So you’re thinking about starting your own construction business. Maybe you’ve spent years working for someone else, getting up at 5am, driving to sites in the rain, and thinking – honestly – “I could run this better myself.” Maybe you’re right. But wanting to start a business and actually doing it without making expensive mistakes ? That’s a different story.

Let me walk you through the key steps, the ones that actually matter, because there’s a lot of noise out there and not all of it is useful.

First Things First : What Kind of Structure Are You Dealing With ?

The construction and civil engineering sector – the BTP as it’s known in France – is one of the most diverse industries you can enter. We’re talking everything from groundwork and earthmoving to plumbing, electrical, roofing, insulation. Each trade has its own rules, certifications, and insurance requirements. If you want a concrete example of how a specialist operator structures their offer in groundwork and drainage, have a look at assainissement-terrassement-vienne.fr – it gives you a clear picture of what a focused, professional positioning looks like in this niche. Before you do anything else, you need to be crystal clear on what you’re actually offering.

Are you a sole trader doing small renovation jobs ? Or are you planning a proper limited company with employees and subcontractors ? The answer changes everything – your legal structure, your tax setup, your liability exposure.

Choosing the right legal structure is genuinely one of the most important decisions you’ll make, and it’s not the most glamorous topic, I know. But getting it wrong can cost you thousands later. In the UK, most small construction contractors start as a sole trader or set up a limited company (Ltd). The Ltd route offers more protection if things go wrong – your personal assets aren’t on the line in the same way. The downside ? More admin, more accountancy fees.

The Certifications and Insurance You Cannot Skip

This is where a lot of newcomers come unstuck. In construction, you can’t just rock up with a van and tools and start trading. There are legal requirements that apply depending on your trade and the type of work you do.

In the UK, here’s what you typically need to think about :

CSCS Card (Construction Skills Certification Scheme) – most sites won’t let you on without one. It proves your health and safety competence. Getting one isn’t complicated, but you need to pass the Health, Safety and Environment test and show evidence of relevant qualifications.

Public liability insurance – this is non-negotiable. If something goes wrong on site and a member of the public gets hurt or their property is damaged, you need cover. £1 million minimum is standard, but many clients and contracts will require £2 million or £5 million. Don’t skimp here.

Employer’s liability insurance – the moment you take on a single employee, this becomes a legal requirement. Full stop.

Professional indemnity insurance – less universal in construction than in other sectors, but if you’re offering design-build services or any kind of specialist advice alongside your physical work, you’ll want this.

I find that a lot of new contractors underestimate insurance costs. Budget realistically – for a small construction business, you might be looking at anywhere from £500 to £2,000+ per year depending on your turnover and the nature of your work.

Registering the Business : The Practical Steps

If you’re going sole trader, registration is simple. You register with HMRC for self-assessment, and that’s largely it. If you’re setting up a limited company, you register through Companies House – you can do it online in about 24 hours for £12. You’ll need a company name, a registered address, at least one director, and details of shareholders.

After that, you’ll need to register for VAT if your taxable turnover exceeds £90,000 (as of 2024). In construction, you’ll also need to know about the Construction Industry Scheme (CIS) – this affects how payments are made between contractors and subcontractors, with tax deducted at source. If you’re using subbies, or if you’re working as a subcontractor yourself, you need to understand this scheme properly or you’ll end up in a mess with HMRC.

Seriously. CIS is one of those things that trips people up constantly. Talk to an accountant who specialises in construction before you start invoicing.

Building a Client Base : The Reality

Nobody is going to hand you contracts just because you’ve registered a company. That’s the hard truth. In construction, reputation and relationships are everything, and when you’re starting from scratch, you have neither.

A few things that actually work :

Start local. Genuinely. The construction sector runs on local relationships. Introduce yourself to local builders merchants, attend trade events, join your local Federation of Master Builders chapter if you can. Word of mouth spreads faster in a 30-mile radius than any Google ad.

Get on the right platforms. For domestic work, sites like Checkatrade, MyBuilder, or TrustATrader can generate early leads. For commercial work, you’ll want to register on procurement portals. Contracts Finder (the government portal) lists public sector opportunities and is free to use.

Your online presence matters more than you think. A professional website – even a simple one – with clear services, a local area focus, and genuine reviews makes a massive difference. A lot of tradespeople still don’t have one, which means it’s actually quite easy to stand out.

Pricing Your Work : Don’t Race to the Bottom

I’ve seen businesses struggle not because they didn’t get enough work, but because they priced that work wrong. Underquoting to win jobs is a trap. You end up exhausted, cash-poor, and resentful.

When pricing jobs, you need to account for :

  • Materials (with a realistic buffer for price changes)
  • Labour – your own time at a proper hourly rate, not minimum wage
  • Overheads – vehicle costs, insurance, tools, accounting, phone
  • A profit margin – typically 10–20% on top of all costs

Direct cost + overheads + profit = your minimum quote. Anything below that and you’re paying to do someone else’s work.

Get into the habit of tracking every project – time spent, materials used, invoices in and out. This data is invaluable when you’re quoting future jobs.

Cash Flow : The Thing That Kills Good Businesses

Maybe the most important section in this whole article. Cash flow kills construction businesses. Not bad workmanship. Not lack of clients. Cash flow.

Construction has a particularly nasty dynamic : you often have to pay for materials and labour upfront, but you might wait 30, 60, or even 90 days to get paid by a main contractor. That gap can strangle you.

A few ways to protect yourself :

Get deposits upfront – for domestic work, asking for 30–50% upfront is standard and completely reasonable. Any client who refuses should make you nervous.

Invoice quickly – don’t let invoices pile up. Invoice on completion (or at agreed milestones for larger projects).

Use a business bank account – keep your business finances separate from personal spending from day one. It makes your accounting cleaner and helps you see what’s actually happening with your money.

Consider invoice financing – if you’re doing commercial work with long payment terms, products like invoice factoring or discounting can help bridge the gap. Not free, but sometimes necessary.

A Few Things Nobody Tells You

The admin load will surprise you. Running a construction business means estimates, invoices, contracts, compliance documents, site records, COSHH assessments if you’re using hazardous materials, CIS returns… It doesn’t stop. Budget time for this, or hire someone to help.

Subcontractors are not employees, legally speaking – but HMRC has been clamping down hard on false self-employment in construction. If you’re directing how and when someone works, providing all their tools, and they work exclusively for you, they may be classified as an employee regardless of what your contract says. Get proper advice on this.

And finally – permits and planning. Depending on the work you do, you may need to notify Building Control, get planning permission, apply for road closure licences, or comply with CDM regulations (Construction Design and Management). These aren’t optional extras. Build compliance into your project timelines from the start.

The Bottom Line

Starting a construction business is genuinely achievable, and the sector has real demand. But it rewards preparation and punishes shortcuts. Sort your legal structure, get your insurance right, understand CIS, price properly, and protect your cash flow. Do those things, and you’re already ahead of a large chunk of the competition.

The rest – reputation, clients, growth – builds from there. One job at a time.