hoe to start a construction bussiness in india?

Very well said by Pragya, Mr. Narayan & Mr. James.

The "basics" are easy.  Any Business 101 course...or in my country, for example, a visit to the Small Business Administration...will provide you with a checklist of the major ingredients necessary to start a new business in the construction industry...such as the things listed above under "Things you'll need".

However, the most important things you need are less tangible, more difficult to assemble for some, and oftentimes neglected entirely...especially by those who end up going out of business their first year.  Those things are: 1) Experience, there is no substitute for it.  If you don't have it then you need to hire it...and be willing to pay well for it.  You will not excell without it; 2) Good Reputation, for the quality of your work, your determination and persistence, and for your honesty and integrity.  You need to be know for someone whose organization does good work (on time and under budget, as well) and will not just honor his contract, but stand by his word, no matter what.  Such "assets" will prove to be invaluable; And 3) Network of Associates, that is, others in the industry who know you for your who you are and what you can do...and are willing to recommend you to others and send you leads. 

There are a lot of people with professional degrees, some working capital and/or credit, and a few good ideas.  BUT, unless they are able to bring to the table...on their own or by means of key employees...the ingredients of Experience, Reputation and Network, their chances of getting past their first year in business are extremely slim.  

If you plan to develop a residential or commercial building, you may need the following -

1. Land – You have to possess the Land, which is the prime raw material for this industry. If you possess the land in the right place at the right time it would make it tremendously easy to start a construction company.

1. If you are rich, you can buy the land.
2. Else, you may need a land owner who is willing to partner with you. In this case it would be better if you are well equipped for the business in terms of experience (working with other developers), knowledge about legalities and other local rules and regulations, money, business acumen, etc., so that the land owner will have the confidence to partner with you.

2. Business Plan – You have to have a strong business plan along with all the financial aspects in order to convince the funder as well as the land owner.

3. Fund for the project – If you don’t have the funds to construct and sell the building, it is a must that you tie-up with a funder on a profit sharing basis. The share of profits would depend on various factors like funds required, timelines, risk, etc. However, you cannot expect to get a funder for 100% project cost. You may have to put in some funds yourselves. If you have another property, you may use it as collateral to generate this fund.

4. Proper Value Addition – Land by itself has only “X” value. It is what is done to the land (or the possibility of value addition) that gives it greater value (“X”+”Y”, **where in most cases “Y” is much greater than “X”). Hence, you have to come up with something great in your business plan. Depending on the location, probably you can come up with a development that is different and not been tried before, i.e., if being different would earn more revenue as well as sell the project quickly, then go for the differentiation. You have to make the project stand out and make it attractive.

** If the Land Value is 1 crore and the construction and other costs work out to 3 crores, then the land share of the project is only 1/3^rd. And the land owner’s share would be worked out based on this.

These are some of the most important things that you require for a start up Construction Company (Residential and Commercial buildings).