Venturing into the construction/ engineering business in Nigeria is very lucrative, as Nigeria offers huge potential for any type of business to grow due to its population density, and large land area.
To thrive in the construction/ engineering business in Nigeria note that cash/money is essential, and you need to be well-versed in all aspects of building, from acquiring the land and building materials to managing employees and contractors.
However, if you are ready for this challenge below are some tips to get you started:
- Funding.
- Choose the business structure and area of construction/ engineering to embark on.
- Choose a lucrative business location.
- Register your construction/ engineering company.
- Purchase or lease an office for the company.
- Get a team of reputable engineers.
- Purchase vehicles and tools, you need to get started.
- Advertise your services.
1. Funding (cash is king).
Starting a construction company is not as easy as it sounds, but it’s profitable when you do it right.
When you want to start a construction/ engineering company in Nigeria, you must ensure you have enough capital. You can’t just start with nothing and expect it to work out for you.
You need money for research, tools, vehicles, reputable contractors/suppliers, etc.
Start-up capital is important because it will help you get started on your business immediately without getting any delays or setbacks due to a lack of funds. The business structure type you choose determines the amount of funding needed and how to get it.
2. Choose a business structure.
When starting a construction/ engineering business, choose a structure that suits the area you want to focus on, be it specializing in structural, transportation, electrical, mechanical, or building services like roofing, plumbing, or other aspects of Engineering services. Whichever you choose, different business structure types will suit your need, they include Sole proprietorship, Partnership, and Cooperation (limited liability company). You can also patent your innovations and trademark your brand, business name, and logo, with the Federal Ministry of Trade and Investment to protect your business and possess the legal right of your brand.
Factors to consider when choosing a business structure for your construction company include, but are not limited to the following:
- Flexibility: business growth and expansion should be considered when choosing a business type. Would you want your company to grow beyond the walls of your city and state? Then partnership or co-operation business type is for you, as sole proprietorship business is limited to a certain level in terms of growth.
- Taxes: as a business, you pay a percentage of your income to the government, sole proprietorship pays its personal income tax though lesser, but the partnership and co-operation pay both personal income tax (by the board of directors) and company income tax.
- Liability: responsibility differs with the various business type, sole proprietorship is responsible for the business e.g. decision making, and paying off debt. but in Cooperation, the company’s board of directors is responsible for the business’s decision-making.
- Capital investment: money is necessary for the growth and sustenance of any business type. Co-operations can source money individually or get loans from banks to support the business. This is not the case for sole proprietorship as you will support your business with personal income or from family/friends and you are limited to a certain amount of loan from the banks.
- Control
- Licences and permits etc.
3. Choose a lucrative business location.
Once you have decided on the type of construction/ engineering company you want to start, it’s time to choose a business location. The following are the guidelines for choosing the right location:
- choose a location that is accessible. Your customers should be able to easily access your office and materials without much difficulty. This will ensure that they can get what they need from you quickly and avoid unnecessary delays in their projects or other works being done with their money.
- Ensure your location is visible and accessible on Google maps.
- Choose a location that has good infrastructure (e.g. roads). The good road makes transportation easier for both yourself as well as clients who may need to visit frequently to discuss any issues related to an ongoing project.
4. Register your construction company.
Registering your construction company with government agencies, after deciding on the name and area to embark on is very important. Agencies like the Cooperate Affairs Commission (CAC) issue your license to operate in Nigeria legally without being sanctioned by the government for illegal practice. You can register online or at one of their offices around Nigeria. (How to register with CAC)
5. Get an office for the company.
You will need to purchase or lease an office and store with sufficient space for equipment and workers. If you buy, ensure that it is large enough to house all of your equipment and people, otherwise, you won’t have room for expansion when business picks up. If possible try to rent a small but expandable office space; this is more affordable and will make it easier for you to grow over time (as a bad office location and space may even put off potential customers).
6. Get a team of reputable engineers.
Build a team of professionals in their various fields of engineering. Your team should consist of Engineers, Architects, Plumbers, Electricians, Project managers, etc., that will build quality structures and also offer professional advice to you based on their experience. look for reputable contractors and suppliers who will give you high-quality material at affordable prices.
7. Purchase resources, vehicles, and tools, you need to get started.
You can’t do much without some tools e.g. trucks and bulldozers. When starting your business, you will need to purchase some tools, that will help get the job done.
You should invest in good quality machinery because it will last longer and give better results than cheaper alternatives. Buying second-hand machinery is another option if you are on a tight budget; however, make sure the equipment is in good condition before buying it.
8. Advertise your services.
Now that you have the basics of your company set up, it’s time to create awareness/advertise your services on various social media platforms like Facebook, Instagram, and Twitter, etc., you can also advertise on Google and relevant trade magazines to attract potential clients. At this point, you need to build a website for your company where you can advertise your products and services.
Note: the more recognizable or memorable your brand is, the easier it is for customers to remember when they need construction work done again in the future.