In India construction is the second most industry in terms of employment.
The Construction industry in India consists of the Real estate as well as the Urban development segment. The Real estate segment covers residential, office, retail, hotels and leisure parks, among others. While Urban development segment broadly consists of sub-segments such as Water supply, Sanitation, Urban transport, Schools, and Healthcare. Indian real estate attracted $5 billion institutional investments in 2020.
It contributes 9% GDP of Indian economy and employs about 51million people approximately.
The Construction Industry is expected to reach $1.4 Tn by 2025
Construction Industry received the 2nd highest FDI in the period 2000-2020
The Construction Industry works across 250 sub-sectors with linkages across sectors. Broadly, it can be divided into real estate and infrastructure construction.
The Real Estate Industry in India is expected to reach $1 Tn by 2030 and contributes to 13% of GDP
Under NIP, India has an investment budget of $1.4 Tn on infrastructure - 24% on renewable energy, 19% on roads & highways, 16% on urban infrastructure, and 13% on railways.
In this wide industry construction material supply is also a highest revenue business. Also, it is one of the competitive business overall. But over a decade there are thousands of new products and technology are being introduced in this sector as an evolution. So, there is always a space for newcomers.
Are you among the one who would like to start the construction material business?
This article will show you some light about where you have to start.
Before starting any business, you may need to follow the below three steps:
When you start doing analysis try to find answer for the below questions
What material would you like to do business with?
Where would you like to start your business?
What is your budget?
Who will be your customers?
The following materials are majorly used in construction industry:
1.Bricks and Sands
2.Cement and TMT bars
10. Paver Blocks
11. Sanitary ware
19.Wall cladding Tiles
20. Artificial Stones /Cladding
You can either choose one of the above products can be a manufacturer or wholesaler
Or you can choose multiple aligned products and can be a retailer.
We will see step by step requirement for initiating your business,
Where would you start the business?
The simple answer for this is market analysis. You can divide the Indian construction market into 3 types.
Type A, B and C.
Type A: Metropolitan cities (Urban areas) (Like Mumbai, Chennai,Kolkatta,Bangalore…) which is hot spot for construction ,Commercial buildings and real estate. Here you can grow your business in a very short time. At the same time competition in these cities will be very high. Because you may not the first one to start the business. In these cites the business volume will be high. So, you may need to maintain your stock accordingly which in turn increase your investment cost. These cities are much suitable for manufacturing, wholesale, and retail.
Type B: These cities (Semi-Urban areas) are where each districts headquarters is located. Here also there will be high volume business. Best place to have wholesale and retail shops.
Type C: (Rural areas) These are all small towns surrounded by villages. Here most of the buyers are individuals. These are comparatively slow-moving markets at the same time with less competitive environment.
The above are general market trends. To know the actual volume and market analysis it would be better to do a personal analysis or hiring a experienced professionals in the same field would be good option.
Who will be your customers?
Manufacturers directly sell their products to Wholesales or retailers. And manufacturers offer price discounts based on volume of purchase. Higher the purchase volume greater the discounts.
Wholesalers sells their products to retailers and contractors with the condition of minimum purchase quantity/Value.
Retailers sell their products to Contractors and individual buyers.
What is your budget?
Estimating the total budget of the project is much important part.For new startups many banks are providing loan.Maximum possibility for starter is , you can get mortgage loan for any initial investment.But once you start creating revenue ,banks offer loans based on business revenues.We can divide the budget into to:
This is cost that includes cost of
Land (Buy/Rent Basis)
Storage yard construction/Lease /Rent advance
Running Cost includes:
Raw material /Product purchase
Cost of marketing/Branding/Advertising.
Cost of land/Shop rent
The above cost will vary depends on where you are going to start the Business.
The total budget you may required may vary in the following City order.
Type A >>Type B>Type C.
After the analysis you can start your planning for,
Step 1: Finalize the product
Step 2: Finalize the place where you are going to start your business.
Step 3: Finalize the Budget and finance arrangements.
Create a clear plan that explains your business path. It should also includes reports of estimated future goals the business.
When planning is over and you have finalized your business, you can advertise your business inauguration and enter the market.
When you follow the above steps one by one there is maximum possibility for success.
The only advice is don’t do it in a reverse way which will become like walking on a slippery path.