How much do construction company owners make? In the modern world, most people do not even think about how to make repairs themselves or build a house. Therefore, they seek help from construction companies that provide a full range of work on a contractual basis.
How much does a construction company earn?
Since most minor works do not require building permits, almost every entrepreneur registered as an individual or legal entity can engage in this activity. For experienced construction workers, this is a great way to earn money, but it’s difficult to unequivocally answer the question of what specific amount a company earns, since it depends on many factors.
How to start your own business and what costs will the company bear?
To start a business in the construction business you need to get the necessary experience in this field. To do this, studying at a vocational school or university is not enough, since practical knowledge is needed.
Therefore, initially you will have to get a job in other teams and notice all the actions of the team leader: from his leadership skills, to making responsible decisions in a given situation and make adjustments for himself.
During the training period, one must begin to search for an investor, work out a clear plan of action, and also select clients for himself, being hired to carry out construction work.
At the second stage, a construction company should be organized. This will require financial resources for opening an office, hiring senior employees, an economist.
It is also necessary to think over the issue of the fact that at first the ongoing work does not require a license.
Please note that at Smeta-spb, specialists are ready to undertake the preparation of any estimates at the best prices, because any construction company and its income are tightly connected with estimated activities, all details are on the website http://smeta-spb.com.
This is due to the fact that, firstly, it is expensive, and secondly, you need qualified personnel who will have to pay high salaries. At the start of a business, this is unlikely to be possible, since there are no regular customers and stable profits. It is also necessary to register a company for legal activities.
The third stage is the creation of advertising. It should be noted that currently the most effective advertising is television and on the Internet, because the fast pace of life does not allow you to buy and read print media. Of the two options, for starters, the creation of a company’s business card site, which will require the involvement of specialists, or create it yourself, is suitable.
Therefore, it is necessary to buy a program for creating Artisteer construction sites, which will help to create your own page in the shortest possible time and publish it on the Internet.
Then you need to make the site popular for the region in which the company provides its services.
It is advisable to make a fully functional version of the site so that visitors can get acquainted with the services provided, view photos of the results of the construction work of the team, as well as calculate the cost of services.
When the company will receive monthly stable income, it should increase momentum by providing additional discounts or free bonuses, such as installing windows when ordering a certain amount.
During the established work, the company will bear the costs of maintenance and depreciation of special equipment, consumables, taxes to the state, and advertising. As you can see, the list is pretty solid. Therefore, you will need the services of an experienced accountant who can tell you how to save on taxes, hide / transfer part of the profit, etc., as well as calculate the effectiveness of doing business.
For work, construction workers will have to pay a piece-rate salary or a stable one with a certain percentage of transactions. The first option is ideal at the start, and then you should switch to a constant level of salaries, since significant profits will go, and the goal of creating a company is to earn money. Typically, about 70% of workers’s income is paid, and the rest goes to the firm’s account and general expenses.
What determines the level of profit?
The level of profit depends on the number of commissioned objects for a certain period. Therefore, everything must be done to increase the number of customers and not to lose the quality of the services provided.
At the stage of promoting the company, all the work must be done efficiently and on time, not take a large percentage, and do not waste the profits, and then invest in the company to improve customer service, open branches in different parts of the city.
The cost of work should be calculated carefully and correctly so that customers are satisfied and recommend this company to their friends.
It is better to do several orders a day, not 30-40% more expensive than the cost of building materials, than to sit and wait until there is a rich person who can pay 100% or more for services.
Lower cost will also reduce the number of competitors.
It should be noted that over time, workers may lose interest in work, want higher salaries, but do not turn to this question to their superiors, but start to overstate the cost of work, or engage in theft.
Therefore, the work of the teams should be carefully monitored and the company rating not allowed to be lowered, and a system of rewards and bonuses developed. Income depends largely on the degree of organization of workers and the degree of coordination of work. The absence of downtime allows you to take objects ahead of schedule, which also positively affects earnings.
When placing orders, you should go towards the customer and make small discounts, especially when there is not enough small amount to pay: he will have money, and he will contact your company again.
How to calculate the income of a construction company?
To calculate the income of a particular company providing construction services, you must perform the following steps:
- The profit from the delivery of the object to the customer is determined. For this, value added tax and the actual price of building materials are deducted from the contract value.
- After that, gross profit is calculated by subtracting the revenue from the services rendered and their cost for a certain period.
- The book profit is calculated, which includes the profit from the sale of property, products and auxiliary production, and services, net of other income and expenses.
- Net profit is the amount of money left after paying all taxes.
- Depending on the turnover and size of the company, net profit can range from tens to hundreds of thousands of rubles a month or more.
With the right and responsible approach to work, construction companies can earn significant amounts of money. To do this, you only need to create and organize a work team that will have an interest in the development of the company.
How much does a construction company earn?
“Business Magazine” continues under the heading “We remove the cash desk!” to count the proceeds and paint the working days of the capital’s small entrepreneurs.
This time, in the light of the searchlights of the editorial office, there was a small construction company engaged in the repair of residential and non-residential premises.
For the convenience of the reader, the process of “cash-desk-taking” is described in the form of a play with the appropriate eyeballs, development of action, climax and denouement.
The owner is a solid man of forty years old, a design engineer by training, who opened a construction company a year ago. The first worker, The second worker – expat experts. The calculator is a shameless descendant of an arithmometer, always getting into a conversation and meticulously capturing the income and expenses of others.
“Business Magazine” is a curious visitor to the owner.
Researched object: construction company
Specialization: repair of residential and non-residential premises; lower and middle price segments. Personnel: owner – CEO; assistant; secretary in the office. Office – 16 sq. m. Rent – 21,000 rubles per month. Scope of work: delivery of 3-4 objects per month. Annual turnover: about 7 million rubles.
Owner’s monthly income: 60–90 thousand rubles.
Act One and Only
Three-room apartment in which work is in full swing. The “Business Magazine” and the Calculator hesitantly stomp in the doorway. Owner. Come in, don’t hang on. We are finishing here.
In the next room there is a loud bang. From there, the First Worker runs out with a scream, with his head densely covered with foam.
Owner. What happened? The second worker (running after). Hakim spray can with mounting foam took – the foam is not shel. Hakim spray gun picking a screwdriver: bang! Foam went, went – came to his mind a lot! Owner. Rags and solvent, fast! (He begins to wipe the face of the First Worker.) “Business Journal.”
Yeah, you are somehow traumatic. Owner. It’s just that behind all the eyes and the eye is needed. The first worker moos something inarticulate through the foam. Owner. In fact, this whole construction is not a business, but a flea of discontented people. Customers are always dissatisfied with the company and workers, workers with the company and customers.
Sometimes I want to howl both from those and from others. “Business magazine.” Why don’t you give up? Owner. You get used to it gradually. (Wielding rags.) For a client, repair is stress that he orders for himself for his own money. For us it’s a normal production process.
(To the first worker) Well, can you breathe? Do eyes open? Get out of here – go on yourself! The first worker leaves, shaking his head in dismay. Owner. In this business, how? If you manage to minimize stress for a client, it’s already good. He is unlikely to praise you, even if you get too hard, but to recommend friends – yes.
To be honest, I went into this business a year ago not just like that, but with an idea …
Calculator. That is, not only to cut money?
Owner. I, in fact, a defector on the other side of the barricades. A year and a half ago started a repair at home. Found a decent-looking foreman; he, as usual, caught up with Moldavians: “They will work with living,” he reassured, “so they will quickly do it!” The Moldovans came together, broke everything, developed violent activity. And I, pleased, went on a business trip for two months.
I thought upon returning work to accept – but it was not there. I now understand that the Moldovans looked at my apartment as a place of residence, so they were in no hurry with the deadlines. During the day, other apartments were repaired, and in the evenings – optionally – they were tinkering in mine. I arrived, the foreman with the Moldavian brigade drove from the yard.
And over the next two months he drove out two more foremen with their brigades: they either swell, or they do it. Solid koekaker! Calculator. Who are they? Owner. Those who work and build their business somehow. I had to become a foreman myself. And nothing happened, for a month finished the repair in the best possible way. But the situation itself infuriated me.
Look: there is a huge market, customers are willing to pay a lot of money, and even pay extra – if only they have no headache. And normal contractors cannot be found during the day with fire. However, customers are also good. One recently boasted to me that he had done repairs for himself for free – he only spent on materials.
He came to Yaroslavka outside the Moscow Ring Road, where a spontaneous construction labor exchange was formed, recruited people for work, and a week later drove out without payment and came for new ones. I can imagine that such “disposable” workers set him up! After all, hard workers are not sewn with bast, they can also spoil a harmful owner.
For example, put a rotten egg under a suspended ceiling: it will not appear immediately, but it smelly smelly! “Business magazine.” Right “Our Russia” … Owner. I’m leading to the fact that even the co -akers in this chaotic market earn good money. And if you do everything according to your mind, you can get rich! In general, I quit my office and decided to build my own right business here.
“Business magazine.” Far advanced? Owner. Frankly, not so far. I’m only now gradually starting to change the status. Who have I been all year? In fact, the foreman of the “wild” construction crews. I got the wit, the word of mouth made me work, got a steady stream of customers. On this basis, you can already do a normal company.
Two months ago, he rented a small office, put the secretary, began to advertise on the Internet and the regional newspaper. It immediately became easier with orders, because clients have more confidence in a “settled” company.
“Business magazine.” And what about the building license?
Repair market in numbers
- 34% of the capital market of apartment repair services is controlled by legal participants – construction companies; 66% are private construction workers and spontaneous brigades. • 5 thousand – so many legal construction companies work in the Moscow market. • 15–20% was the growth of the repair services market in 2007. • Over 60 thousand new unfinished apartments were built last year; the number of apartments being repaired on the secondary is not accountable. • Price segmentation of the market of repair and finishing services (dollars per sq. M): lower segment (up to 150), mid-price (150–250), high-price (250–1000), elite (from 1000).
- On average, Muscovites spend $ 10,000 on apartment repairs.
According to Step by Step, IRN and market participants
Owner. With licenses, it’s generally not clear what’s going on. When I got into this business, I went through lawyers with the question: do I need a building license or not? Lawyers say: needed. A serious license is “for the construction of buildings and structures with a second level of responsibility in accordance with the state standard”.
The Federal Agency for Construction and Housing and Public Utilities issues such. I tell lawyers: where does the construction of structures? Well, I’m just going to plaster, paint, screed floors to do, lay the laminate, change the plumbing and all that. And they poke a classifier in my face, where in black and white: “finishing work” and “device of internal engineering systems.”
Excuse me to pay 100 thousand rubles for the licensing services for these construction works, and everything will be in the best possible way! In our country, it turns out, even the installer of steel doors must have a license to carry out the construction of buildings! Although then there was one lawyer who reassured me: they say, if you are not working with new buildings, but you are not involved in “secondary buildings”, you can also do redevelopment without license. And I wholeheartedly believed him right away and decided to work without a license. In addition, the trick is that building licenses seem to have been canceled several years ago, but the licensing regime has only since been doing that to extend it. If it is not renewed again, then from the new year licenses will not be needed. It was then that I completely “legalized” – and even become white and white in accounting. Calculator. Let’s count your proceeds! Owner. Look per month we rent out 3-4 objects. Basically, this is a cosmetic renovation of apartments, that is, two and a half months of work at each object. Recently, we have been constantly working 7-8 apartments in our work, which makes us feel good. Last month, revenue was approximately 620 thousand rubles. This is only for work, materials do not count. About 70% of this goes to hard workers, the rest goes to the company. Calculator (animated). It turns out 186 thousand rubles! Owner. There are relatively few other expenses. Office rental, advertising, salary of a secretary, assistant, visiting accountant. (Estimates.) Something about a hundred thousand runs over. Calculator. In total, you personally get 86 thousand rubles a month! Owner. Well, that is for now. The apartment renovation season is already over, then it will be worse. Now I am actively switching to repairing small offices in order to stay afloat. “Business magazine.” The repair market, it must be understood, is almost bottomless. Owner. Yes, there is only one limitation. One person is not able to fully control repairs at more than four sites, which I understood from my own experience. My assistant and I have enough for eight objects. “Business magazine.” It turns out that there is nowhere to grow especially in volume? Owner. And here I have a plan. It is necessary to bring stability to the surrounding chaos. After all, this is the essence of business, right? I understood that it was necessary to collect bit by bit from the market sensible non-drinking masters with golden hands and put them on a paycheck. If they put two and a half thousand dollars a month plus some bonus to them, they’ll go as cute – for the same stability. And I’ll upload them with work. Intelligent people and easier to control. This is the only way to build a brand and repair the co-hackers. And the rabbis and jamshuds, who are capable of killing themselves with a spray can of foam, will also work – but only in auxiliary works.
How to open from scratch, examples and a ready-made plan with calculations for beginners
They decided to open their own business, but can’t decide what exactly you want to do? At the same time, is the business simply obligated to be profitable? Then pay attention to the scope of construction services. A business in construction will certainly meet all the requirements for its own business.
- Where to start the opening of a construction company?
- What will the money investments be used for?
- Recruiting staff for a construction company
- Finding clients for a construction company
In addition, he pays off pretty quickly, returning all the money invested at the initial stage, and then begins to bring a steady income. How to open a business? What is required for this? We’ll talk about this.
Where to start the opening of a construction company?
First of all, it is necessary to register a construction company in accordance with the laws. To do this, you need to contact the tax authority, where the company will be registered. You will also be required to choose the legal form of the future company. This can be either an IP or an LLC.
The choice depends on the size of the business, that is, what type of construction (small or large) will be a priority.
Next, you should buy a seal and forms that are required to be notarized, pay a state duty, and only after that you can open a bank account and transfer the amount of the authorized capital.
The next stage of the organization that characterizes the construction company is the entry into the self-regulatory organization of construction workers. In short – SRO. For entry you need to collect a standard package of documents.
This is a complete portfolio of constituent documents, a statement and if there are any building certificates, then they are also attached. On average, it takes a month to review an application.
If the company for some reason could not become a member of the SRO, then it will be allowed to carry out cosmetic repairs or painting and decorating.
After joining the SRO, the company is obliged to pay certain amounts to a special compensation contribution. It is from these funds that insurance payments will be made if something goes wrong during the construction work. Additionally, there are many additional payments, and the amount depends on the region where the company is registered.
What will the money investments be used for?
If we talk about consumables, then this:
- acquisition of all construction tools;
- purchase of construction equipment;
- payment for advertising services, transportation costs, payment of taxes;
- payment of rent for the office.
You can reduce these costs by refusing to buy equipment. It can also be rented. As a rule, the payback of the entire project is 1 year.
Quite large amounts go to PR companies. A good solution is to create an Internet resource where you can lay out a complete list of services provided by the company. This is an important advertising stage in the process of establishing a business.
Recruiting staff for a construction company
If we talk about how to open your own construction company, which brings real income even at the initial stage, then you need to take care of the company’s staff. Employees should be highly qualified and, ideally, already have experience in the construction business. It is a good team that creates the reputation of the company, providing high productivity and profitability.
The list of personnel depends on the direction of the company, but usually it:
- procurement manager;
- personnel officer;
- team leader;
When forming a team of workers, it must be remembered that in order to obtain the necessary licenses, half of the workers must have the appropriate education.
Finding clients for a construction company
How to make money on construction? This is impossible without creating a group of regular customers, and an influx of new ones . Successful implementation of the task will help expand the company’s capabilities and rise to the next level.
How much do company owner earn in construction
How much they earn in construction, this article will be useful to those who decide to become a construction worker. Let’s do a survey, tell us about your region how much they earn on construction sites, what average salaries you have, write in the comments. I’ll tell you about my experience, how much and where I managed to earn in construction.
My work in construction
My whole work biography is related to construction. He began to work as a carpenter, plasterer, roofer, concrete worker. Before the army he entered the institute as a civil engineer in the correspondence department, as I acted, you can read here. After serving in the army he continued his studies.
For six years I worked and studied, after receiving a diploma, I did not immediately become an engineering and technical worker.
He worked as a worker, team leader in a small organization specializing in polymer coatings. He worked for a salary, it would be more correct to name the article, what salaries the construction workers have, and not how much the construction workers earn.
Most construction workers are looking for a paid job, I was no exception. The geography of my work in construction is Gubkin Belgorod region, Moscow, Balakova, Saratov region, Tobolsk, Tula, Samara. In Gubkin and Balakovo I got a job in local construction organizations, I wanted to work locally and not go on business trips, but I didn’t arrange small salaries.
How much do construction workers make, my earnings
Salaries are different, but in the regions this difference is not very large. This spring, I looked for work as a foreman in Balakovo, phoned all local construction organizations. He got a job in a company where they promised a much higher salary than in others.
What I could not understand when I was looking for work in Balakovo, why the salary level is the same, as if the leaders agreed among themselves.
At the interviews they promised a paycheck from 15,000 to 20,000 rubles, 15,000 is a white, fixed salary, plus a bonus and it turns out no more than 20,000. Somewhere they promised 25,000 rubles, but this with business trips, it seems 200 rubles a day.
To the question of why such small salaries, some leaders said that they have everything officially, they pay taxes and their salaries are stable. In winter, when construction workers have little work, they pay less than 10,000 rubles or dissolve on unpaid leave.
In one organization, workers had more salaries than foremen, but not much by 3-5 thousand. In this construction company, they promised me a monthly pay of 40,000 rubles. After interviewing companies that promised to pay up to 20,000, I thought I was lucky. After two months of work and receiving a salary of less than 20,000 rubles, I realized that I had been deceived.
I wrote a letter of resignation. The manager asked what was the reason. I replied that they promised from 40,000 to pay less than 20,000 rubles. and how to understand this. I was told that I did not understand them for an interview, how they accrue salaries. Their salary depends on the volume of work performed, and from this volume 30% goes to pay for labor, but you didn’t have a lot of work on the site.
But I was no longer interested in working and waiting when the promised 40,000 rubles would be paid to me from the volume of work performed. I went to Tula to build stadiums, I didn’t succeed once again to work on the spot and work on business trips.
In Gubkin, Belgorod Oblast the same picture, the average salary of construction workers, even less than in Balakovo, 10 000 – 15 000 rubles. How much the construction workers of the city of Gubkin earn, I know because relatives work in construction organizations. To receive 20,000 a month, they must work seven days a week and stay at work.
How much do construction workers in Moscow earn according to job.ru from 47,000 to 150,000 rubles, is a large range true? On average, on the same site they report that it is worth looking for a job with a salary of 48,000, it seems to be true.
In the capital, the picture of earnings is completely different, there is plenty to choose from. How to arrange an interview, they will pay so much if they don’t throw it, but you will find out about it when you work for 1-2 months.
What you need to know about construction in order to receive a salary of more than 50,000 rubles, how to find and get a job in a company with a high salary, I told you in my own.
In Moscow, I arrange at interviews for high salaries of at least 50,000 rubles, but often I offered white at about 13,000, and the rest is on hand.
Last year, he worked in Voronezh, as a foreman on concrete floors, the official was 11,000 rubles, and not the official 40,000 on hand. Currently, I work in a Moscow company, where the official salary is 75,000 rubles.
High black salaries are good, but there is a risk of not getting them. I had many cases when they did not pay me this money.
This year, having worked for 3.5 months in a Moscow company with an official salary of 11,500 rubles. and not official 65,000.
The result was calculated with me as a white salary, but for an unofficial one they said that the whole company did not earn anything in debt, we will not pay. In such cases, nothing can be done?
How much they earn in construction, the picture is clear from my history. I always wondered why work in construction sites is so little valued in the regions, why in Moscow you can find work with decent salaries, and you will never find in the regions.
I asked them in conversations with the heads of organizations, they answered differently, some said that there are federal and regional rates. In federal, the prices for work are higher than in regional ones; therefore, they earn more in Moscow. Another opinion is that now market relations due to the contract between the customer and the contractor depend on salaries.
If I worked at least a lot of estimators, I would definitely answer these questions. In the meantime, as I understand the situation, the turnover in the regions is high. In place of the departed, others come who are willing to sell their labor for a penny, no one has the desire to work away from home. Why should managers think about raising salaries if there is no staff shortage.
But this is all earnings for hire, in order to earn more or less normal money in construction, you need to create your own business (which I have been dreaming of all my life and have not moved in this direction).
How much do developers earn?
President of the financial and construction corporation “Leader” Vladimir Voronin about the myth of the “fabulous” profitability of the construction business:
People have been walking the bike for many years that developers have a fabulous income, that they put 2-3 of its value in each pocket of a square meter sold. Someone even gives specific numbers. Like, the cost of a meter is 1.5 thousand
dollars, and we sell in no way less than 4.5-5 thousand dollars. Where exactly these figures come from, which “analysts” invented them, I do not know.
But I can assume that these very so-called “experts” take the cost of construction and installation works (SMR) as a basis, completely forgetting about such a concept as investment cost.
If we talk about the cost of construction and installation work, then it really more or less corresponds to these 1.5 thousand dollars. Moreover, construction and installation work does not depend much on where to build, in Moscow and the Moscow region. For the economy class today it is about 32 thousand rubles per meter. In the “business” – about 40 thousand rubles. But elite housing is hard to say.
There, the cost of construction can be absolutely any size. No one forbids, for example, covering the walls with gold. But seriously, today on average it is somewhere around 75-90 thousand rubles per square meter. Here it is worth mentioning that this is precisely the current price order.
A small change in the cost of concrete and reinforcement is enough, and all these average prices will immediately change.
As for the investment cost, then everything is much more complicated. If they asked me a year and a half ago, then I could give an answer to this question. Today, investment value cannot be measured at all. Just because nothing is being built in Moscow today, this is not the city for which any figures can be cited.
Therefore, we’ll do without specifics, I’ll just outline what the investment cost used to be. First of all, this is land. In the cost of each square meter, the cost of acquiring a land plot is 700-1000 dollars, depending on the location. Secondly, construction and installation work. This is another plus 1-1.5 thousand.
dollars, depending on the segment. Next, remember about loans. This is generally a separate issue. I look at different companies with 10-15-20 billion rubles loans.
With such amounts, even if you sell a month of housing for 500-600 million rubles, even if a billion, you will monthly give 200-300 million a month only covering interest. If we summarize these 3 components, then it already turns out significantly more than the cost of 1.5 thousand.
dollars, which analysts talk about. And once again I repeat, this was the order about a year ago. Today it is impossible to calculate the investment cost, simply because there is nothing to consider.
Exactly for the same reason, it is difficult to talk about the profitability of the construction business. If we talk about the suburbs, then 15-20% – this is already very good. About any 2-3 “ends” are not talking. Of course, you can build for 1.5 thousand.
dollars per meter. But it will be a new building in the Moscow Region, in a bare field, and even then, provided that the networks let the local or federal authorities down. But for 4.5 thousand.
no one will sell dollars, buyers of such pricing just do not understand.
I can cite as an example my residential complex “Zodiac”. We were very lucky with him. We were built in a crisis when both materials and labor cost much less than now. As a result, we have achieved an investment cost of 90-100 thousand rubles per meter.
At the same time, during the crisis, we did not sell much more. I can’t say that it’s straight at all to zero, but with minimal profitability. Now that the complex has already been completed and almost all apartments have already been sold, we sell the remaining meters there for 250-300 thousand rubles. It turns out just 2-3 “end”.
But if you count throughout the house as a whole, the picture will be completely different.
And finally, about the main thing, about what concerns each potential buyer of real estate. How to make housing cheaper? I have a definite answer to this question: you don’t need to do anything special, the market will regulate everything itself.
There was no demand during the crisis, but there was a large supply volume – prices were minimal. Now nothing is being built, there is no offer, but buyers have intensified. Naturally, prices are creeping up.
In order for prices to be affordable, you just need not to interfere with developers to build more. That’s the whole secret.
How much can you earn on apartment renovation?
There are several levels for the business of repairing residential premises, each of which determines its own size of possible earnings.
- Services of an independent master . Such activities are usually associated with finishing or specialized works (plumbing, electrics). Independent craftsmen often perform partial and cosmetic repairs. Since they work alone, the deadlines are very long, and the prices are minimal, which ultimately provides an income equal to the average salary of 200-300 dollars. In this case, there is a risk that the work will not be paid and the master may be at a loss. Repairing alone takes a very long time.
- Work in a team with equal partnership . When combining several masters (from 3 to 4), profit increases due to a reduction in terms and an increase in the number of customers. The earnings of each partner will be higher than the average salary from 400 to 600 dollars, and the risk of non-payment of work is lower.
- Contractor Services . A small contractor company can work simultaneously on several sites. They act as intermediaries between private customers and repair teams, and therefore their earnings depend on the ability to find customers and control the work of craftsmen. The cost of the services of such a company or private entrepreneur is up to 20% of the total profit. At the same time, earnings are 20% higher than with partnerships and range from $ 3,000 per month.
- Large construction and repair companies . Such organizations have their own permanent staff of highly qualified employees who form several teams and can work interchangeably. They specialize in high-end repairs. At the same time, the work is carried out in-line, which provides a fairly large income of $ 20,000 per month.
- House-building plants . Companies in this area do not work with private clients, carrying out only complex orders for the decoration of newly built apartment buildings. Earnings in this category are the largest and amount to hundreds of thousands of dollars. Work in this area is possible only for companies with extensive experience and serious funding.
Minimum Earnings or Break-Even Point
When preparing a business plan for apartment renovation and determining the cost of services, it is important to calculate the break-even point – the level at which your income will start to make a profit (there will be less expenses). First of all, you must establish the amount of your expenses for doing business (excluding start-up capital). It consists of the following costs:
- salary of employees (on a permanent and piece-rate basis);
- tax deductions (if a simplified taxation scheme is established, for example, patent, a fixed amount is paid);
- transportation costs (laid down on average for the reporting period);
- payment for communications (telephone, Internet);
- website maintenance;
- Construction Materials;
- office rental (if available).
The amount received must be equal to or less than the amount of income. Calculations are based on estimates for one object. It is calculated how many objects must be returned for the analyzed period (for example, for a month or a year) in order to reach the breakeven point.
In this case, it is necessary to take into account the timing of the repair of various types of objects.
So, high-quality repairs in compliance with all technology standards (time to dry materials) for a one-room apartment with an area of 40 square meters takes about 3 months.
Two-room apartments with an area of 60 squares are repaired from 4 to 5 months, and three-room apartments of 120 square meters or more are under repair for up to 6 months.
Example : the average cost of a standard class current repair is $ 100 per square meter of apartment area. Your monthly fixed costs (for organizing a business) are:
- the salary of 10 employees – $ 5,000;
- organizational expenses (advertising, telephone) $ 1,000;
- variable costs for the repair of one object with an area of 40 square meters amount to 2000 dollars.
Thus, you need to rent at least 3 of these apartments in a month, which will currently have an average of 3 employees or repair one apartment with an area of 120 square meters. In this case, the income will be $ 12,000, which will be equal to the cost. In order for the business to start making a profit, you need to repair at least one more such apartment.
Regional income difference
The cost of services for the repair of apartments and, as a result, the income of a construction and repair company depend on the region of activity. This criterion also affects the wages of the workers’ brigade.
So, in large cities, prices are higher, because the demand for services is greater. The cost of repairs in the capital can reach $ 40,000, while in a settlement of up to 500,000 residents it rarely exceeds $ 6,000.
On the other hand, the prices for the services of craftsmen and directly in the regions differ. For example, the highest level of payment for specialist services (salaries) in Smolensk.
It is $ 1,000, and the lowest in Nizhny Novgorod is $ 500. This affects the total amount of expenses.
If we take the cost of services by region as a whole, then for 2017 the highest rates are noted in the Nenets Autonomous Okrug, and the lowest in the Leningrad Region.
Key drivers of lower profits
When planning to make money on apartment renovation, it is very important to consider situations in which your real income may decrease. This includes:
- The presence of marriage in the performance of work . The company or the master makes all corrections during work and repairs during the warranty period at his own expense, which can completely leave it without profit. Therefore, the correct selection of personnel and supplies is very important.
- Violation of the deadlines . An increase in repair time may occur due to the fault of the customer, contractor or independent factors. If the construction workers are to blame, for each day of delay the compensation is set at 0.5% of the total amount of the order, provided that up to a maximum of 10% can be returned. This point and cases in which the fault does not lie with the contractor must be specified in the contract.
- Non-payment by the customer . A similar problem is often encountered by craftsmen and companies (teams) working informally. In this case, your contract does not have legal force and it will be impossible to demand payment of the debt through the court. To avoid this risk, the contract provides for phased payment of services.
- Lack of orders . Seasonal downturns in demand for apartment renovation, economic instability or inefficient advertising can lead to a small number of facilities at which the break-even point is not reached. In this case, it is necessary to revise the marketing plan and expand the target audience (add repair of commercial facilities).
- The use of unprofitable technologies . Modern repair methods can reduce time and consumables.
- Wrong choice of tax system . Once a year, you have the right to change the tax payment scheme, this will allow you, after some practice, to choose a less costly option.
On the topic: How to find clients for apartment renovation for beginners and experienced craftsmen.
How to increase your income
To increase the profit from apartment renovation, it is necessary to include additional functions that do not require significant material costs in the list of services. It could be:
- Design work for an additional fee (a combination of several types of wallpaper, selection of home textiles and decorative interior items).
- Partnership with furniture stores and specialized equipment for a percentage. You can recommend partner products to your customers.
- Purchase of building and finishing materials at wholesale or dealer prices. If the original price of the goods is lower than the retail price (at which the calculation is made with the client), you will receive a profit from building materials. It reaches up to 20% of the purchase price.
- Hiring unskilled staff with low wages. Such employees are attracted to simple ongoing work – scrapping, garbage collection. The salary of an unskilled craftsman is 150-200 dollars a month.
- Work with apartments of a large area. The time, labor of workers and building materials for 3 one-room apartments will be higher than one three-room apartment of equal total area. However, you can also reduce transportation costs.
Accurate data on how much you can earn on apartment renovation in your chosen direction is determined on the basis of information on costs obtained in a practical way. This means that perhaps in the first months you will work at your own expense until you work out the technology and develop the most effective marketing strategy.
Open a business | Construction company, is it a profitable business?
Of course, a business plan is needed for such work, but this is not a paramount task. The most important thing is to get an appropriate education, or at least a good experience in construction.
An entrepreneur needs to know all the intricacies of the provision of certain services, and only on the basis of this knowledge will he be able to determine the specifics of his company.
It can be a very different business – a construction company can play the role of:
- architectural or design bureau
- general contractor
- building materials supplier
Having the necessary knowledge and experience, it is also important to have a team, because even the most qualified professional will not be able to carry out all the work on his own.
Employees are recruited depending on the specifics of the enterprise, however, the initial business plan of the construction company will focus on the recruitment of at least 4-5 employees who will be able to provide various services within the framework of the general concept of work.
The next stage is the official registration and the actual creation of the company. Necessary:
- Register an IP or LLC (the first option is cheaper, but it closes the possibility of providing services to legal entities and government agencies, so it’s better to immediately choose the second one)
- Joining an SRO is necessary, because enterprises that are not members of the SRO cannot rely on orders (for this, an extract from the USRLE is submitted, a copy of the certificate of registration of the enterprise and its tax registration certified by a notary, as well as the Charter of the company)
- Draw up a business plan for a construction company for the first year of operation – as a basis, you can take existing documents of the type that other companies compiled
- Rent a company office, prepare jobs for employees (at first you can save on this by inviting team members to stay home, leaving only for orders)
You will also need to purchase specialized equipment and tools needed in the work. Their number and features depend on the specifics of the company.
And, of course, an important stage will be market research and customer search, and in order to quickly develop a business, a construction company must conduct a competent advertising campaign.
Before organizing it, it is important to study the specifics of the work of competitors and not only identify their strengths, but also to find weaknesses – if existing companies do not offer any services, it is necessary to consider the possibilities of their implementation in the first place.
The construction business for small and medium enterprises is a profitable type of activity. Invested money can be quickly repulsed, and the initial amount of investment is not too high.
But to open a construction company, you need to think through all the stages of the project in advance.
How to start a construction business? What features to consider? How much money do you need to start? Read about it in the article.
Competition in the construction market has always been high. Before opening your company, it is important to decide on the direction of the business. Experts identify several popular areas of construction:
- Private (individual);
- Overhauls, interior decoration of premises for various purposes.
A large construction company will require serious financial investments. As a rule, a novice entrepreneur does not have such money.
If there is little money, the construction business should start with minor repairs and furnishings, gradually expanding the scope of activities. That is, it is reasonable to choose the fourth direction. The average payback of a construction company allows us to expect that investments will pay off in about a year and a half.
After choosing the area of construction, you need to consider the potential range of services. In the case of organizing a small construction company to repair the premises, an approximate list of services looks like this:
- Finishing work;
- Installation and installation of ceiling structures;
- Installation of plumbing, doors, ventilation, air conditioning;
- Electric installation work;
- Painting, wallpapering, primer, wall putty;
- Welding, facade work.
- Furniture assembly.
How to open a construction company from scratch step by step
Having decided which sphere of construction the company will deal with, the entrepreneur draws up a detailed business plan.
The next steps for starting a construction company from scratch are as follows:
- Company registration;
- Search for premises;
- State formation;
- Obtaining licenses (if required);
- Equipment purchase;
- Advertising campaign.
Some activities will require entry into a self-regulatory organization (SRO). For instance:
- the construction of buildings with a height of more than 3 floors;
- the construction of facilities underground more than 15 meters;
- installation of reinforced concrete and metal structures;
- the device of industrial facilities and gas (oil) industry;
- capital repairs of railways;
- construction of the metro, roads, mines;
- the construction of bridges.
The activities of SROs, in turn, are regulated by such legislative acts as:
- Federal Law No. 190 (Urban Planning Code of the Russian Federation);
- Federal Law No. 315 (On Self-Regulating Organizations);
- Federal Law No. 384 (Technical Regulations for the Safety of Buildings and Structures);
- Federal Law No. 384 (On Technical Regulation)
Organizational and legal foundations of the construction business
In the construction industry, LLC or IE is most often registered. For a start-up company, the design of IP is suitable.
It is profitable to open an LLC to those who plan to move from a small and medium construction business to a large one. For this type of activity additional permits will be required. They can only be obtained with a legal entity.
In the process of company registration in the tax office, the following OKVED codes are indicated:
|Digital code||Name of works|
|45.45||Finishing and other finishing work|
|45.43||Flooring, wall cladding|
The taxation system of a company largely depends on the type of services provided. According to OKUN (All-Russian Classifier of Services to the Population), repair of premises refers to household services.
Therefore, a businessman can use such taxation systems as “simplified” (USN) or “imputed” (UTII). The first system is suitable for companies that make repairs in commercial premises and concludes a contract with a legal entity. The second is for those who work with individuals.
In addition to the main package of documents, contract forms, a seal, a price list for services and a bank account are needed.
Choosing a room and buying equipment
Most of the work is done directly at the facility, so the location of the company is not as important as with other activities. For a mid-level construction company, it’s enough to rent a small office in any area of the city.
There you can negotiate with customers, sign service contracts. Documentation is stored in the same room. Small construction crews can do without an office at all. but for a reputable firm in the construction business, an office is a must.
Otherwise, you simply will not be taken seriously.
The number and type of equipment for the construction team depends on the type of work performed.
Below is a list of the main tools that are required to finish the room.
- paint rollers, brushes, stamps;
- containers for building mixtures;
- stationery knives;
- plumb bob;
- milling cutter;
- electric jigsaw, planer.
Each team should be provided with a full set of equipment for the repair of premises of any complexity. In addition to tools, uniforms, office furniture, a computer, a printer and other office equipment are purchased.
Staff for the construction team
The construction business is fraught with serious production risks, so you will have to pay attention and time to a thorough selection of personnel.
At first, it is better to form two teams that will work at different sites. It is recommended to include in the team people of those professions that are indicated in the third issue of the Unified Tariff and Qualification Handbook of Jobs and Professions of Workers (ETKS, section “Construction, Installation, Repair and Construction Work”).
The optimal composition of the team:
- Plasterer painter;
The salary of construction company employees is piece-rate, that is, it is calculated based on the total amount of the paid order. If an entrepreneur acts as a team leader, he receives from 50 to 60%, the rest – from 25 to 45%. In another situation, the salary is distributed as follows: the owner of the company – 60%, the team leader – 20%, the rest of the employees – 20%.
Construction business advertising
An advertising campaign to promote the services of a small construction team has its own specifics. The most effective way for a small company – posting ads and word of mouth. Service announcements are printed on bright paper and distributed mainly in areas with new buildings.
Advertising on the Internet and newspapers is a good option to attract the attention of potential customers. Creation of a firm’s website is best entrusted to professionals The key principle of building team advertising on the Internet is to regularly update data on types of services, discounts, and cost of work.
A more expensive option is advertising on television and radio. In this case, the individual entrepreneur or the newly opened LLC must be very careful about the costs, since the investments may not pay off.
How much does it cost to open a construction company
The initial cost of the project is difficult to assess. It depends on many factors, such as the number of employees, the price of the equipment purchased, on the chosen legal form of the construction company. On average, to create a small enterprise in the construction industry will need from 350 to 600 thousand rubles.
Approximate calculation of starting:
|Expense item||Cost in rubles|
|Premises for rent||10,000|
|PHOT (including personal income tax)||140,000|
|Pension fund contributions||30800|
|Outsourced employee services||9000|
|Contingency * (20%)||70400|
* Unforeseen expenses – cash reserve necessary for the purchase of additional materials during the repair.
At the preparatory stage of creating a construction business, it is worth calculating the possible risks and developing measures to prevent them. External risks are associated with a decrease in household incomes, increased competition, and the unfair attitude of the customer to his obligations. The likelihood of such risks, according to experts, changes annually.
Internal risks include:
- lack of staff;
- low qualification of workers;
- equipment breakdown;
- performance of work under the contract not on time.
Avoid such situations will allow regular monitoring of the functioning of the company, the ability to attract additional funds and the correct analysis of the construction industry market.
- 1 How much does a construction company earn?
- 2 How much does a construction company earn?
- 3 How to open from scratch, examples and a ready-made plan with calculations for beginners
- 4 How much do company owner earn in construction
- 5 How much do developers earn?
- 6 How much can you earn on apartment renovation?
- 7 Open a business | Construction company, is it a profitable business?
- 8 Building bussiness