construction company business plan south africa

The South African construction industry is expected to grow by 6.1% in real terms in 2021 - up from a contraction of 16.5% in 2020. The industry's output was severely affected by the outbreak of the Coronavirus (COVID-19) pandemic, with the country imposing a strict six-week lockdown in response to the outbreak. Reflecting the pandemic's impact on construction activities, the industry's value-add fell sharply by 21.6% year on year (YoY) in Q3 2020, which was preceded by a 33.3% contraction in Q2 2020, according to Statistics South Africa (Stats SA). The industry was also one of the hardest hits in terms of employment, losing 259,118 jobs at the end of Q3 2020, compared to that at the end of Q3 2019.

To help the economy recover from the crisis, in June 2020, the government announced a 10-year infrastructure investment plan worth ZAR2.3 trillion (US$124.7 billion), with investments planned in the housing, energy, agriculture, transport, water and sanitation and digital infrastructure sectors. Officials from the World Bank, African Development Bank (AfDB) and Development Bank of South Africa (DBSA) have pledged support for the infrastructure drive, which is expected to create over 1.8 million jobs over the next 10 years. In another positive development, in October 2020, the government rolled out an ambitious ZAR1.1 trillion (US$60 billion) Economic Reconstruction and Recovery Plan, which has four priority interventions: infrastructure investments; expansion of the energy generation capacity; job creation to support livelihoods; and industrial growth.

The industry is expected to register a marginal annual average growth of 0.2% between 2022-2025, with growth being restricted due to the government's focus on fiscal consolidation, owing to the deteriorating fiscal situation in the country. The government expects the country's public debt to rise from 63.3% of GDP in 2020 to 81.8% by 2021, and further increase to 93.5% by 2026. In October 2020, the treasury said that it aims to achieve a primary surplus by FY2025/2026, through cutting expenditures by nearly ZAR300 billion (US$16.3 billion) over the next three years; this will be done mainly through public wage cuts. Reflecting the effect of the COVID-19 pandemic on the construction industry, the total value of plans passed for building construction fell by 36.6% YoY in the first eleven months of 2020; this was preceded by annual declines of 11.8% and 1.1% in 2019 and 2018, respectively.

This report provides detailed market analysis, information, and insights into the South African construction industry, including -

The South African construction industry's growth prospects by market, project type and construction activity
Critical insight into the impact of industry trends and issues, as well as an analysis of key risks and opportunities in the South African construction industry
Analysis of the mega-project pipeline, focusing on development stages and participants, in addition to listings of major projects in the pipeline.

This report provides a comprehensive analysis of the construction industry in South Africa. It provides -

Historical (2016-2020) and forecast (2021-2025) valuations of the construction industry in South Africa, featuring details of key growth drivers.
Segmentation by sector (commercial, industrial, infrastructure, energy and utilities, institutional and residential) and by sub-sector
Analysis of the mega-project pipeline, including breakdowns by development stage across all sectors, and projected spending on projects in the existing pipeline.

Key Topics Covered:

1 Executive Summary

2 Construction Industry: At-a-Glance

3.1 Economic Performance

3.2 Political Environment and Policy

3.3 Demographics

3.4 COVID-19 Status

4 Construction Outlook

4.1 All Construction

4.2 Commercial Construction

4.3 Industrial Construction

4.4 Infrastructure Construction

4.5 Energy and Utilities Construction

4.6 Institutional Construction

4.7 Residential Construction

5 Key Industry Participants

5.1 Contractors

5.2 Consultants

6 Construction Market Data

For more information about this report visit https://www.researchandmarkets.com/r/4o5s45

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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 .

How to Start a Construction Company

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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Top construction companies in South Africa

Region/country.

Concor has delivered infrastructure projects across the South African landscape, including iconic projects such as the Bloukrans Bridge in the Eastern Cape, Huguenot Tunnel and Hugo’s River Viaduct in the Western Cape, Reservoir for the Ingula Power Station in Kwa-Zulu Natal, and the Carlton Centre, ABSA Towers, Melrose Arch, the Gautrain and Menlyn Shopping Centre in Gauteng.

3. WBHO Construction (Pty) Ltd

The company’s history dates back to 1970 when Wilson-Holmes (Pty) Ltd was formed by John Wilson and Brian Holmes. A number of mergers followed resulting in the name being changed to Wilson Bayly Holmes (Pty) Limited in 1983 and finally to WBHO Construction in 1994.

4. Group five

Headquartered in South Africa, Group Five is much focused on sub-Saharan Africa. Their main work is in the infrastructure, resources, energy, and real estate sectors.

Some of the projects the company has taken part in include; Akasia Road Surfacing, Aliwal Dolorite Quarry, B&E International, Canyon Rock Quarries, Conspec, Milling Techniks, National Asphalt, Queens town Quarry, Space Construction, SPH Kundalila, ThabaBosiu Construction, and Zamori Construction.

6. CSV Construction

The multidisciplinary construction company has over 12000 employees with a broad spectrum of expertise means that it has the capability and capacity to offer a single point responsibility on infrastructure development projects, effectively removing the interface risk from the client’s domain.

8. Motheo Construction

9. wk construction.

WK Construction is one of the largest independent construction and engineering companies in southern Africa, with more than forty years of experience with a proven record in quality project delivery of pipeline construction, trenchless technology construction, township roads, and infrastructure development, general roads and earthworks, concrete structures, crushing and screening operations.

10. Lubbe Construction

Lubbe Construction prides itself in unsurpassed workmanship and our great contribution to infrastructure development in South Africa, from the construction of low-cost housing to affordable housing, turn-key development projects, and civil construction. The company targets to meet customer expectations and is proactive in finding the best solutions for clients that will meet the desired results.

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Your guide on how to start a construction company in south africa.

In this post, we’ll show you how to do a Construction Company registration in South Africa. We’ll show you exactly what documents you need to firstly register a Construction Company, and secondly, to comply with all the South African Tender en Contract requirements. We’ll also show you where to get all the documents you need and what the fastest way of doing so would be.

This post is for you if you want to start a Construction Company or if you’re thinking about getting more jobs for your existing building business. We know that knowing what documentation you need to start your business and win Tenders and Contracts in South Africa can be really confusing. That’s why we’re laying out all the vital documentation you need in this post. No matter how far you are in the process to a Construction Company registration in South Africa, this post should help you to get everything you still need.

Compliance documentation for Construction Companies can essentially be divided into two sections:

You first need to sort out your general Company compliance like Pty Registration (or whatever other company structure you prefer), SARS registration and Employer registering so you can legally trade and employ staff.

Next, you can move on to the Construction-specific Compliance for companies who are interested in applying for Tenders and Contracts – both private and governmental.

Breaking down compliance into two sections makes it easier to understand what you need to start a Construction Company in South Africa and why you need it.

The vital documentation you need to get your South African Construction Company Compliant:

Simply scroll down to the section you’re interested in.

Please note that this summarizes the most vital Company Documentation most Construction Companies in South Africa needs; it’s by no means a fixed list. We’re just summarizing the documents most South African Construction Company’s need firstly to trade legally and secondly to be eligible to win bigger Tenders and Contracts.

Expert Tip : Save time by calling our Toll-Free number below to get your Construction Company Registration now.

Section 1: General Construction Company Compliance

Here are the first five most important documents you should get in order to ensure your South African construction business is complaint with regulations

1. Company Registration

Why do i have to register my business as a company.

If you’re starting a new company or if you have an existing business that you’d like to take to a new level, it’s time to decide whether you’d like to officially register your business to make sure you, as the owner, is safe.

What I mean by safe is the following: if you have a business, but you haven’t registered it specifically as a Pty Company, for example, you have to submit your tax to SARS alongside your personal tax. This implies that your earnings and your debt are linked to your business and vice versa. If your company gets into financial trouble, you get into financial trouble, because you’re still considered one entity.

If you register a company, the new company will become a separate legal entity from yourself (your personal capacity). In most cases you will be protected should your company gets in financial trouble.

There are various Company Structures (each with their own set of legal, taxation rules and asset and debt liability), however, the most common structure is a Pty Company.

How do I register my Construction business in South Africa?

All companies have to be registered at the CIPC – regardless of what industry you’re in.

You can use the CIPC’s online portal (https://eservices.cipc.co.za/). It might be easier to ask your accountant if you have one. They can assist you too.

However, the fastest and simplest way to do it is by calling our Toll-Free number 0800 007 269 . We have over 50 Company Registration experts who will help you register your company at the CIPC usually within 1 working day (please verify with your consultant).

Expert Tip: Call 0800 007 269 (Toll-Free) and have one of our Company Registration experts help you get your Construction Company registration at the CIPC in record-time and with minimal effort from your side.

Expert Tip 2: Here’s a company registration guide we created (with step-by-step instructions): https://ptycompanyregistration.co.za/company-registration-guide/

2. Employer Tax Registration

Why do i have to register as an employer at the sars office.

Almost every South African has to pay tax according to their income unless they earn very little – then SARS will dub them exempt. This means that every employee has to be registered at SARS; SARS will determine whether they are exempt.

That means as an Employer, you have to register the salaries you pay in order for SARS to determine the Tax of your employees. You, as the employer, will withhold whatever they owe SARS and pay it directly to SARS. This is called Pay as you Earn (PAYE).

Whatever tax deductibles your employees have they will communicate to you to subtract from their payments due to SARS or they can simply claim it back directly from SARS. Most employers prefer not handling these deductibles when they calculate what Tax to withhold relating to their employees’ salaries, however either way will suffice.

The most important thing to remember is that you HAVE to register yourself as an employer stating all your employees.

What is SDL and UIF and why do I have to register for it?

When you register, SARS might also ask you to register for something called the Unemployment Insurance Fund (the UIF) and perhaps even the Skills Level Development (SDL).

Whether you have to contribute to the SDL is determined by various factors (like for instance whether you expect your total salary expense to be more than R500 000 over the next 12 months). This is simply a fund that allows your employees to pursue further training. However, you will most likely have to register for the UIF unless your employee works for you for less than 24 hours a month.

The UIF means you’ll be contributing an extremely small amount, every month, as a form of insurance that safeguards your employees against losing their jobs. If they do lose their jobs this fund allows for temporary financial relief.

How do I register as an Employer at the SARS office?

You have to register yourself as an employer at SARS.

You can also refer to this SARS page > https://www.sars.gov.za/types-of-tax/pay-as-you-earn/

You need to register for UIF at the UIF office.

Expert tip: the easiest way to register both at SARS and the UIF as an employer is calling our Toll-Free number 0800 007 269 . Here a SARS and UIF expert will assist you with step-by-step assistance.

Section 2: Tender and Construction-specific Compliance

1. COID Registration and Letter of Good Standing

What is a letter of good standing and how can i get one.

If you want to apply for Tenders and Contracts, you will most likely have to submit a Letter of Good Standing . The only way to get a Letter of Good Standing is making sure you are “in good standing” with COID, also known as the Workman’s Compensation Fund.

The only way to be in good standing and have no debt with the Workman’s Compensation Fund is ensuring you are firstly registered at the Fund and secondly, up-to-date with all your due payments.

If you’re not sure what the Workman’s Compensation Fund is, I’ll briefly describe it and also why you have to contribute to the fund (the contribution is really a tiny, insignificant amount determined as a small percentage of your employee’s salary).

The Workman’s Compensation is a form of insurance provided to employees, or their dependents, in the case of any work-related diseases, injuries or deaths.

That means, you as the employer, offers a tiny contribution on an annual basis, and the Fund will compensate your employee if they are ever harmed at work. They will even compensate the dependents of your employee if they die or if they are permanently impaired.

In short, the Fund safeguards you from massive medical bills and compensation and it also ensures your employees get financial aid if they are harmed at work.

Please note this really is an oversimplification and the Commissioner of the Fund first has to approve a claim and determines how big or small the compensation will be based on your employee’s incident and his or her income prior to the incident.

Expert tip: Click here to get assistance directly from our COID and Workman’s Compensation Fund Experts > https://ptycompanyregistration.co.za/compensation-fund/

2. VAT Registration

Do i have to register for vat.

The most important thing to note about VAT Registration is that it’s mandatory if your company has a turnover or sale-total of more than R1 million in 12 months.

Before that, it’s voluntary. There’s also a minimum cut-off for voluntary registration, so if you have a completely new business, you might not be eligible for voluntary registration. If you’re thinking about registering for VAT, the most significant advantage is the fact that other VAT-registered companies (who are usually big companies) are more inclined to work with you.

Where do I register for VAT?

You have to register for VAT (you can read more about that right here > https://www.sars.gov.za/types-of-tax/value-added-tax/ ) at SARS, however, our SARS experts can assist you from the comfort of your home.

The easiest way to register for VAT is to simply call us Toll Free on 0800 007 269 (free to dial from Cellphones and Landlines).

3. B-BBEE Affidavit or BEE Certificate

Do i need a b-bbee affidavit or a bee certificate.

Does your business have an annual turnover (sales) of more than R10 million? According to South African law, that means you do need an official B-BBEE Certificate.

If you’re like the majority of South African businesses your annual turnover is under R10 million. That means you just need a BEE Affidavit.

A BEE Affidavit is simply a form that states your simplified level of B-BBEE (you can find a form on SARS site). All you have to do is fill out that form and have it signed by a Commissioner of Oath, and it will be valid for 1 year.

Where do I get a B-BBEE Affidavit or a B-BBEE Certificate?

You can also find out more about where to get an official B-BBEE from the CIPC right here: https://www.cipc.co.za/?page_id=3612

Expert tip: We can provide you with an electronic BEE Affidavit . It’s completely free of charge and included in all our services. Just call us Toll Free on 0800 007 269 (free to dial from Cellphones and Landlines) or click HERE .

4. CIDB (Construction Industry Development Board)

Do i have to register at the cidb (construction industry development board).

The short answer is yes. To register with the Construction Industry Development Board (CIDB) is a must if you want function as a Construction Company in South Africa, and apply for Construction Tenders and Contracts. South African law (Act 38 of 2000) says so.

There are only two reasons why skipping CIDB registration would be an option. The first is if you’re just building on your own home and you have no interest in applying for Tenders or work in the public construction sector.

The second is if you’re only interested in providing specific services or supplies to other Construction companies, who actually do the hard work. An example is providing the bricks or the human resources for a Construction Company and only doing that.

CIDB makes sure all Construction Companies in South Africa adhere to a specific national standard and a specific Code of Conduct. Without it, any unqualified builder could erect unsafe structures in any way possible.

Where can I register my construction company at the CIDB?

Here’s a helpful link to a CIDB application form: https://www.westerncape.gov.za/Text/2005/1/formcrs_p1.pdf

Expert tip: Rather than filling out that form by yourself, you can just give us a call for step-by-step instructions to ensure your CIDB registration is accepted and processed as soon as possible. Call us Toll Free on 0800 007 269 during office hours (free to dial from Cellphones and Landlines).

5. NHBRC Registration

Do i have to register my construction company at the nhbrc.

You don’t have to register your construction company at the NHBRC (National Home Builders Registration Commission). However, it’s strongly advised that you do.

This organization serves as a large trusted database of registered construction companies. That means clients and Companies use this site actively to find good Construction Companies in South Africa.

Another undeniable reason to Register at NHBRC is the fact that it’s almost always required for Construction Contracts and Tenders and even building loan applications.

Where can I register for the NHBRC?

Have a look at this helpful link: https://ptycompanyregistration.co.za/nhbrc-registration/ or connect with one of our various experts right here: https://ptycompanyregistration.co.za/book-free-consultation-session-now/

6. MBSA Membership

Is it good to register at the mbsa as a south african construction company.

The MBSA (Master Builders South Africa) is a voluntary organization just like the NHBRC. As with the NHBRC, it’s a good idea to register – even if it is voluntary.

MBSA Registration isn’t as often a prerequisite for Construction Tenders and Contracts, but it still serves its value as being a credible associate of trusted Construction Companies.

With business being tight across South Africa, making sure you’re perceived as a trustworthy Construction Company will always serve you well.

You can find out more about the MBSA right here: https://www.masterbuilders.org.za/building-contractor/membership-benefits

7. Construction Business Plan

For the South African Construction Industry you’ll need a very Comprehensive Business Plan to get tenders / contracts / finance. Our Construction Business Plan includes everything you need: an in-depth Industry Analysis, Competitor Analysis, Customer Segment Research and Macro Environment Research. All of which are put together by our Specialist in Construction Business Plans. Click here to get your Construction Business Plan now .

For more information on services that are linked to Construction Company Registration see below.

About the page author

Liam Stander completed his Bachelors Degree at Stellenbosch University. Started first company at the age of 19. Co-Founded Company Partners.

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Construction Business Plan

Using this sample business plan will ensure that you know how to go about starting a construction business..

Executive Summary

Introduction 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.

The Company Houston based Fosse Commercial Contractors, LLC began in 1985 when Mr. Robert Fosse began his own company, Fosse Painting and General Construction.

In 1993 the original company was merged with another small scale local company, West General Contractors and the company began to bid successfully for larger scale projects.

As part of its growth and altered focus, FCC is planning on changing its charter from a limited liability company to a class C corporation registered in Texas. This will allow FCC greater access to investment funds to fuel its growth.

Services Fosse offers comprehensive services designed allow the company to do whatever it takes to finish a project.

Some of these services include; design work, remodeling and alterations, permitting, site preparation, carpentry, cement foundations, painting, and plumbing and utilities installation.

In addition, skills Fosse lacks can be subcontracted.

The Market The Houston area is booming at this moment, overall business growth during the past seven years has averaged approximately 9.5% 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.

1.1 Objectives

Fosse Commercial Contractors plans to:

1.2 Mission

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.

1.3 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.

Company Summary

Fosse Commercial Contractors, LLC began in 1985 when Mr. Robert Fosse began his own company, Fosse Painting and General Construction in the Houston area. In 1993 the original company was merged with another small-scale local company, West General Contractors, and the company began to bid successfully for larger scale projects.

In 2002 the company’s management came to the conclusion that the firm had grown sufficiently to alter its primary target market segment 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 Year 1. As part of its growth and altered focus, FCC is planning on changing its charter from a limited liability company to a class C corporation registered in Texas, allowing greater access to investment funds to fuel its growth.

2.1 Company History

Fosse Commercial Contractors, LLC began in the Houston area in 1985 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.

In 1993 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.

In 2002 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.

2.2 Company Ownership

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 in 2004. This will create greater investment opportunities through the acquisition of investment capital from a limited number of shareholders.

Fosse offers a comprehensive package of services designed to allow the client to work with one of our managers and create a project the company can carry forward to completion. Some of the myriad services Fosse offers are:

Market Analysis Summary

The Houston area is booming at this moment, overall business growth over the past seven years has averaged approximately 9.5% and is expected to continue for at least the next four years. This constitutes an attractive market for Fosse Commercial Contractors.

This is the fastest growing segment of all the commercial clients requiring our services. The other categories we will serve include the restaurant and special facilities segments, along with a segment we will call the general category, to serve all other potential commercial clients.

4.1 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.

4.2 Target Market Segment Strategy

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.

4.3 Service Business Analysis

The Houston area is booming at this moment, with overall business growth for the past seven years averaging approximately 9.5%. This growth level is expected to continue for at least the next four years. One of the prime reasons for this growth is the creation of the North American Free Trade Agreement (NAFTA), that removed trade boundaries throughout our continent.

Texas is ideally situated to take advantage of these new conditions and is experiencing a boom to prove it. This makes for a very attractive market for Fosse Commercial Contractors.

The commercial construction industry is highly fragmented across the nation. More than 86% of all construction companies in the U.S. consist of small “mom and pop” style companies employing less than ten individuals.

Contrasted to this are the large companies that engage in “heavy” construction such as roads, shopping malls, etc. who often have a nationwide scope and employ several thousands of workers.

This creates a highly competitive market with low profit margins. Companies wanting to create a defensible position in this market need some form of competitive edge, such as brand name, low cost advantages, or size.

4.3.1 Competition and Buying Patterns

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.

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