtain business licenses and permits
• Step 9: Understand employer responsibilities
• Step 10: Find local assistance

Your 4 specific construction requirements

There are a few compliance requirements that you would need to get in place when starting a construction company.

• You need to apply for your company registration with the Companies and Intellectual Property Commission (CIPC).
• Once you have all the original company documents in place you can open a bank account and register with SARS for income tax, VAT (if it’s a business with an annual taxable income of more than R1 000 000 must to register for VAT) and employee tax.
• There are a few associations that your construction company can register with such as the National Home Builders Registration Council (NHBRC). Construction companies registered with the NHBRC are recognised as reputable by the public sector and financial institutions.
• If the public sector is part of your target market then you need to register your business with the Construction Industry Development Board (CIDB). The CIDB grades and categorises contractors according to their works and financial capability.

Other operational requirements that you should have in place are:

• a comprehensive HSE policy and a safe work procedure manual
• sufficient public liability insurance cover (the level of the insurance cover needed will normally be stipulated by the client).

How to avoid problems with vendor management

Once your business is up and running, one of the biggest challenges you may have to face during projects is difficulties with vendors or sub-contractors. To be fair, not all the potential pitfalls are the fault of vendors. But, if you follow these guidelines, working with vendors will become significantly less difficult and it will be easier to avoid the bulk of possible problems.

Guideline #1: Don't rely on status reports

Don’t simply rely on status reports. These reports provide only a glimpse of what is really happening. You need to investigate further to gain a proper understanding of the process. In other words, ask for status updates to determine for yourself where the project sits. This may mean more leg work, but it can help to guarantee on-time delivery.

Guideline #2: Give excellent requirements

Don't assume. When working with a new vendor or one that you've worked with many times before, it's incredibly important to have all of the requirements laid out on the table at the start of the project. A common mistake is not providing a full set of requirements that provide a clear understanding of what needs to be done, what the final product should be, and when it is due. Spelling it out to the vendor or contractor may seem like you don't trust them even if you've worked with them in the past. However, by doing so, you can reduce the risk that comes when a vendor says, ‘I didn't know that’. Unclear or incomplete requirements are one of the biggest issues managers face.

Tips to improve your vendor relationships

Improve the overall outcome of any relationship with a vendor by:

• setting up verification milestones that align with payments (this provides a clear understanding of where the project needs to be at each step in the process)
• aligning your expectations for vendors with the expectations your customers have (if you do not work with the very best professionals, you may be unable to meet customer demands)
• knowing when it is time to move on (don't keep working with a company or organisation that cannot meet goals. You are simply setting your business up to struggle in the long term).

Overall, proper vendor management can minimise the risks of any project going wrong. This does take time and effort to build successful relationships with vendors, but it is worth it for the health of your business.

Interested in our Legal Liability courses or Construction Regulations courses? Visit  SafetyCloud for world-leading occupational health, safety, and environmental training  in South Africa.

http://www.entrepreneurmag.co.za/ask-entrepreneur/start-up-industry-specific-ask-entrepreneur/do-i-need-any-licenses-and-permits-to-start-a-construction-company/

https://www.sba.gov/starting-business/how-start-business/10-steps-starting-business

https://www.sba.gov/blogs/how-start-small-construction-or-general-contracting-business

http://www.brighthubpm.com/monitoring-projects/128333-avoiding-problems-with-vendor-management/

Topics: HSE , Construction , HSE best practice

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Company Partners assists South Africa’s Entrepreneurs to become registered, empowered, and grow into sustainable businesses. Specialising in company registration and compliance since 2006, we have expanded our expertise to include accounting, payroll and website design.

We begin with a free consultation, offering tailored support to align with your business objectives. Our 120 compliance services include Shelf Companies, COIDA, Imports/Exports, Business Plans, VAT, and others.

We are dedicated to providing the tools and guidance necessary for businesses to develop and thrive over the long term.

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Frequently Asked Questions

What is the purpose of a business plan.

It is a document prepared by a Specialist Consultant / Writer (who has a comprehensive understanding of companies) that outlines and summarises the financial and operational objectives of the company and practically describes how the company will achieve its goals.

Do I really need a Business Plan?

In simple terms, yes. Not considering the compliance aspect and funding opportunities. The process of the business plan will allow you to have a better understanding of exactly how you are going to start and grow your company to be successful.

What are the Advantages of a Business Plan?

1) A game plan . A business plan can be considered to be a roadmap for the company. It will allow for focus and direction towards one goal, although things may change in the first few months – the end goal will be known.

2) Compliance . Depending on what your company will be supplying, be it service or product, many governmental regulating bodies will request a formal business plan for the specific industry. You can read more about various Company Compliance – here

3) Financing & Funding . To be eligible for funding, investors will want to know all about your company. They will look for things such as who your target market is and, ultimately, whether your business is profitable. A business plan outlines all these points.

Is a Plan necessary if I'm not looking for funding?

Many entrepreneurs are under the impression that a professional plan is purely for financial funding, this is however not the case. At the onset of your venture, a comprehensive plan will help you get a realistic picture of your capabilities and viable strategies. Once your business is off the ground and thriving the way in which you intended it to, your business plan will allow for direction and guidance to continue to thrive.

Meet our Specialist:

Brend Badenhorst has written over 500 business plans for existing and new companies all over South Africa – He is a SETA Business Facilitator with a team of dedicated specialists. They will walk you through the entire process and ensure that you have the correct plan for your company.

We will setup your Plan according to the regulations of:

• All major South African Banks.
• Funding Institutes in South Africa.
• Government Tenders / Contracts in SA.
• The National Industry Regulators like PSIRA.

Signup for a Free Consultation and speak to a Business Plan Specialist today!

Our Plans are designed according to the regulations of:

• Finance / Funding Institutes in South Africa.
• South African Banks (FNB / Standard bank / Nedbank / ABSA). We are Official Partners of Nedbank.
• South African and Government Tenders / Contracts.
• The National Industry Regulator.

Apply above to speak to a Specialist today!

Will I get funding?

We do not guarantee funding. We provide you with a business plan document which is one of the documents required to apply for funding. You can learn more about becoming funding ready in our informative article which was published on Bizcommunity.

Speak to our professional business consultants to help with getting you funding ready today.

Are business plans highly visual?

They are by no means filled with graphics and images, however at certain sections or parts of the plan displaying graphics is highly beneficial to convey a message. At Company Partners, we understand that a visually appealing business plan can be more engaging. Including graphs, charts, and relevant images can help in effectively communicating key data and strategies, making your business plan stand out.

How much does a business plan cost?

The cost varies depending on whether you’re doing it yourself or hiring a professional like Company Partners. We offer tailored services that can accommodate different budgets, ensuring quality and strategic insight. A professionally created plan for a Small Business of approximately 20+ pages will cost R3490.

How can I write a business plan?

Start by defining your business idea, conducting thorough market research, and detailing your marketing and operational strategies. If you have trouble organizing all these different elements into one single document, don’t be afraid to look for quality free templates online. You can also view the Company Partners example to act as a guide you through this process, ensuring that your plan is comprehensive and tailored to the South African market.

What makes a good business plan?

A good plan is clear, concise, and detailed, with a strong emphasis on market analysis and financial projections. The professionals which view your business plan to make a decision whether to invest or fund you needs to have a clear picture of your trajectory and if their investment/money will be well spent. Company Partners ensures that your plan is adaptable and strategically aligned with your business goals.

What is a business plan consultant?

A consultant, like those at Company Partners, specializes in assisting businesses to create strategic and effective business plans. The specialist consultants have years of experience through working in companies to give them an in-depth understanding of how it works. Our experts bring this in-depth knowledge of market trends and financial modelling into the writing process.

Can I hire someone to write my plan?

Yes, and Company Partners offers this service. Our experienced consultants can craft a plan that aligns with your vision and market requirements, providing valuable insights and expertise. The best of all is that we can help anywhere in South Africa.

Should a business plan include a SWOT analysis?

Including a SWOT (strengths, weaknesses, opportunities, and threats) analysis is crucial as it provides insights into your business’s competitive position. A SWOT analysis remains a very effective tool to analyse your company. Company Partners can help you identify these key factors, ensuring a well-rounded and strategic business plan.

What is the difference between a Business Plan and a Company Profile?

The purpose of a Company Profile is to furnish a comprehensive outline of your organization. A biography highlights both personal and professional accomplishments.

A business plan encompasses strategies pertaining to marketing, sales, and operations and used to apply for Funding and Industry regulators.

Construction Business Plan Template

Construction company business plan template.

If you want to start a construction business or expand your current one, you need a business plan.

Over the past 20+ years, we have helped over 10,000 entrepreneurs and business owners create business plans to start and grow all types of construction businesses, including commercial construction, building construction and residential construction.

Construction Business Plan Outline: How To Write a Construction Business Plan

Below are links to each section of a construction business plan:

• Executive Summary – The executive summary is the most important part of your business plan. It’s where you explain what your business is and why it will be successful.
• Company Overview – This section of your construction business plan should include a brief business description, your vision and mission statement, and the company’s core values.
• Industry Analysis – This section of your plan will provide an overview of the construction industry, including market size, growth outlook, major players, and competitive landscape.
• Customer Analysis – In this section of your plan, you will identify and describe your target market(s).
• Competitive Analysis – In this section, you will analyze your competitors and explain how you plan to differentiate your company from them.
• Marketing Plan – Your marketing plan should include an overview of your marketing goals, strategies, and tactics.
• Operations Plan – Your operations plan should describe how you will produce your product or service, as well as the people and resources needed to do so.
• Management Team – In this section, you will introduce the members of your management team and their experience and qualifications.
• Financial Plan – Your financial plan should include your financial statements such as the income statement, balance sheet, and cash flow statement.
• Appendix – The appendix of your plan should include any additional supporting materials, such as market research reports, resumes, licenses and permits.

Next Section: Executive Summary >

Construction Business Plan FAQs

What is the easiest way to complete my construction business plan, where can i find a free construction business plan pdf download, what is a construction business plan, why do you need a business plan for a construction company, what are the sources of funding for construction businesses.

The main sources of funding for a small construction business are bank loans and angel investors. With regards to bank loans, banks will want to review your business plan and gain confidence that you will be able to repay your loan and interest. To acquire this confidence, the loan officer will not only want to confirm that your financials are reasonable. But they will want to see a professional plan. Such a plan will give them the confidence that you can successfully and professionally operate a business.

The second most common form of funding for a construction business is angel investors. Angel investors are wealthy individuals who will write you a check. They will either take equity in return for their funding, or, like a bank, they will give you a loan. Venture capitalists will generally not fund a construction business.

How Do You Start a Construction Business?

What are the keys to success for a construction business.

• Vision & Focus: determine the type of construction business you want to operate and stick to that vision.
• Create your business plan: Your plan will help you set goals and outline how to achieve them.
• Get licensed, bonded, and insured: before you can bid on your first job, you need to investigate and meet the requirements for local and state licenses and do what you need to do to secure them, get your worker’s compensation and liability insurance, and find out how much you need to be bonded for.
• Build a winning team: Hire and train a team of employees with the right skills. Remember that since construction is seasonal and cyclical, you must also be willing to downsize if/when the workload decreases.
• Purchase wisely: be careful not to overspend on salaries and equipment. Consider renting equipment when possible.
• Properly price jobs: Keep factors such as overhead and actual production costs (materials, labor, inspections, etc.) in mind when pricing jobs to ensure a healthy profit on all projects.

CONSTRUCTION BUSINESS PLAN OUTLINE

• Construction Business Plan Home
• 1. Executive Summary
• 2. Company Overview
• 3. Industry Analysis
• 4. Customer Analysis
• 5. Competitive Analysis
• 6. Marketing Plan
• 7. Operations Plan
• 8. Management Team
• 9. Financial Plan
• 10. Appendix
• Construction Business Plan Summary

Other Helpful Business Plan Articles & Templates

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How to start a construction company in South Africa

Starting your own business may seem daunting, but it can open new doors and provide newfound financial stability and freedom once you have built an established company. A construction company offers a service that is always required, with ongoing employment opportunities. Here, we discuss how to start a construction company in South Africa .

TABLE OF CONTENTS

What do you need to start a construction company in south africa, what certificates are needed for a construction company, how much money is enough to start a construction company, how to get construction projects in south africa.

Although starting your business may seem intimating and complicated, the process can be easily streamlined if you know where to start and what the process entails, including the relevant documents and verifications.

Here, we dissect everything you need to know about how to start a construction company, including how to start a construction company with no experience, how to register a construction company and how much it costs to start a construction company in South Africa.

How to start a construction company in South Africa with no experience?

Starting a construction company with no experience is easier than you may think. The easiest way to approach the process is by doing sufficient market research. Research precisely what documents you need, how to process them and how to navigate funding if required.

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Joining any relevant associations to help network will also offer you further information on the process and help if needed.

Once you have done the necessary market research, you should first register your company . You need to register it at the Companies And Intellectual Property Commission (CIPC), which will provide you with a company registration number and relevant documents for compliance.

Once that is done, you must register the company for tax with SARS to get an income tax number and tax clearance certificate. Following this, setting up relevant B-BBEE documentation can greatly help your company . You must also register with the CIDB (Construction Industry Development Board) to work in the public sector/apply for tenders.

You can then obtain a Letter of Good Standing, which shows you are registered with the Workman’s Compensation Fund and also shows financial responsibility. You must register with the Department of Labour for COIDA (Compensation for the Occupational Injuries and Diseases Act) to do this.

SRD Reconsideration status check and registration in 2024

Finally, you need to register with the National Home Builders Registration Council (NHBRC) to verify that your organisation complies with all of the necessary guidelines and rules to provide services safely for all involved.

What qualifications do you need to start a construction company?

Knowing what qualifications you need to start a construction company in the country may help you feel more at ease. Luckily, you do not need to have any specific degrees or diplomas to begin your own company as an individual.

Still, it does help when discussing why your company is worth working with and investing in through a business plan regarding any possible business and marketing qualifications. As mentioned earlier, you would need to have the relevant legal documentation and certifications as a company before you can operate and obtain tenders.

To obtain an official construction certificate in South Africa that shows your company is fully qualified and legally equipped to take on tenders, these are the documents you need:

Top 15 courses that are in demand in South Africa in 2024: Best highly paid opportunities

• COID registration
• An MBSA membership
• VAT registration for your company
• CIDB (Construction Industry Development Board) registration
• A Letter of Good Standing
• B-BBEE affidavit or BEE certificate
• A tax clearance certificate
• NHBRC registration

It is estimated that you need a few million Rands, at least, to begin a functional, well-equipped construction company that can provide adequate services. This may be a hefty cost for many individuals. Therefore, knowing how to start a construction company with no money in South Africa may be more helpful.

If you are short on funds, you could turn to investors or potential stakeholders to assist in growing your company. Creating a business plan for a construction company in South Africa will show potential investors how they would benefit from the joint venture professionally.

How to become a NASCAR driver: requirements, sponsors, steps, where to start

Once you have established a construction company, you may wonder how to implement the next natural step of obtaining clients. After you have registered with the CIDB, they provide business owners with the added benefit of any construction tenders available in your area, which is immensely helpful.

However, keep an eye on any tender advertisements and specifically research any organisations that use construction companies, especially if your niche services can be of use to them.

Knowing how to start a construction company in South Africa helps you streamline the process, saving you time and effort. Thanks to all of the available information about the process online, starting your own construction business has never been easier.

READ ALSO: How to check UIF payout

If you are struggling to find work, utilising the Unemployment Insurance Fund (UIF) will help you alleviate any financial strain you may be under while in-between jobs.

Briefly.co.za detailed how to check UIF payout and the relevant, simple steps you can take to check your UIF TERS payment status.

Source: Briefly News

Justine De Lange (Lifestyle writer) Justine De Lange has over 6 years of experience in lifestyle, corporate and freelance writing. She started at Now Media for their lifestyle publication 'Let's Go', then joined 'travSIM' and 'Metavaro'. She now writes for Briefly News as a content writer, working with beats such as studies, services, business tips, and celebrity biographies (joined in 2022). In 2023, Justine finished the AFP course on Digital Investigation Techniques. You can contact her directly via [email protected].

Don't bother with copy and paste.

Get this complete sample business plan as a free text document.

Construction Business Plan

Start your own construction business plan

Fosse Commercial Contractors LLC

Executive summary executive summary is a brief introduction to your business plan. it describes your business, the problem that it solves, your target market, and financial highlights.">, opportunity.

Customers in the Houston area are in need of beautiful office buildings, warehouses, public works etc. The area is expanding rapidly and they need a company that can provide high quality work and materials to build the spaces that were needed.

Fosse Commercial Contractors (FCC) strives to offer the finest quality design, site preparation, cost estimates, construction, repair, and alteration to clients needing large scale construction services, whether it be office buildings, warehouses, large apartment complexes, public works, etc. Fosse maintains the highest standards of service in the commercial construction industry.

The Houston area is booming at this moment, business has grown in the area for the last few years and is expected to continue for at least the next four years. This makes for a very attractive market for Fosse Commercial Contractors.

We will be concentrating on the customers that will provide us with the greatest margin, in other words those clients desiring office building construction. This is the fastest growing segment of commercial clients requiring our services. The other categories that we will serve include the restaurant segment, the special facilities segment, and all other potential commercial clients.

Competition

Currently we have three major competitors within the Houston area. These are TNT General Contractors, Texas Specialty Construction, and Polanski Construction. Each of these companies targets the same clients as Fosse and each has a fine reputation for customer satisfaction. However, the market in Houston is growing so fast that the demand is currently greater than supply. This is an excellent opportunity to gain market share and a defensible position in the industry.

In the construction industry the primary ways to compete are through low cost or better project management. One of the most important processes for winning a contract is the bid process. Fosse has a unique competitive edge over most of its competitors. Mr. David West, FCC’s General Projects Manager, is the nephew of Charles Nunn, who owns McHoughton’s Lumber, one of the Midwest’s major construction material suppliers. Through this relationship, Fosse has been able to gain a very advantageous supplier contract allowing Fosse to obtain its materials at a significant discount. With this edge the company can underbid its rivals and achieve a low cost leadership role.

Expectations

Fosse has only a small amount of debt and intends to stay that way. We expect to see increased profits from our market shift efforts by the end of Year 2. Over the next three years we expect lower profits as we make inroads into this tough market. We estimate that we will be able to reduce marginal costs and increase overall profitability by Year 3 or Year 4 as we grow and take advantages of economies of scale.

We also think we can grow. For this next year we intend to significantly increase overall revenues to close to $900K, from $572K this past year. We have the market, the people, and the capabilities. It’s time to grow.

However, growth is expensive. We are prepared to inject new capital to support losses for most of this first year. We can turn a profit for years 2 and 3.

Financial Highlights by Year

Problem & solution, problem worth solving, our solution.

Fosse Commercial Contractors LLC is a small construction company formed from the merger of Fosse Painting & General Construction and West General Contractors. The company has successfully operated in the Houston area for the past ten years working on both small and large scale construction, repair, and alteration projects focusing on residential contracting. With the business boom that is occuring in our local area and the desire to improve overall profit margins, the company is planning to shift its target market from residential clients to the larger commercial customers. This business plan will lay out our goals and tasks to make this transition successful and create enough market share to succeed in this highly competitive market.

Target Market

Market size & segments.

Market Segmentation 

At the moment our potential list of clients includes all the various businesses in the Houston area and its suburbs. According to the Texas Small Business Association there are 6,512 firms of all types and sizes in the surrounding area. We will concentrate on the customers that can provide us with the greatest margin, in other words those clients desiring office building construction. This is the fastest growing segment of all the commercial clients requiring our services. The other categories that we will serve include the restaurant segment, the special facilities segment, such as gas stations, and theaters, and a category which we will call "general", encompassing all other potential commercial clients.

Target Market 

Since office building construction has the highest average profit margin, we will focus most of our marketing and servicing toward these customers. Usually these clients require the largest projects in scope, land use, and cost. In addition, they tend to be the most sensitive to completion times. Therefore, we plan to accommodate these clients through a well established and expeditious permitting program, strict cost accounting and supply management, and intensive and comprehensive project management capitalizing on Fosse’s experience in the field.

Current Alternatives

Currently we have three major competitors within the Houston area. These are TNT General Contractors, Texas Specialty Construction, and Polanski Construction. Each of these companies targets the same clients as Fosse and each has a fine reputation for customer satisfaction. However, the market in Houston is growing so fast that the demand is currently greater than supply. This is an excellent opportunity to gain market share and a defensible position in the industry.

One of the greatest limiting factors in this industry is its strong seasonality. During the winter months, contracts and production drop off sharply, increasing the company’s short-term risk of cash flow shortfall.

Our Advantages

In the construction industry the primary ways to compete are through low cost or better project management. One of the most important processes for winning a contract is the bid process. Fosse has a unique competitive edge over most of its competitors. Mr. David West, FCC’s General Projects Manager, is the nephew of Charles Nunn, who owns McHoughton’s Lumber, one of the Midwest’s major construction material suppliers. Through this relationship, Fosse has been able to gain a very advantageous supplier contract allowing Fosse to obtain its materials at a significant discount. With this edge the company can underbid its rivals and achieve a low cost leadership role.

Keys to Success

The local commercial construction market is booming at the moment. In order to achieve a defendable position in this environment, Fosse must concentrate on the following tasks.

• Secure at least five large scale commercial contracts over the next three years.
• Expand our customer base through expansion into other geographic areas to retain a sufficient level of profitability.
• Increase marketing expenditures by 15%.

Marketing & Sales

Marketing plan.

The most critical part of sales is not the marketing, but the bidding process, in which companies offer their designs, services, material quality, project timeline estimates, and costs. The company that offers the best combination of these variables is the most likely to get the contract. Therefore very detailed project planning, including supply agreements, labor needs, subcontractors, presentation, and other factors, is crucial for Fosse in winning contracts. We will be designing a standardized method for doing this with all our contracts, with an emphasis on quality, timeliness, and low cost to outbid our competitors.

Milestones & Metrics

Milestones table.

Key Metrics

Key Metrics 

• The number of large scale contracts per year. 
• New construction – we need over 50% of our business as new construction. 
• #of repairs – we would like to repair other’s work but we need to repair ours too. 

Ownership & Structure

Fosse is a Limited Liability Company registered in the state of Texas. Fosse Commercial Contractors, LLC is exclusively owned by Mr. Robert Fosse (50%) and his partner, Michael West (50%). The company is expecting to alter to a Class C corporation chartered in Texas. This will create greater investment opportunities through the acquisition of investment capital from a limited number of shareholders.

Company History

Fosse Commercial Contractors, LLC began in the Houston area when Mr. Robert Fosse, who had worked in the residental construction business for ten years began his own company, Fosse Painting and General Construction in the Houston area. For the next eight years the company grew slowly, working mostly on small scale residential projects while gaining a reputation for quality services and reliability. Then the original company was merged with another small-scale local company, West General Contractors and the company began to bid successfully for larger projects. The company maintains a General Contractor’s license in the state of Texas.

The company’s management came to the conclusion that the firm had grown sufficiently to alter its primary target market from the residential construction segment to the higher margin office and commercial construction segment. The company plans to implement this change by the middle of 2004.

Past Performance

Management Team

Fosse’s management consists of Mr. Robert Fosse and Mr. David West. Mr. Fosse will concentrate on client contacts and bidding along with overall management of the company. Mr. West will be the company’s General Project Manager, coordinating all project management and concentrating on cost controls, suppliers, day-to-day project supervision, labor relations, etc. Mrs. Janet Fosse will be our office manager, handling client satisfaction,invoicing, permitting, and general book keeping. Most of our labor needs will be met through Contractor-Temps a nationwide temporary labor company.

The company is planning to expand it personnel to add a number of job superintendents as soon as the number of projects increases. These superintendents will have the following duties:

• Direct supervision of all work at the job site.
• Quality control.
• Scheduling subcontractors and material deliveries.
• Verifying and insuring that all work is done in accordance with plans.
• Insuring that all work is performed in accordance with all OSHA guidelines.

In addition, as business increases, we will hire additional job superintendents and project managers as needed.

Personnel Table

Financial Plan investor-ready personnel plan .">

Key assumptions.

 We do not anticipate a significant increase in profits until our 3rd year as we will need time to penetrate our new market. We plan on basing dividend payouts on overall performance and health of the company and may decide to retain such earnings for future growth.

Revenue by Month

Expenses by month, net profit (or loss) by year, use of funds.

We will use the influx of capital to expand into a new market. There is a lot of opportunity to grow and be successful. We need to buy equipment and get experts and do the website to refocus our brand

Sources of Funds

We will be using our sales and cash from our already established business to expand and make our business more profitable. 

Projected Profit & Loss

Projected Balance Sheet

Projected Cash Flow Statement

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6 Steps to Starting a Construction Company in SA

If you want your construction company to be eligible for public contracts and tenders, you’ll first need to follow a few formalities to ensure you’re tax compliant, operating legally and protecting your employees. This can be overwhelming if you’re new to the space, so we’ve broken down the 6 steps you need to follow below.

Step 1:   CIPC Company Registration

Firstly you need to make your company official by registering it at the CIPC, to obtain your company registration number and documents, which will be used to complete all of your compliance registrations.

Register your company

Step 2:   Tax Clearance Certificate

After registering your company at the CIPC, you must now finalise your registration at SARS, to activate your income tax number and obtain your tax clearance certificate.

Get a Tax Clearance Certificate

Step 3:   B-BBEE Documents

Set up your B-BBEE documentation. If your company earns below R10 million per year, it’s seen as an EME company and would only require a B-BBEE affidavit, which acts exactly the same as a B-BBEE certificate.

Get a free B-BBEE Affidavit

Step 4:   CIDB

Registering with the CIDB (Construction Industry Development Board) is compulsory if you plan on working in the public sector or applying for tenders. When you register your company at the CIDB, you indicate what type of construction your company specialises in. Once registered you will be notified via the CIDB of any construction tenders available in your area.

Register with the CIDB

Step 5:   Letter of Good Standing

A Letter of Good Standing serves as proof that your company is registered with the Workman’s Compensation Fund and that all your payments are up to date. Before you can get a Letter of Good Standing you’ll need to register with the Department of Labour for COIDA (Compensation for the Occupational Injuries and Diseases Act). When you first register with COIDA you will receive a Letter of Good Standing for free, but it needs to be renewed between the 28th of February and the 30th of April every year. When you register with COIDA you will also need to pay an NOA (Notice of Assessment) directly to the Department of Labour. This fee is based on the total salaries paid by the company and the risks the employees of the company might face when performing their duties.

Get a Letter of Good Standing

Step 6:   NHBRC Registration

Registration with the NHBRC (National Home Builders Registration Council) must be completed in order to indicate your company follows all of the required rules and guidelines to safely perform maintenance to structures or to build new ones.

Register with the NHBRC

Bonus step:   Register with the CSD

Now that you’re officially registered, you can also register on the CSD (Central Supplier Database). The CSD is the official database of all organisations, institutions and individuals who wish to provide goods and services to the government, and once registered you will be notified of any available tenders.

Register with the CSD

If you’ve completed all the above steps, congratulations! You now own a fully compliant construction company and you can now begin to apply for public contracts and tenders 🔨.

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A Free Business Plan Example to Launch Your South African Business This free Business Plan example provides you with a sample business plan as well as guidance on how to write a business plan and important sections to include in your plan.

By Catherine Bristow Scott May 28, 2019

You're reading Entrepreneur South Africa, an international franchise of Entrepreneur Media.

It pays to plan.

Research conducted by Harvard Business Review found that "entrepreneurs who write formal plans are 16% more likely to achieve viability than the otherwise identical non-planning entrepreneurs."

Simply put, writing a business plan could make the difference between business success and failure – which is why planning now could pay dividends as your business gets off the ground.

But where do you start when writing a business plan? In this comprehensive business plan example, we provide you with what to include in your business plan and a sample business plan to help you to create a compelling plan for your start-up.

1. Executive Summary

If you have seven seconds to make a strong first impression in person, an Executive Summary will be the make-or-break section of your business plan – so make this section count.

As a brief outline of your company's purpose and goals, the Executive Summary should generally take up 1 to 2 pages of your business plan. Some key components to include in your business plan are:

• A company description
• A brief summary of your products or services
• The company objectives
• A short but thorough overview of the market
• A justification for viability, particularly "why now?"
• A snapshot of your business's growth potential
• A short description of the organisation team
• Your marketing plan
• Financial projections

Importantly, your Executive Summary must clearly depict the Problem, the Solution, and carry a sense of timeliness – why now should your business be considered as the solution to solve this problem.

NOTE: The following Business Plan Example is based on a fictional company. Figures will not reflect the exact financials of a similar company.

Example of a Business Plan Executive Summary

Snug Sneakers is a sneaker shoe range based in Cape Town that currently focuses exclusively on selling locally produced men's and women's custom sneakers.

The business was founded by David Smith and Stewart Bruce, who have both been working within the retail industry for over 20 years, David Smith, a serial entrepreneur has also founded successful brands – Creative Caps and women's cycling brand Pedal Power.

The brand is currently selling online, however has also recently diversified to selling in independent shoe shops.

The company is projecting to sell R2 million in year 1 and R8 million in three years' time. Additionally, there are expansion plans within year 2 to set up distribution networks in Johannesburg, and Durban in the early part of year 3.

Both David and Stewart are social entrepreneurs at heart and believe in providing sustainable jobs for impoverished communities.

As such, the company has started a recycling and training academy in Khayelitsha, where consumers can return old sneakers that are then repaired by Khayelitsha residents and donated to those in need of shoes. This also provides learners within the academy with shoe-making and recycling trade skills.

Industry research has shown that, on average SA consumers own 4 pairs of sneakers, with 4 in 4 consumers indicating that shoe fit and sizes vary across brands.

3 in 4 consumers indicated that their number one concern when purchasing is having to "settle' for the best fitting shoe, despite the fit not being 100% correct.

Based on these and additional industry research statistics, the company's sneaker products are driven to provide the best shoe fit, with the tagline of "shoes that fit so good, you'll never go barefoot again.'

The main competition to Snug Sneakers comes from 1 local brand, SuperStars, and 2 overseas brands Sassy Sneakers and Rock Your Sneakers.

Although SuperStars supports sustainable use of local manufacturers, the competitor does not provide custom fit sneakers. Sassy Sneakers and Rock Your Sneakers both offer custom fit sneakers, both brands are manufactured in China and do not promote sustainable, social conscious value propositions.

The primary means of marketing will mainly be focused on digital marketing, through evidence-based approaches, including search engine optimisation, Google Ads, Facebook Advertising as well as utilising social media channels that have proven very popular for the company, including Instagram, Pinterest and Facebook.

The locally sourced raw materials, which include cotton, rubber and leather, will be supplied from a sustainable cotton mill and tannery in the Limpopo Province.

Funding for the company was derived through the 2 founders, as well as private investment.

2. Business Overview and Objectives

Creating an overview of your business when you are already established makes it easier, but it may be a little harder when you're either just starting out or haven't even kicked off your operations yet.

When you're just starting out, think about your products and services as your starting point.

• What will you be providing your market with?
• How will you be sourcing/ producing these items?
• What do you need to have in place before you can start selling your products?
• Who will be distributing/ manufacturing your products?
• Importantly, who will your target market or customer be?

In our example business plan, Snug Sneakers serves both retail and online customers, although the bulk of the business is through their online clientele.

This means that Snug Sneakers will need a secure e-commerce platform and a website that has carefully considered the user journey when buying custom sneakers.

The company will also need employees to assist with technical challenges, customer support, and warehouse staff for the packing and distribution of their products.

Similarly, you would need to consider the following when identifying their business objectives:

• What industry will you operate in?
• Who will be your customer?
• What is the problem that you will be solving?
• How will you solve this problem?
• Where will my business be located?
• What equipment and resources will I need within my business?
• What type of employees do I need?
• How will I differentiate my offering from my competitors?

After answering these questions, you will have a better understanding of what it is that you will be offering and what you need to make it happen. A summary of these points will make up your Business Overview and Objectives for your Business Plan.

Example of a Business Overview and Objectives

Snug Sneakers, based in Cape Town South Africa, is focused on providing sustainable, locally produced custom footwear to South Africa, and internationally through its e-commerce platform and local distributor network.

Founded by entrepreneurs David Smith and Stewart Bruce in December 2017, from Stewart's garage, Snug Sneakers grew exponentially within 1 year from 5 online purchases a month to an average of 200 per month within 12 months.

From the company's rapid growth, it became very clear to the founders that there is a gap in the South African market for locally produced, quality sneakers.

The founders' vision for Snug Sneakers is to become a socially conscious, sustainable brand that supports the South African economy by buying 80% locally produced raw materials.

Additionally, the duo noticed a gap in the market where consumers were looking for custom-fitted shoes and remain loyal to the brand that fit them best. To this end, Snug Sneakers offers a wide range of shoe sizes including quarter and half sizes to ensure that all customers find the right snug fit for their feet.

The overarching philosophy and ethos for the company are:

• "Soul sneakers' that allow customers to purchase sneakers that promote social consciousness.
• "South African sourced' sourcing locally produced raw materials that provide job sustainability.
• Superior sneakers' ensuring that customers still get a high-quality product that outmatches popular brands in workmanship and quality.

Company Status

Snug Sneakers was registered as a PTY (Ltd) on 1 December 2017. The main directors are David Peter Smith and Stewart Owen Bruce. Company shares are held by the founders.

The company currently operates out of rented commercial property in Blackheath, Cape Town.

Company Objectives

Snug Sneakers is currently selling custom sneakers primarily through its online store https://www.snugsneakers.co.za , with market penetration nationally, and highest market penetration in Johannesburg and Cape Town. Sporadic orders have also been received from the USA and the United Kingdom.

The company has also partnered with 3 independent shoe and clothing retailers focused on selling locally-sourced South African apparel.

The company has identified a 2 phased upscaling approach for growing sales and operations:

• Increase online sales by 40% within a 6-month period of 2019
• Increase brick-and-mortar retail partnerships from 2 stores in Cape Town to an additional 4 stores in Johannesburg by year end.
• Increase online sales by 50% by end of year 2020
• Explore opening up a brick-and-mortar store in the Canal Walk Shopping Centre, Cape Town
• Increase brick-and-mortar retail partnerships to include 1 store in Durban.

3. Products and Services

In this section, you will be unpacking your product and services offering, especially your key product differentiation from your competitors. Importantly, in this section you will also need to validate why your product is needed by your customers.

If you have applied for any patents, copyrights, or trademarks, you would also include these in this section.

Products and services that already exist may not need a deep analysis of what they are within your business plan.

However, if you're creating a completely new product or service (if you were the first Uber of the world), carefully detail in this section what your product is about, it's uses and the value it brings to the market so your readers will be able to evaluate the value of your product and services.

Some important aspects to cover include:

• The anticipated timeline to bring your new product to the market.
• What differentiates your product or service from those already available in the market.
• What will your operating costs be and profit margins.
• How will you source/ manufacture your product.
• How will the product be distributed to customers.

Example of Products and Services

Snug Sneakers will provide a line of custom sneakers for both men and women. The main product lines include:

• Casual Range: Everyday sneaker footwear
• Active Range: Active gym range of sneakers
• Fashion Forward Range: Formal but funky range of sneakers

Current pricing of the sneakers as follows:

• Casual Range: R550
• Active Range: R950
• Fashion Forward Range: R850

Competition

There are three main competitors that have been identified within the market. These include:

Local competitor:

1. SuperStars 40% locally made raw materials, with 60% of the raw materials originating from China. The brand however does not provide custom-fit sneakers.

Foreign competitors:

2. Sassy Sneakers are based in Australia, with the product line produced in China. The company offers custom fit sizes, however customers have to pay extra for the custom fit and product quality is low.

3. Rock Your Sneakers is a US based company, with the product line produced in China. The company offers some custom fit sizes, however the sizes are limited and the product is only available to South African's online and with a long lead time to delivery.

Snug Sneakers products have a unique differentiator within the market:

• A greater range of custom fit sizes ranging from ¼ - to half sizes as well as broad and narrow width ranges.
• The company will be the only brand within South Africa to offer 80% locally manufactured sneakers.
• Quality of the products is superior to the current locally-made competitor, due to locally sourced high-quality raw materials.

Future Products

The company has also been looking into introducing a line of sneaker care products to assist customers in increasing the longevity of their purchases.

4. Competitive and Market Analysis

Providing evidence that there is demand for your product or service is one of the most critical components of your business plan. Key to this is understanding your market and your competition within that market.

Embarking on market research requires you to have a deep understanding of what your market is and the opportunities inherent within it. You should be able to define:

• Target Market. The types of customers you will be targeting with your product or service.
• Market Need. If there is demand for your products and services and whether this is increasing or declining.
• Competition. The positioning of your competitors in the market and how you will differentiate your offering from them.
• Barriers to Entry. What will prevent someone else from providing the same offering or better.
• Regulation. Regulations that will be applicable to the industry that your business will be operating in.

Example of a Market Analysis

Target market.

With our initial line of casual, active and fashion forward sneakers, we're looking to target the following consumer segment:

• Age: 16 -36
• Digital Savvy: Researching and shopping online is part of this customer's DNA. The target market is also very active on social media platforms such as Instagram, Pinterest and Facebook.
• On Trend: Fashion forward and looking to illustrate their unique personalities, the target market is always looking for fashion to express their uniqueness.
• Social Consciousness: The target market is proudly South African and are highly conscious of the socio-economic issues and have a keen desire to take part in improving the SA economy, uplifting communities and supporting local initiatives.

Market Need

According to a Global View Research Marketing Report, the global athletic and leisure footwear market size was valued at USD 67.8 billion in 2017. The report found that this value is expected to expand at a CAGR of over 8.0% from 2018 to 2025.

The ever-growing awareness with regards to the health benefits of sports and fitness activities, as well as an expanding retail e-commerce sector globally, including increasing levels of disposable income amongst millennials are estimated to be the key reasons for increasing market growth in this market.

Additionally, the Global Sneaker Market 2018 Industry Trends and Sales report found that although the global brands reported increased profit margins in 2017, these have decreased by 1.5% from 2016.

On the other hand, independent Sneaker retailers have reported a 15% increase in sales, particularly online, in 2017, indicating that consumers are moving away from global brands to pursue lesser known boutique footwear retailers.

• SuperStars is based in Johannesburg and provides sneakers with 40% locally made raw materials, with 60% of the raw materials originating from China. The brand however does not provide custom-fit sneakers.
• Sassy Sneakers are based in Australia, with the product line produced in China. The company offers custom fit sizes, however customers have to pay extra for the custom fit and product quality is low.
• Rock Your Sneakers is a US based company, with the product line produced in China. The company offers some custom fit sizes, however the sizes are limited and the product is only available to South African's online and with a long lead time to delivery. (Repeated above)

5. Marketing/Sales Strategy

You're on the right track when you have established that there's a market for your product and service and you have identified who your target market is quantifiably, but how will your market segments know to look out for or even buy your product and services?

This is where your marketing and sales strategy comes into play.

A well-defined marketing strategy goes beyond simply advertising your product and service – it includes a deeper understanding of how your customers will view your brand, what is the best way to reach your customers, the benefits that your customer will receive from using your service or buying your product.

Your marketing strategy must also include the budget for your marketing and sales efforts, whether you will require sales staff to sell your products and offer post-sales support, as well as how you will measure your marketing and sales efforts to evaluate their effectiveness.

Example of a Marketing Strategy

Marketing plan.

• Search Engine Optimisation : Our website pages will be optimised for search engine rankings, with the objective to rank within the top 3 search positions for keywords "custom sneakers", "custom size sneakers" and "custom made sneakers".
• Paid Search : Snug Sneakers will be investing in Google Ads and Facebook Advertising and well as Programmatic Advertising to increase landing page conversion rates.
• Social Media : We will be establishing a targeted social media strategy to increase followers across the social media platforms that have shown the highest engagement with the target market. High frequency posts will be created target at highest engagement times to increase engagement and brand awareness.
• Business Network : We will partner with independent apparel and footwear retailers to drive link building and link sharing both on website and on social media.

Customer Value Proposition and Value Differentiator

Although there is one locally produced sneaker competitor within the market, the founders believe that the customer value proposition being brought to the market is a unique offering and therefore a strong differentiator within the market.

The founders are cognisant that without this differentiator, the only differentiator will be price, which will ultimately have a negative impact on profit margins.

As a unique differentiator and value proposition, Snug Sneakers provides customers with Sneakers with South African Sole, leveraging the Proudly South African heritage and support for local initiatives to help grow South Africa's job economy and promote community upskilling and learnership programmes.

Additionally, Snug Sneakers will ensure that the quality of the products far outweighs those of global brands manufacturing in China. The most important differentiator, however is the ability to custom size shoes to each individual's unique size requirements.

6. Staffing and Operations

Strategy is irrelevant without execution – which is where your Operations Plan comes into play in your business plan. How will you serve your customers, while keeping your operating costs low enough to make sufficient profitability?

Your Operations Plan will detail how you will manufacture, staff, fulfil and stock your products, including your day-to-day operational requirements. Ultimately, this section describes how you will run your business.

Some questions to answer in this section include:

• Where will your operations be based?
• What is your management structure?
• What are your staffing requirements?
• What equipment, facilities and supplies will you need?
• How will you establish your suppliers?
• What will be the operational changes required should your company grow?
• What will your production methods entail?
• How will you service/ deliver goods to customers?
• What regulatory requirements must be in place? (Licences, permits etc.)
• How will you manage your inventory levels?

Example of Staffing and Operations

Management team.

David Smith is a serial entrepreneur who founded successful and well-known brands Creative Caps and women's cycling apparel Pedal Power.

David graduated from Stellenbosch University with a B Comm in Economics and went on to study an MBA at GIBS Business School. David heads up Snug Sneakers as the Chief Executive Officer (CEO).

Stewart Bruce has worked in the retail industry as a Senior Designer for well-known retail brands, including Puma and Sketchers.

With over 20 years' experience in designing active and casual footwear, as well as sourcing and overseeing materials for the product range, Stewart brings excellent experience to the management mix as Chief Design Officer.

7. Financial Projections

The bottom line counts the most when it comes to writing your business plan.

Without the numbers to prove whether your business will be profitable or not, potential investors or lenders will have a difficult time objectively deciding if your business will be a sound investment.

Aside from persuading potential investors, crucially, the numbers that you have crunched will also indicate whether you have a viable business.

There are five basic reports or cash projections to include in your business plan:

• Income Statement
• Balance Sheet
• Cash Flow Statement
• Operating Budget
• Break-Even Analysis

It's important to come up with credible financial projections for your business to illustrate that it is feasible.

One way to tackle this section is to break down the figures into various components, such as by sales channel or target market segment.

At this stage, you won't be able to supply exact figures, because you're still estimating your future financials, but by breaking down your guesses into components you will be able to determine a more realistic figure for each component, rather than hazarding guesses as a whole.

The business plan should be an ongoing, living document that can be used as your guide for running your business. It requires continuous adjustment as your business changes and grows.

Entrepreneur Staff

Sales Enablement - Content Division Manager

Catherine Bristow Scott is the Content Division Manager for Entrepreneur South Africa. With specialist expertise in developing SEO content, effective sales enablement content to drive lead generation, as well as digital strategy, Catherine brings an in-depth understanding of developing both written and video content to assist businesses in remaining competitive and growing their revenue.

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How To Start A Construction Company In South Africa (2023)

Construction is a very important sector, not just in South Africa, but all over the world. It involves building houses and offices for people to occupy. The demand for housing can never be abated; people will always need houses and so investing in a construction company will always be a good investment. Expectedly, you are not the only person that wants to delve into construction; many young entrepreneurs have discovered this as a very viable venture.

 But of course, being such an important venture, there has to be some kind of regulation. Otherwise, the government would just sit around while random people build flimsy structures which would endanger the populace, and do more harm than good. Even though the purpose of the regulation is not to stop you from becoming a construction contractor, it is quite possible to become overwhelmed by the amount of paperwork required to apply for construction tenders and contracts. However, if you are determined, you can successfully get your construction company registered, and start the business of constructing houses and offices; making your money, and contributing your bit to the development of society. 

How To Start A Construction Company In South Africa

This article will tell you what you need, help you identify where to get them, and how to go about it. It does not matter whether you’re an informal business that wants to step up, or an entrepreneur looking to start a new construction company in South Africa.

What are the Requirements to Start a Construction Company in South Africa?

You need to comply with industry regulators. Essentially, you can group the Compliance Documents into two distinct parts: the first part is general. You need to register your company the same way any other business would need to. That would enable you to do business as a Pty Company, pay tax to SARS, and legally employ staff.

The second part of the paperwork is industry-specific; and relates to the construction industry in South Africa; this documentation will help you successfully make tenders and contracts. Of course, not every tender you make will require you to provide documentation proving the validity of your establishment, but it is a good idea to be duly documented.

Anyway, let us present a list of the documents that you need to legally and properly operate as a construction company in South Africa.

Section 1: General Documentation

1. Company Registration (register at the CIPC)

There are various types of businesses recognized in South Africa, however the most suitable for a construction company is a PTY company. This is what most construction companies use, and it will give you the credibility you need to get your tenders accepted. The benefit of a PTY company is that it gives you independence from your company and your company from you. Registering for a Pty Company means that you are taxed separately from your company and that your company can be sued instead of you. That is a good thing because if trouble comes as a result of your work, you don’t have to face the penalties personally.

While is cheaper to register a business rather than a company, you would not appear very professional to clients, and also as a Sole Proprietor. This means you need to submit your expenses and your income as part of your personal taxes to SARS every year. Furthermore, if the taxman or a client takes up the issue, you would personally be responsible.

As you have seen a PTY company is your best and safest bet when it comes to getting a company registered, especially as you are starting a construction company.

2. Employer Tax Registration (register at SARS and/or the UIF Office)

As a construction company, you will be hiring people to work with you, and that means you have to take care of them and pay something called an employer tax. Furthermore, you may also need to register for SDL (Skills Levy Development) or UIF (Unemployment Insurance Fund). This will require you to make very small monthly contributions for each employee. This is like a safety net that every concerned employer subscribes to. The SDL adds to a fund that’ll allow your employees to pursue training that can help them advance their careers. On the other hand, the UIF is a fund that takes care of your employees in the form of offering them employee temporary financial relief if they ever lose their job with you.

Technically, you may not be required to contribute to the UIF fund if your employees work for you less than 24hours a month. You can also be exempted from SDL if you expect your total salaries to be less than R500 000 for the next 12 months.

3. B-BBEE Affidavit or Certificate (register with a Commissioner of Oath or with the CIPC)

This one depends on how much money you are making: If your business’s turnover is less than R10 million in a year, then you don’t need a B-BBEE Certificate as yet. You do however need an Affidavit. You can just fill out a B-BBEE Affidavit and have it signed by a Commissioner of Oaths. This affidavit will serve as your B-BBEE certificate until you exceed a yearly turnover of R10 million. With that kind of money passing through your company you need an official B-BBEE Certificate.

4. Letter of Good Standing  

A Letter of Good Standing is a document that indicates that you’ve registered with the workman’s Compensation Fund and your payments are up to date. This will help you look solid when you make tenders for contracts, and also protects you against very serious lawsuits.

The Workman’s Compensation Fund is a form of national insurance that is designed to provide financial compensation for your employers if they are harmed at work in any way. Of course, you will agree that the construction industry can come with some amount of risk of bodily harm, and so it is a good idea to make these provisions against that.

Because property developers and companies want to be sure that if any injury should happen to your workers they will not be responsible, so are going to need to show them this documentation so that they can go ahead and give you the jobs.

5. VAT Registration (register at SARS)

Some companies just go ahead and register for VAT as soon as they are formed. However, the truth is that VAT Registration is mandatory only when your company’s turnover/sales cross the R1 million mark.  Before you hit that milestone, it’s completely voluntary.

Section 2: Construction Documentation

1. CIDB Register for Contractors

The Construction Industry Development Board (CIDB) registration is compulsory. This registration is required by South African law (Act 38 of 2000) for all construction companies. This registration will help you apply for contracts and tenders.

However, you do not need this if you want to build houses for your personal use, or to rent, or to sell. You also do not need this registration if you are only focused on providing labour or building materials for building companies.

As a full-fledged construction company, you need registration. The CIDB has the responsibility to ensure that there are national standards. They maintain the Code of Conduct that all construction companies uphold across South Africa, and also they help keep track of which contractor builds what, so as to know those who are competent, and punish those who do bad jobs.

2. NHBRC Registration

The National Home Builders Registration Commission (NHBRC) is another regulatory organization in South Africa that keeps a database of registered builders. Some clients request to see evidence of registration with them as a prerequisite before giving out jobs.

3. MBSA Membership

Master Builders South Africa is a voluntary association. Because this association is all about high building standards, it pays to be associated with them.

How much does it Cost to Register a Construction Company in South Africa?

You need to pay the NHBRC application fee of R745. 61, as well as the Company Registration fee of R125. That amounts to 870.61. However, because there will be some driving around involved, please have a bigger budget. Of course, as soon as a business takes off you will still have to register with more professional bodies.

• All Types of Companies In South Africa
• How To Start A Cleaning Company In South Africa

Conclusion:

The construction industry is closely guarded in South Africa; this is because it is an industry that involves risk, both to those who work in it and also to those who use the end product. Therefore, you will be required to register with the professional bodies in charge of the industry. The process of registering is quite straightforward, although a good place to start could be a lawyer’s office so as to fast-track all procedures. Hopefully, you can quickly register, and then start to make your input into the South African housing industry.  

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Download a Free Business Plan Template

What is a business plan.

The written plan of goals you want to achieve with your business, and how you want to achieve them, is called a business plan. It is a decision-making tool used when beginning or extending a venture.

Any new business requires a business plan to ensure that the business can make a profit. Fund-seeking entrepreneurs use a formal business plan to convince investors to contribute towards the capital of the business.

Existing businesses – looking to expand or change the business – also use business plans to prospect for new business, attract key employees or deal with suppliers. By revising their business plan regularly, existing companies can devise strategies to manage their companies better.

Most commonly, a business plan is used to apply for a bank loan to fund a business. To learn how to create a business plan for a bank in South Africa, see FNB and Standard Bank’s business plan guidelines. You can also download Standard Bank’s free business plan template in Word or PDF format.

A business plan consists of three primary parts:

• The business concept – details about the industry, the structure of the business, the product or service and the strategy for the success of the business.
• The marketplace section – an analytical description of potential customers and the strategy for achieving success against competitors.
• The financial section – the income and cash flow statement, balance sheet and other financial information.

The length of a business plan varies depending on the nature of the business and the purpose of the business plan. Typically, a business plan is 15 to 20 pages long. It usually details the goals for the business for the next three to five years.

An important part of compiling a business plan is in-depth research into the market and industry. Try to gain as much insight into the market you are targeting by talking to business owners, suppliers, potential customers, existing customers, staff members, business experts, etc. Also, research the industry online.

Business plan format

Although there are several types, the key components of all business plans are essentially the same. The format varies based on who the intended reader of the business plan is. Here is an example of a standard business plan format:

1. Table of Contents (1 page)

The table of contents page should include the correct page numbers of the sections of the business plan. Therefore, it is best to write this page last. In addition to the table of contents page, the plan must also have a cover and a title page.

2.  Executive Summary (2 pages)

The purpose of the executive summary of a business plan is to entice the reader to read the rest of the plan. The executive summary is an overview of the key aspects of the plan. It should be compelling but also concise.

The executive summary should include:

• the business concept (a description of the business, product, market and target market);
• key financial aspects (sales, profits, cash flows, investment returns and capital requirements); and
• a short company overview (type of company, date formed, owners and key personnel and achievements).

3. Company Overview (1 – 2 pages)

This section is a high-level overview of the company and the industry in which it operates. It is a description of the business, the product and the industry.

The following should be included in the company overview:

• The name of the company and the type of ownership and registration;
• Details about the business location (address, zoning, reason for choosing location, monthly rentals, etc.)
• Significant assets and financial contributions to the business;
• The mission statement of the business;
• Company objectives and goals;
• The main features of the industry in which the business will operate;
• The most important company strengths and core competencies;
• An explanation of the product, target market and profitability of the plan.

4. The Opportunity, Industry and Market Description (2 – 3 pages)

The research you conducted will come into play in this section. This section offers a detailed explanation of the market and industry and the business’ position therein.

They key is to determine who your target market is through a market analysis. Then clearly explain how your products/services will fulfil the needs of your target market. A market analysis also helps to determine pricing, distribution strategies and growth potential within the industry.

Describe the following:

• The opportunity – the gap in the market;
• The industry – the forces affecting the industry (i.e. obstacles to entry, customers, suppliers, substitute products and competition); and
• The market – insights into the target market (i.e. size, growth and trends).

5. Strategy (1-2 pages)

Detail your positioning strategy and how the business will compete in the chosen market. In other words, what is unique about your product/service and how will the target market benefit from what you have to offer.

6. Business Model Explanation (1 page)

The business model depicts how the business will make money/profit. A business model covers the following aspects:

• Sources of revenue;
• Costs involved in generating the revenue;
• The profitability of the business (revenue minus costs);
• The investment required to get the business up and running; and
• Success factors and assumptions for making the profit model work.

7. Management and Organisation (2 pages)

The biographies of the members of your management team and their roles in the business. Who will be responsible for running the business and why are they well-suited to the task?

This section should include:

• The founders of the company and their qualifications and experience;
• The day-to-day management team and their individual competencies and responsibilities;
• The type of support staff needed to run the business; and
• An organisational chart to show the management hierarchy.

8. Marketing Plan (2 – 3 pages)

The marketing plan is a comprehensive explanation of your marketing strategy. In other words, how will you sell your service/product to your target market?

Your marketing plan should include:

• The value of your product/service to customers;
• A detailed description of the target market;
• How you want your target market to perceive your product/service;
• The pricing strategy for the product/service;
• Sales and distribution channels that will be used to get the product/service to the customer; and
• The promotion strategy (budget, public relations activities, promotions, advertising, etc.).

9. Operational Plan (2 pages)

The operational plan is a description of how the business will function. Include a description of the following:

• The operating cycle – how the business will deliver the service or create and sell the product;
• How skills and materials will be sourced;
• Which tasks will be outsourced and how business relationships will be managed; and
• The cash payment cycle of the business.

10. Financial Plan (3 – 5 pages)

A very important part of any business plan is the financial plan. It is a reasonable projection of the company’s financial future.

A good financial plan will determine how much capital the business needs to launch and/or grow. This section is especially important to potential investors and banks – who will determine the odds for the continued survival of the company based on this information.

A financial plan should include:

• Start-up expenses and capital: What it would cost to start/grow the company and how the money will be generated.
• Profit and loss projections/income statement : Financial sales and expenses projections (i.e. income, cost of goods, gross profit margin, net profit, total expenses, etc.).
• Cash flow projection: Reflects how much cash will be needed to cover expenses and when it will be needed. The cash flow projection amounts to a profit or loss at the end of each month or year.
• A balance sheet: A summary of the business’ equity, assets and liabilities.
• A break-even calculation

Income statements and cash flow projections must be generated for every month of the first year, every quarter of the second year and annually for every year thereafter. The balance sheet is only generated on an annual basis.

Short summaries of the analyses of the income statement, cash flow projection and balance sheet must also be included. Do not include too much detail in this section. Additional projections, charts and calculations must be added to the Appendix.

11. Appendix

Additional reference documents are included in the appendix. This could include:

• Brochures and advertising materials;
• Industry studies and market research;
• Plans and blueprints;
• Photos and maps of location;
• Magazine or other articles;
• Detailed lists of equipment owned or to be purchased;
• Copies of leases and contracts;
• Letters of support from future customers;
• List of assets available as collateral for a loan; and/or
• Detailed financial calculations and projections.

Find more business plan examples and templates from Entrepreneur Magazine .

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5 ways construction companies can increase sales – your full guide

What's Inside

5 keys tactics to increase sales

• Define & understand your target audience
• Put together an effective marketing strategy
• Optimize your customer onboarding experience
• Win them over with a kickass proposal
• Get the business finance you need

Business finance options for construction companies

• Invoice discounting
• Equipment finance

If you own a construction company in South Africa chances are you are looking for ways to grow your sales, especially during the quieter months. Whether it’s building dams, bridges, roads, skyscrapers or shopping centres, all construction companies have one thing in common – providing innovative construction solutions to their clients.  

If you're thinking about expanding your construction business, it's important to plan carefully. Whether you're just starting out or have been in the industry for a while, growing your business requires strategic thinking. You need to make sure you have the resources in place to handle the extra work (after using our sale strategy of course ;)) The last thing we want is for SMEs to feel like they are overstretched and struggling to meet customers’ demands.

Think about what industries you want to expand into. Do your research and make sure there's a potential customer base there. Then start putting together a plan for how you will acquire the resources you need to service those new areas. Once you have a solid plan in place, you can start executing it and growing your business at a sustainable pace. To guide you along the way, we’ve put together a step-by-step sales plan for you.  

5 key tactics that will increase sales for your construction company:

1. define & understand your target audience  .

This should be a pretty straightforward process if you have an existing customer base. Here you’ll need to map out past, repeat and potential clients. At first, it might need to be a manual process of creating a database of these customers. The next step will be categorising these clients and seeing which ones have the potential to be long-standing clients e.g. if you’ve received a once-off contract to build a bridge for a specific municipality, is there potential to put in a proposal for building roads/dams for that same municipality (if you have these expertise). Hubspot, Salesforce and Zoho CRM are some of the best CRM (customer relationship management) softwares available for SMEs in South Africa, and if you are looking to scale your construction company, you should prioritise setting aside budget for these tools. Using the CRM software, compile a database which further categorises your clients according to project type, location and potential for growth. Now that you’ve classified your clients a bit more, it’s time to actually understand your target audience. What are their needs? What are they looking for in a construction company? What things are important for them during the onboarding and project delivery process? Start off by creating a detailed profile of this audience, categorising their needs. Use the initial meeting to retrieve as much information as possible on the client. The idea here is not just to find potential clients, it’s actually to see if the relationship is the right fit, are you going to be able to deliver on their needs and are their construction deadlines realistic and achievable.  

2. Put together an effective marketing strategy  

If you have mainly relied on word-of-mouth to secure new business, there is no reason to fret, however, an effective marketing strategy can catapult your revenue growth even more. If you already consider your branding and marketing to be A-class for your industry, there is always room to improve. This could be as simple as putting together professional branding collateral so that when you send a potential client a proposal, it’s attractive, well-thought-out and on-brand. If marketing hasn’t been a focus at all for your construction company, then spend time outlining your brand identity, language and message – meaning how do you want your clients to perceive your brand? A brand style guide is a good starting point, this will include your logo, typography and colour scheme.  

If you don’t have the budget just yet to outsource your marketing efforts, then a simple website, Google business profile and LinkedIn profile setup are a must.  Once you have your LinkedIn profile set up, create a basic content calendar, and ensure you are posting content that appeals to and resonates with your target audience. When you do eventually have the budget, SEO (search engine optimisation – how your clients find you on Google), newsletters and Google Adwords – will need to be the next area of focus. If you don’t have the time or confidence to develop an in-depth marketing strategy, then outsource it to an agency that has experience working with construction companies.  

A big part of your marketing strategy should be a well-crafted elevator pitch, meaning how can you explain your value in under two minutes. Concor (formerly Murray & Roberts construction), has summed up its product offering and value as “Concor is a diversified infrastructure and services construction company, with core competencies in the infrastructure, building, mining and property development sectors.” With this statement, you know what they do, and how they do it and that can effectively get the job done.  

3. Optimize your customer onboarding process

If you’ve never put together a structured sales funnel, it’s best to spend time as a team mapping one out. The first part of your customer onboarding process is taking a step back and prequalifying leads. Yes, it can be very exciting to get a phone call from a potential client looking for a construction contractor, however you need to ensure it’s the right fit. Before going deep down the customer onboarding funnel, make sure they are a good customer. Time is money, and in the case of construction, wasting time is further delaying the construction project. Put together a set of questions that are unique to your company, here are 5 common questions contractors should ask their clients before starting a construction project:

• What are you looking for in a construction company?
• What is the project budget?  
• How involved would you like to be in the project?
• What would potential challenges be for the project?
• What is your expected timeline?  

The questions above can either be asked over phone or during the first formal meeting. The initial client-contractor meeting is a game changer when it comes to sealing the deal, so make sure you entice your potential client to set up this meeting. CRM software like Hubspot can make this process a whole lot easier, and more streamlined with automated emails and scheduling. Whether it’s a simple landing page on your website, with a link to ‘schedule a meeting’, or if it’s a well-written email outlining the meeting purpose and objectives. Once you’ve secured the meeting, make sure it’s all about fact-finding. So in addition to the questions above, you’ll need to find out how you can provide a well-executed construction solution for their “problem”. Use this meeting to find out more about how they award contracts/tenders, and what their look for in a supplier in terms of likes and dislikes. Use your CRM software to move qualified leads through your sales funnel.  

4. Win them over with a kickass proposal

Once you’ve found out as much as possible about your potential client and their needs, it’s time to sell your services and USPs (unique selling points). If you have a sales and marketing team, work closely with them to design this collateral, and start off with a proposal template using your company brand guide. The purpose of a proposal is to provide compelling solutions for your potential client. In some instances you might be given an RFP (request for proposal) by a public or private enterprise, so you need to make sure you are fully equipped with the required documents.  

A winning first-time proposal is detailed and specific, ensure your proposal covers the following sections:  

• A company profile – what your company does, your BEE status, insurance information
• An estimated overall cost, and criteria required for the project to be successful (be specific and thorough in this section e.g. include zoning fees, labour costs etc)
• An outlined schedule, approach and plan of action – this timeline will include benchmarks that need to be achieved by specific deadlines.  
• Testimonials from satisfied clients
• Agreement statement – either attach this to the proposal or have a link to a PDF that the client will be able to sign. This step is crucial as it ensures the projects can commence with a legally binding contract.  

Part of your proposal process, especially for first-time clients, is taking your potential clients to site visits (if possible). These clients want to be able to see your project style, and this might be the deciding factor in whether your construction team are a good fit or not. During your client-contractor meetings, you’ll be able to gauge how your customers like to be followed up with. Whether the meetings were online or in-person, send them a follow-up email a few days after the proposal has been sent. This email should have a strong call-to-action, either to set up another meeting to discuss the proposal further, or the agreement statement where the client can sign the dotted line.  

This step in the sales funnel is where a lot of construction companies lose focus, either because the potential client isn’t responding immediately or because the proposal wasn’t well-thought-out and didn’t entice the client enough. Don’t be disheartened, if the client is taking their time to respond to your proposal, it could be for a number of reasons, but persistence is key. Your sales funnel needs to be tracked effectively, including your follow-up process, this way you’ll be able to adjust your funnel accordingly.  

5. Get the business finance you need  

Whether you are a small business owner or own a large construction company, either way, there will likely come a time when you need extra cash to keep the cogs of your business turning. Construction companies in South Africa can often take financial dips where they aren’t winning as many tenders as they’d like to.  If you want to grow your business, you may need access to funds that will help you achieve your business goals. Whether you want to increase sales or expand your client portfolio, move into new offices, or hire more staff to ensure a new project is completed on time – a business loan can help you take the next level up.  

Business finance options for construction companies:  

Although there are a variety of business finance options available for construction companies in South Africa, these are the most common funding types.  

Invoice Discounting  

Invoice discounting is a form of short-term business finance that enables businesses to borrow money from a finance provider based on the value of their unpaid invoices (hence the term ‘invoice financing’).  

It works by companies selling their future income stream as an asset to the lender. This allows businesses to access funds quickly and easily if they often work with clients who have long payment terms.

Invoice discounting is perfect for construction companies that work with large corporates or government municipalities. These big companies often enforce long payment terms on their supplier contracts, which means cash can get locked up. This is the perfect use case for invoice factoring.

Equipment Finance  

If you need equipment to complete a new construction project, this financing type is designed to assist you. Equipment finance offers different options to purchase or acquire the right to use the equipment and generally uses the equipment as collateral.

The different types of equipment finance (also known as asset finance) differ mainly on how ownership transfers (if at all).  Sometimes the funder owns the equipment and you ‘rent’ or ‘lease’ it over a term.  At some stage you may have the ability to own it near the end of the term of the agreement; it all depends on the contractual terms.

Deciding between these options requires careful consideration of cash flow, as well as whether you actually want to own the asset, and importantly there are tax and VAT implications. If you are in a situation where you need digger loaders, forklifts, or cranes to complete a construction project, asset finance offers you the ideal solution to ensure you meet your deadlines and get paid for the end result.

And there we have it, all that’s left now is to put this game plan in action. If you are looking to increase your sales as a construction company in South Africa, all it takes is determination and focus (combined with our tactics of course). As the business leader of your company, make the time to strategize and come up with new and effective ways to thrive in your industry.  

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The big plan to turn South Africa into a construction site

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The Department of Public Works and Infrastructure has outlined some ambitious plans to boost development in South Africa.

President Cyril Ramaphosa and Public Works and Infrastructure Minister Dean Macpherson have said that they want to turn South Africa “into a construction site” in hopes of improving economic growth and revitalise

According to StatsSA’s Quarterly Labour Force Survey for Q1 2024, there are around 1.22 million people employed in the construction sector, which is around 7.25% of the country’s employment. “The industry is bleeding – it’s in dire straits,” said Mohau Mphomela, Executive Director of MBA North.According to StatsSA, the construction sector’s GDP contribution has dropped from 4% in 2016 to around 2.3% in 2023.

Ramaphosa said that the Government of National Unity wants to “turn our country into a construction site” through “pursuing a massive investment in infrastructure.” Additionally, said that they want to enhance the maintenance and utilisation of state-owned property assets, streamline bureaucratic processes to support the growth of small businesses and “eradicate corruption, criminal activity, and sabotage” within the construction sector to ultimately boost job creation and the economy.

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