Category Archives: Business

Do not just jump into construction business without prior experience

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Getting into a new business is never an easy task. It takes lots of guts and encouragement from others to take such a mammoth step. When you get into a business you will get to see how difficult it is to sustain in a competitive environment where everybody is running to make profits. Well there are few who are not only there in a business for money but they sincerely like that part of work which is why they got themselves into it so that they can pursue their dream work and can make good money from it. This means that they will love every part of their job and will never feel agonized by the pressure that they will probably feel coming from outside. People who are in a business solely for money will not be able to take it for long and there will be a time when they will feel saturated and will want to end it up there.

Other than love for what you do the next most important part is how experienced you are in what you are doing. Your experience will matter a lot when it comes to generating profit out of your business. If you see yourself to be a part of the construction business then having prior experience in this stream is of utter importance. You have to know about stuffs that are important for your business and that will help you to take correct business decisions. A person who has absolutely no experience in the construction sector will be completely dependent on advices coming from others. He will not have even the slightest of ideas if the advices are correct or not. He might take implement those ideas at face value and the repercussions could be drastic.

No doubt that one learns from his mistakes but simultaneously it is also important that they should gather some information on the subject that they would be starting their business. When you are in the construction business you are required to know a lot of things concerning to the business. For instance, you need to know how much to pay to whom. You have to know the industry standards and simultaneously should pay your employees. This is perhaps the most basic thing that one must know before he gets into any form of business.

It is advisable that you should first work in a construction company for few years and try to learn the tricks of the trade. You should have a fair deal of knowledge about how various department functions in tandem with each other. Other than that, heavy equipment play a crucial role in any construction jobsite. Learning few tricks of the machine will also help you a long way. People who get a construction business as legacy are also expected to learn the business first and then be a part of the tenured guys. First he needs to get some experience and learn the business well to make his place amongst the big names in the company.

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Not getting enough business should not be the reason to wind your company

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Every business has both ups and downs and so one must ensure that he takes all possible measure to try to keep his business afloat during the downs and try to save as much as he can during the ups. This is perhaps the most common phenomenon of probably every successful businessman all around the world. This phenomenon is not limited to just one particular industry but is accepted in any kind of business. We have witnessed the same instance in the construction industry many times.

People belonging to this industry often see it to be the ever blooming one and does not pay much attention to the fact that it can also have a downward trend which can appear anytime sooner. So they simply lack to take any precaution and happy making more expenses. But there also comes a time when you stop getting business. This could be due to several reasons. There has been a sudden increase in the price of raw materials or the policies of the government as such that it does not favor the construction segment. These could be few reasons why the business may take a dip and it becomes imperative for the business owner to take necessary steps in advance so that he can eventually save his business from completely winding up.

There are few tips that one should follow to keep his business floating and not think about winding it up.

Maintain a contingency fund:-

Maintaining a contingency fund is quite crucial when you are part of a business that is highly volatile. While you have set up the contingency fund, it is also imperative that you add some amount on a monthly basis and increase its corpus. At the same time, you should invest that amount is some debt funds where you averse from taking risks and are also content with the little returns that it is able to give you. What is important for you is to accumulate funds for the bad time keeping aside the intention to achieve good returns. So when you see the business is on its down, you can depend on the money that you have in the emergency kitty. Likewise you can also maintain a separate fund for business expansion which can be used for purposes related to the expansion of your business.

Cut down your operational costs:-

Cutting down your operational costs will help you big deal at times when the business is not doing to its potential. You have to give a clear instruction to the various levels of departments that they need to reduce the operational cost or they may have to face expulsion. Construction business being a volatile one does not stay put at one juncture for a long time and therefore there is every chance for it to bounce back real soon. If at all things get worse, then you might even take the decision to do away with assets that are no longer worthy to the company. These are few things that can be done to keep your business alive.

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Challenges most small contractors experiences

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Like many other industries, construction industry is one such sector where beginners have a tough time while they give a start to the business. They got to understand the tricks of the trade and then play the game keeping its rules into consideration. Apart from this, there are always big companies that are waiting to eat up the small budding ones. They do want much competition to their set business. However, it is not always that you experience a direct threat from the old players but many have bitter experiences as well. Small contractors who are primarily fresher and do not know how to run the business can face horrendous situations due to their inability to tackle them.

We will be talking about some generic challenges that most newcomers experience and what can be done to do away with those challenges and end up becoming a successful entrepreneur.

Knowing the business:-

It is very crucial that you know your business well before you get into it. This does not imply that you should know everything about it. This may not be virtually possible for someone to know everything about his business first and then get into it. We all learn while we do something but before we start doing something as important as getting into the construction business, we should know the pros and cons of the business. You can talk to industry specialists about it and take guidance from people whom you can trust. Try to generate contacts with people who have been for a while in this industry. You can expect some good advices coming from them which might help you to steer your way in this business.

Do not overspend on anything:-

You need not have a swanky office if you intend to become a contractor. A normal office will do. Clients check your work history to give you contracts and not the sort of office you have leased. Also, do not go on a buying spree for heavy equipment. They form an integral part of the business you are getting into but your selection should be on the basis of your requirement. You can also take machines on lease. So you do not have to necessarily buy heavy equipment to work. You can take them on rent and fulfill your purpose. Many budding contractors seem to do this mistake and repent later.

Do not fall for offers that are unethical:-

If you are new to this business, you will meet people who will give you offers that may not be ethical but definitely alluring. You might be in desperate need of work and may consider it to be a wonderful offer. But this can be a trap and might end your career as a contractor. By no means should you accept any offer that goes against the norms of the law of the land how enticing it may be. You got to patient to get business. Showing any form of desperation can go against you and can lead you into serious trouble.

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Heavy Equipment Guy

Being customer centric will help you grow in the construction business

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Customers are considered as king of the market. The makers of products produce goods on the basis of the wants and demands in the market and the wants and demands are of the customers. This means that they have to produce items that are in trend and are liked by people at that time. Though trend keeps on changing so once the trend changes the makers also have to switch to the next trend that making buzz in the market. They always have to be on their toes to meet the needs and demands of the customers. While they are meeting the needs of the customers they also need to pay good deal of attention to the fact that they provide them with exceptional quality or else customers always have a choice and they can move on to the next provider. You will only end up in losing business simply because you did not give much importance to the quality of the product.

In the construction domain, the voice of the customer plays a very crucial role in the growth of a company. They may have the best heavy equipment and may use top notch materials to build the buildings but at the end of the day they also need to check that whatever they are constructing, is it as per the wants of the customer and does it goes with the trend of the time.

Knowing the pulse of the customer is important:-

For the survival and steady growth of the construction company, it is very important that they first try to read the pulse of the customer. Check what they can do to make things better for them and accordingly build something that should not be less than exceptional. Customers should feel that they have got the worth of their money and you in turn build reputation from your good work. Getting new businesses in this domain becomes difficult when you do not have goodwill backing your company. If you are into building apartments for people to live, your reputation will speak about you and therefore people will book the apartments right from the period the building is getting constructed. You can achieve this reputation only if you can read the pulse of the customer properly.

Provide them with state of the art amenities:-

When you sell apartments that have state of the art amenities, it sells faster. You can market the apartments on the basis of the amenities that you will offer to the general public. Knowing on what you will offer, people will be interested to book their apartments in your building. This also acts as a brilliant marketing strategy that will drive many to go for apartments constructed by you. You can also charge them for the luxury but that should not be exponential. You should not be money oriented but should be more customer centric. You should quote the amount that gives you your profit. If you try to become greedy and quote higher amount, people will look for someone else.

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Challenges contractors face in the construction business

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Every business has its own ups and downs and people who own a business have to go through several challenges in order to survive in it. Similarly, construction business is all about taking up challenges coming from various corners and turning every calamity into a possible opportunity. Well this defines your character and the temperament you have got. This will also define if you will be able to carry on for long in this industry. Many join the construction business thinking that it is easy money. People who think this way have never been a part of this industry before and one who has been a part will never think this way.

They fear to broaden their horizons:-

Some contractors are doing marvelously in their area but when it comes to expand their business and move to other states, they catch cold feet thinking about it. They may have to overcome a lot of difficulties and uncertainties but that is part of the game and since they have created their comfort zone in the place they are operating then someone else might come there who will be a bigger player and might eat up the small fish. This is a stark reality of this industry. No one is secure in this form of a business and this is why it is important for contractors to expand their wings and think of flying higher. Differences in regulations and laws between the states will persist but when you start to get into it you will find that most of the laws of the other state that you are venturing in is the same as it is in your state. There may few minute differences but apart from that everything else will be common.

Trustworthy laborers are a real challenge:-

Construction workers are hard to find especially when there are big companies who are picking them for a better package. Contractors are losing their men to these big companies and hence find this to be a bigger threat than anything else. Well, the solution for this is quite simple. You need to increase the pay of your skilled labor. Workers ideally do not want to leave their existing employer if they are paid as per the industry standards. They know their worth for sure and it is time that contractors too know their worth. Once you begin to pay them like others do you will rarely see the laborers leaving your company?

Embrace technology with both hands:-

The sooner you befriend technology the better it will be for you and for your business. Right from having the latest device on your heavy equipment to creating a website that is visible to everyone, you need to ensure that you do not lack a bit when it comes to using technological applications. Get hold of a website designer who has created websites of construction companies and other contractors. Such guys will know the kind of stuff you need in your website and therefore will make the best for you.

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Never let the zeal to get more business dry out

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One should always be satisfied with whatever little he gets but at the same time his hunger to get more should not die. It is perhaps this passion of his that will keep him ticking during the rough patches of his business. Laying concrete strategy is one thing but when it has to come to the ground for implementation there lies the real zeal of the business owner and this zeal to get more and more business will also take him to the many levels that many aspire to reach in the construction industry.

Many enter the construction business with an incorrect notion that they can make good money without having to shed much effort. They believe that getting business is simple but industry experts find the truth to be completely other way round. In order to get business you need to have all your stuffs in place. Right from heavy equipment to a track record that is impeccable, you have to display all of them to get some business.

Getting small may not be much of a struggle but there will be a point when you will mind doing petty work and want to get into something bigger. This is when you will start experiencing acute hardships and failures. They may even become the part and parcel of your daily routine but this is what the leaders of the construction industry had also gone through. They had their share of rough patches but what they did different that most did not do is they stuck to the ground and kept their zeal alive to continue the search of getting more business.

Your confidence will keep your zeal alive:-

Folks who are new to the business and do not have anyone who can guide them ideally lose their confidence when they see things not working for them. They do not see the light out of the tunnel and find themselves to be completely lost in their endeavor. It is absolutely critical for such men to first generate some confidence and remain hopeful that luck will favor them. When you go to market your company, the person on the other side of the table first checks your confidence and then the stuff that you are presenting. So you may be marvelous in your work but self-confidence also speaks loud and you need to pay stress on developing that. It actually keeps your enthusiasm to get more business alive.

People start knowing you:-

You drop in to the office to check if they can give you a contract. They saying NO should not disappoint you because by reaching out to them and dropping your business card at their office will let them remember you. Also check out the classified part where people are looking out for contractors to give them work. So be open to that as well and try and meet as many people as you can. A “NO” now does not mean a “NO” forever. There will be a time when they will really need your services. So meeting people often should be your priority.

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How to train the newcomers in the construction industry

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Recruiting new people in your company is a sign that your company is growing. But apart from that, it becomes the responsibility of the tenured men/women to see that the newcomers feel at ease. They do not have to struggle for petty things. Since they are new to the company they will not know the rules and regulations formed by the company for its employees and therefore they might do something that is kind of forbidden in the rulebook of that particular company.

The veterans should therefore lead the way and informed the new guys of the rules. Things that they should do and stuffs that they should refrain from doing should be explicitly communicated to them. Other than that, they should be guided with other facilities like restrooms, pantry, cafeteria etc. Most importantly, they should be guided on doing their work the right way.

Day in and day out, new people join the construction industry. Some are absolutely new to the industry and some have worked in other construction companies and have switched jobs. There is a variance among these 2 sections. For the ones who are absolutely new to the industry should be taken care quite delicately. They do not know anything about the business and hence they should be first given some training so that they understand the etiquettes of the business. Simultaneously they should also be trained on their work so that they can learn both the things at the same time. Being new to the industry, they might take some time to understand how things work here but if they are sharp, they will catch things up real soon.

For people who already have some experience in the construction industry, they only need to be updated about the etiquettes one should follow while they are a part of the company. Rest is expected to be already known to them.

One should be patient while training newbie:-

The trainer or veteran who has been assigned the responsibility to train the newbie has to be a guy with ample patience. He just can’t manage to lose his cool. The new guys will throw questions at him. Some will make sense to him and some will not. But he should not disregard any question or grumble when he gets a question that is according to him an incorrect one or make no sense. The newcomers are bound to make all sorts of question and the trainer needs to answer them patiently and by giving examples.

Practical approach is a must:-

Training on any construction related subject can’t be taught only in a classroom. They guys need to learn things on the jobsite. They need to see things happening and how others are working. They should be allowed to try while they have someone around them who will monitor their work and if correct them if they go wrong. This is perhaps the only way by which they can learn things sooner.

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Having a mixture of immigrants is healthy for your construction company

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United States is a place that has people coming from all walks of life and they come to this place to have a decent life. It is probably the only country in the entire world which has people coming from different countries to make their dream come true. On an annual basis, US is seeing an increase in the influx of immigrants. Some skilled, some semi-skilled and some unskilled labors constitute the total population of immigrants in this country and strangely they all are able to find a job for themselves. It seems that the construction industry also has a healthy strength of immigrant workers. Since this industry does not need a lot of skilled labor, therefore it does well with semi-skilled workforce. The only criteria that the construction companies have for them is that they should be hard working and should give their 100% to the job.

Now how the construction companies benefit when they employ immigrants in their company. There is a scarcity of labor as many consider this part of the job to be perilous and hence you will find Americans holding the top position where their job is to give instruction to the laborers and also supervise their work. In case, things are not going as per the plan the supervisor will be taken to task. But it is not that the labor workforce is only occupied by the immigrants. You will also find Americans in this club. Usually construction companies are of the opinion that just hiring immigrants as workers can be a bit problematic as they want to give equal opportunity to all and therefore feel that it is healthy to have a mixture of employees constituting your workforce.

Immigrants are paid less as compared to their American counterparts:-

It has now become an open secret that the immigrants are paid less than what the companies had to pay to the Americans. This becomes highly cost effective for the company especially during times of turbulence. The construction market is not always flourishing and there are times when things take a bad shape for the overall sector. This is when the construction companies continue doing business by paying less to the immigrants. Having said so, this does not imply that they exploit them to the core. They are provided with all the other facilities that are given to the resident but are cut short on the wages part. The company in this way is able to save a lot for the hard times.

Immigrants are ready to work beyond the working hours:-

Not every person in the United States readily works beyond his working hours. Though they are paid extra for working after their shift, people are still reluctant to do so. However, the immigrants in this case are more than happy to work and earn some extra money. They are probably without their families and are here with the sole purpose of earning more money. Anything earned in addition to the wages is an incentive. Though government has now made the visa rules quite stringent and construction companies are finding it hard to employ more immigrants. It needs to be seen how things will shape up after few years.

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Being in the company of good people is crucial in construction industry

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We generally meet all kinds of people when we are associated with an industry like construction. Generally people are tends to be good but some may not have that good intention. Hence, it is very crucial that you pick the people whom you feel that you can be compatible with. This does not mean that you will not have any relation with guys whom you feel does not fall in your compatibility zone. You will maintain your relationship with everyone but will restrict yourself to few people rather than getting open to everyone. If you make yourself available to everyone, there are chances that people might take undue advantage which will not be in anyway healthy for you. However, if you are in the company of people whom you trust, there are lesser chances that they will ever cheat on you.

Threat of losing project/client:-

If you get yourself in the company of wrong guys who may pose well to you, they might try to get info of your work and you never know when they will snatch away your project and start working on it. There have been numerous such cases where contractors have lost their project after they came into contact with someone they hardly knew and gave too much space to them. They on the other hand took as much info as they can to snatch away the project or just the client. They established their contact with the clients and ensured that the future projects are given to them. By the time the contractor came to know about this, he has already lost the client.

You will grow in the company of good people:-

Construction sector can often show you turbulent times. This being a dynamic industry, we can face any sort of threat from any corner. Therefore, it is important that you be in the company of people you know and whom you can trust. They might come for your help during your bad phase and bail you out. Alternatively, they can also give you valuable advice that you may hardly get from people in this circle. At times, this advice helps you a great deal. You might have taken a stand on the basis of certain information which may or may not be correct. However, you have a slight confusion on this and want to take a second opinion. Therefore, you decide to discuss it with your guys and you get to know more insights that you were complete unaware of. This eventually clears your thoughts and you are able to take a wise decision thus having a positive impact on your company.

Be in touch with them even if they are not your employees:-

We feel sad when we lose men who served our company for years and now want to retire. Even if they retire, they are very much a part of the company as they have served it for years. Therefore, being in touch with such people can always be beneficial for the company. They can guide you in difficult times and help you come out of a crooked situation.

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Placing a lien when you are already paid can be a serious problem

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There was a time when construction companies once having taken a project will complete the entire project on their own. They will not like the involvement of any other party in the work. However, the dynamics have changed completely. Now big construction companies only take up projects and let it to other construction companies who further sub-let it to small construction companies or contractors. So one big project is worked by many different companies and the main company who initially took the work has to ensure that all the parties involved in this work are paid in full because if either of the party is not paid then it can have serious repercussion on the project.

The parties who are unpaid can place a lien on the project which means that only when they are paid first that the owner of the project will be able to sell anything to anybody. It also means that the parties who are unpaid and have placed a lien are in a way the actual holders of the property. However, once they are paid in full they will withdraw their lien and then it becomes lien free. As a lien on a project can have serious impact on the project owner in the same fashion if someone has wrongfully placed a lien to harass the project owner, it can again have serious impact on the person for taking incorrect advantage of the lien. Contractors and sub-contractors are allowed to place lien so that they can safeguard their interest if they are not paid by the project owner. But this should not be in any way misused or else the entire purpose of having a mechanism like this goes for a toss.

The law in the United States is strict enough to weed out any menace like this. People who take place wrong liens are punished once they are proven guilty. However, an equal opportunity is given to both the project owner and the contractor to prove their point and if it is found that the project giver has paid in full but it was because of some kind of confusion the contractor did not receive the money and placed a lien, then the court tries to clear out the confusion and at times also gives the contractor a warning to check things first before placing a lien.

Ideally, a lien is supposed to be placed after a series of discussion between the project owner and the contractor and nothing has come out of it. One can’t just go and place a lien when things can be solved via discussion. Placing a lien should be the last option. Therefore, it is suggested that the contractor gives ample of time to the project owner to pay him for his work. If he places a lien without giving sufficient time, it may back-fire him. By no means should the contractor do anything that will place him into problems. If proven guilty he may end up paying good chunk of money as penalty and may also have to be behind bars for few months.

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