Category Archives: Industry

Take sound decisions if you are new to the construction industry

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When you are inexperienced you may not get it right the first time. You be into any profession, you need some amount of advice and guidance in order to learn things in a better way. Simultaneously, you are also unable to take the right decision when you do not know the difference between what is going to be beneficial for you and what will turn out to be a drastic debacle. It is quite important to first understand the subject properly before you get into it in order to take the right decisions in life. Your decisions will be quite circumstantial in nature. It will vary on the basis of the circumstance that you are in. One such industry is the construction industry where people find themselves in a tight spot over taking the right decision. The circumstance may be such that they will find it difficult to analyze which way to go.

Taking up of new projects is one such example where people do not know if they should be accepting the new project or wait for the existing ones to get over and then jump on to it. Ideally, when a construction business owner is given a new business, the giver expects him to get going with the work but the irony of the construction company is that he has to first wind up the existing work he has got in his hand and then only can deploy his resources for the next assignment. The other option is he can get more resources for the new project and start with the work but then once the work is completed in the next 2 years, he will have to do away with all his resources provided he has managed to get more work. But a construction company can’t perform on assumptions of events that may happen after a couple of years.

In this case, the company is in a dilemma if it should take it or leave it. Leaving the project will also have repercussion that the company has to face. It may be out of work for few months after the completion of the existing one and that is definitely not a good sign for any business. So situations like these can leave any construction company owner under stress and when it comes to a new company, one can only imagine how difficult it will be for him to take the right call.

Now when it comes to taking right decision, you need help from others and that others have to be an expert in the same domain. A new guy in the construction industry may have a mentor who is a guiding force for him. He should reach out to him for advices. He may get something phenomenal from his mentor which will help him to take control of the situation and eventually take the right decision for the company. The difference between making money and losing everything is nothing but taking sound and unsound decisions.

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Competition in heavy equipment industry

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Today the heavy equipment industry is in great demand due to the huge growth in urban population and infrastructure projects. Heavy construction equipment is a critical tool for any construction project since they reduce the labor cost and time. A variety of these are present in market to serve different purposes of heavy construction work. Although all may not be required, it is imperative for the owner/builder to buy a sizeable amount of these equipment to ensure that work proceeds smoothly.

 

The existing heavy construction equipment market is dominated by large firms such as Caterpillar Inc. (U.S.), CNH Global N.V. (The Netherlands), Hyundai Heavy Industries Co., Ltd. (South Korea), Volvo Construction Equipment AB (Sweden), JCB Ltd. (U.K.), Komatsu Ltd. (Japan), Deere & Company (U.S). These companies provide advanced heavy construction equipment and by gaining considerable expertise and experience over the years, they have optimized their processes and practices to become even more efficient. These key players use different strategies such as expansions, agreements, contracts, joint ventures and partnerships to garner share in the market. They also focus more on the emerging markets in developing countries with inclination towards industrial growth. They also rely on regional and local distributors to increase their profits and presence in geographical markets. They also acquire companies or other business to meet the demands of heavy construction equipment.

 

There are challenges faced by these key players too. There is demand for machines which are highly efficient, safe, and reliable, with highest productivity and lowest environmental impact. Further, if fitted with the latest technology which is user friendly and with numerous applications it becomes more popular among users. In addition, there are changes in the heavy equipment industry due to advent of big data, analytics and advanced technology. Some new entrants in the market produce complex products using big data analytics which are cost effective, hence are in demand. Further competitive business analytics allows new analytics to assist in pricing, budgeting, improving management of demand and supply, minimize costs and risks and maximize profits. This has lead to a tough competition within the heavy equipment industry. Industries which are not interested in being tech-savvy will find themselves difficult to survive in such a competitive market.

 

To retain the position of a being a key player in heavy equipment industry, one has to have key strategies such as:

  1. Product and technology: Top priority of many key players is innovation of their products. Hence, they invest more in research and development activities.
  1. Improvement in operations: global expansion increases level of complexity which makes it important to improve basic capabilities and processes.
  2. A Go market Approach: to expand operations and business in the developed countries.
  3. In addition they should have winning strategies and should be prepared for the new changes in market. Although there is competition in heavy equipment industry, yet the companies which will have right business strategies, innovative products and can adapt to changing markets will survive and grow to make huge profits.
  4.  In addition they should have winning strategies and should be prepared for the new changes in market.Although there is competition in heavy equipment industry, yet the companies which will have right business strategies, innovative products and can adapt to changing markets will survive and grow to make huge profits.

Servicing of heavy equipment can become quite a profitable business

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After having bought heavy equipment, we experience the real problem when we see the need to service the machine. Though the user manual also speaks about how you should maintain your machine to lengthen its life but getting the equipment regularly serviced by a mechanic is also very crucial. It has been lately found that people possessing heavy equipment see dire need of guys who can also service their machines. Heavy equipment manufacturing companies also have their servicing department but many of the times they are full with work and one has to wait for days and even months to get their equipment serviced. Getting good mechanics has become a big problem.

Construction companies big or small are in dire need of servicing stations that are reachable and can send their mechanics to service the machine without much delay. It is understood that mechanics will always be engaged with enough work to keep them occupied for days but they expect the servicing company to have surplus men who can be sent across to service the machine. Therefore people who are intending to open up such a kind of business can be assured that they will end up making good profits in this business. It can get you a lot of clients who are ready to pay you good money for your service.

Few important things are needed before you start the business of servicing heavy equipment.

Installing right infrastructure for the business:-

When you are thinking of starting up a service center, you got to be sure that you have the infrastructure in place. Servicing of heavy equipment is a task of huge responsibility and it also requires machines that do the work for you. It is pretty obvious that you can’t use your hand to clean the dirt that has been set in the interiors of the machine. For that you may need a water spray that will flush out the dirt from the system. In the same manner, you need other equipment for different kinds of work. So you need to ensure that you have the set of equipment ready before you start advertising about your business to others.

Having the right set of men to do the job:-

Having men who know their job is a very crucial point in this business. Before you start up the business, you need to have people who are good with servicing heavy equipment. You need guys who have worked as mechanics and have repaired different types of heavy equipment. Alternatively, they should also be aware of the places from where you can get heavy equipment parts because you may get machines whose parts needs to be replaced. So you buy the parts from that place in bulk and charge the customer as per the market price. So people who are experienced in servicing machines are the type you need for your business.

You also need to make sure that you pay your men real well so that they stick with you and do not move away to some other company just because they are offered more there.

 

What heavy equipment salesman could teach other salesman in different industry

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Selling products of any brand can be difficult irrespective of how famous the brand is. The work of the salesman is to highlight the feature that matches with the requirement of the client and has to win his confidence that the product will last for long. Once the client is convinced with the quality of the product and how economically viable it is for him, he will go for it. But in the entire process of selling, every salesman gets to learn a lot of things out of every successful as well as unsuccessful sale. A salesman selling heavy equipment can teach a lot of things to salesman belonging to other industries. His selling techniques will be far more polished as he indulges in selling equipment that are quite expensive and people will buy those machines only if they see a dire need for it.

Intelligent selling:-

Selling is in itself an art but intelligent selling is a kind of a superior art which not many are able to master. Heavy equipment seller during his journey of selling different kinds of earth moving equipment has to choose their words carefully. They unlike salesman of different industry can’t keep on speaking to convince the client. Since they are dealing with a far more technical subject, speaking anything that is incorrect can back-fire them and they may lose the sale. Therefore they have to opt for intelligent selling where they are required to do a bit of research on the kind of work the client is into. He can pitch in his product as per the requirement of the client. This teaches salesman of other industry to follow the same pattern. Selling something just because you are given to sell it should not be your sole idea. Understanding the clients need should be the core focus area and then putting your products with his needs should be the next plan of action. If you are able to do that, selling becomes easy.

Do not be greedy after commissions:-

Salesman should not run after money. Though it means a lot to everybody but selling products that can earn them good commission should not be given preference. They can also earn commission by selling products that suit the needs of the client. Heavy equipment salesmen are required to develop a good rapport with their client and if they sell a machine with the intention of earning high commission, they may soon lose out on the client. This teaches others to follow suit and concentrate on developing a relationship with the client which will enable them to sell more products in the future and also get references of other clients.

Learn your product well before you start selling it:-

Heavy equipment salesmen are required to know their product in an out. They may not be able to capture the technicalities of the heavy equipment but are recommended to know as much as they can. This will help them to counter client’s tough questions and also win their confidence. Salesman of other industry should be open to learn as many things as they can about their product. This will help them to crack tough clients.

Modernization of heavy equipment has changed the dynamics of the construction industry

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With the advent of new technology, we also see the face of the relevant industry changing. It is pretty obvious that with new technology coming in, the method adopted by people towards their work is bound to change, which therefore impacts the overall performance of the industry. The arrival of new technology brings in a change in the attitude of people towards their work. They probably become more energetic and their aspirations rise manifolds. Though it brings in lot of positivity but there is also a fair chance of experiencing the negative side of it.

In the last few decades, the construction industry as a whole has seen a number of changes with the arrival of new technologies in this sector. Initially, there were hardly any sky touching buildings but now everybody seems to have an office in one such tall rises. This means the demand of constructing huge buildings is rising on an increasing trend and construction companies on the other hand demand for heavy equipment that are more technologically sound and highly effective in every manner. Be it building big bridges or creating an entire city under water, all seems to be possible with the help of technological advancements.

Owners of advanced technology heavy equipment get more projects:-

When you are about to give business to somebody, you will definitely check his credentials and the tools he has to complete your work. In the same fashion, when a client hunts for a construction company to complete a project, they ideally see what kind of heavy equipment does the company procures and how technologically sound are those equipment. They will be reluctant to give work to a company that lacks heavy equipment of latest technology and will look for bidders who has the potential to complete the work on time and if possible before time.

Entire township can be built in a span of few years:-

If we look back a couple of decades ago, building a township for residential purpose was very difficult as one had to construct large number of buildings in a large plot of land. This undeniably will take lot of time for the construction company to complete the work and give possession to the people who have booked the flats. Such projects may take more than 5 years to complete and if there occurs any issue with the title of the land then there are high chances that the entire work is halted for unknown period of time. These problems are quite rare these days. Firstly, it doesn’t take this long for a big construction company to construct a township and other than this they start working on the land only when the title on the property does not have any lien attached to it.

They use the latest machineries to plan the project and execute them. They understand that any delay will only cost them money and therefore they make use of advanced heavy equipment to complete the project as soon as they can.

Having a clear vision will augment your growth in the construction sector

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The simple formula of a successful career is to stay focused with your work and the determination to remain focused comes from where you want to see yourself in the next few years. Your vision for yourself and for your company matters the most when you are in the mode of accelerating. Many big companies all around the world have stated their visions for others to know what they want to be. Similarly, you should also have a vision in life when it comes to your business and work hard every day to achieve it or at least come a bit near to get it. It certainly helps you to grow your business and keeps you little aggressive while taking business decisions. You may analyze your risks well before taking the final call but a person without any vision for his business might always fear to take risks however calculated it might be.

Speaking about the construction domain, the sector particularly respects and rewards those who have an aim in their life and who want to do something big. Expansion of business is one of them. Constructing tall buildings or building something phenomenal is the need of the construction sector. There are many who are a part of this business but they have small dreams and never try to do anything big. They are content with what they are doing. They may experience hardship particularly when the overall industry is going through a bad phase. However the ones who have moved with a vision for their business will surpass the bad phase. They are also the ones who take control of the situation and never let things go out of their hands. So it is people who are visionaries are able to stay afloat and why is why you will see so many big construction companies are in this business for the last many years. Some even exist for centuries if not less.

What keeps you standing in difficult times is nothing but your will to survive. Others simply give it up when they see turbulent times coming their way. The difference in the attitude of standing firm and giving up is what defines the vision of an individual and overall the vision of the company. Moreover, the one with a vision will want to reach at a point and once they are there, they do their ground work for their next journey. This means that there is eventually no stopping for them. They continue their travel as long as they feel they can go and then they pass on the responsibility to someone they feel share the same vision that they do. So ultimately it is all about where one wants to see the company to go and how dedicated he is to achieve what he wants to.

Though construction industry is a rewarding business but it only rewards people who have the mettle to perform and have also kept an aim in their life.

Stand out in the crowd in the Construction Business

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You be in whatever form of business, you would always expect yourself to do something different that will set you aside from the rest of the crowd. Being with the crowd will get you success but you may probably not have the satisfaction from your business which is more important if you are the one who has taken the pain to establish it in the first place. If you get no satisfaction from what you do, it is better that you stop doing that and start working with something that makes you feel important in your eyes. Running a construction business like all others do might become a bit monotonous and if you want to make a difference in this industry then all you need is to see yourself standing out from the crowd. This does not imply that you do not belong to the group. It is just that you think differently than the rest of the folks and that is what is needed to achieve success in this form of an industry.

Be as innovative as you can:-

Innovation is the key to success in any business. You have to keep yourself busy in thinking when you are not doing anything. Remember, not doing anything does not mean you are doing nothing. You can think on what more you can do to make things work for you. Try to foresee situations and take necessary measures to tackle them right from the beginning. Think of something creative that you can apply in your business and that nobody else have thought about or have ever dared to do. Innovation is all about trying new things out that others may find it to be little risky or may feel that it is not going to make a difference. If you feel that it is going to work for you, you should take the leap. You may come across people who will try to intimidate you by showing the negative sides of your idea but you know your idea better than anybody else does and you should ensure that you put it across to bring a difference in your business.

Be ethical and honest to your client:-

Honesty has now become a virtue. Not everybody has it and only few good men hold their heads high because they know that they have been honest all their lives. Maintain certain ethics and values for your company and ensure that everybody follows them right from the core of their hearts. This actually sends a message to your as well as other clients about your way of working. They indeed want to work with people who are honest with their work and maintain certain standard at all levels. At times, you may have to pay the price for being honest but that will be too less as compared to guys who aren’t with their work or with their clients. Slowly and steadily, you will see yourself acquiring more businesses just because you chose to be ethical.

 

Guidance is required in every step in the construction industry

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A person who is new to the construction world or has been a part of it for the last many years needs guidance at crucial juncture. It is somewhat dangerous for the future of any company when the boss starts taking every decision without even keeping the employees in loop. It is always possible that the decision he takes can backfire and if that does it can jeopardize the future of the company. Such kind of actions can pose a serious threat to the very existence of the company. It is therefore a must for any foresighted business owner to talk with his people about a scenario and check their thoughts on the subject. He might come across a lot of new ideas that he must have never envisaged. It actually opens the door for something new and the collective decision have more probabilities to succeed.

It becomes instrumental to understand whom should we take advices from. Taking suggestion from anybody will only land you into troubled waters. If it consists anything that needs people from the legal team to get involved, you need to connect to the legal department of your company and seek advice from them. If yours is a small company and you do not have any legal team working for you then you can seek advice from an attorney who has experience in advising on matters like these. It will be your job to identify the right person from whom you can expect valuable advices.

In a construction industry, the two departments where you require expert advice are legal and procurement of heavy equipment. Though you may understand which heavy equipment is required for what kind of work, you may still need some guidance from the experts. There is a possibility that you are not updated with the recent happenings in the heavy equipment industry and therefore there are chances that you may end up taking some incorrect decisions. This is why it makes ample sense to have a separate team who handles the heavy equipment part completely. Right from guiding you which machine is needed for what purpose to maintaining it, you can give the entire responsibility of machines to them.

Now comes taking some critical decisions in your business. Ideally, any sane businessman will never take a decision without consulting the head of different departments. He has to take everybody into confidence before he take a decision. For instance, there is a bridge building project and many are eying to get the contract. However there are some hassles that one needs to understand and after calculating the pros and cons one can come down to a concrete conclusion. In order to come to that conclusion, he needs to get advices from all the head honchos and only after summing it up he can finally put it across on the transaction table.

Some experienced men who have encountered a similar situation in the past will share their experience and will also caution you of any shortcomings. This is how their advices will push you towards success or save you from an evident disaster.

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Acquiring a construction business is always a viable option

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When you are looking to expand your business, the most viable option that you have in your hand is to buy someone else’s business and manage his clients. This helps you to get some readymade clients, resources and all the other necessary equipment that are required in this industry. But the hard part is to get a company that is ready to sell its stake to you. No one will ever want to sell a business that is making profits. It just does not make any sense to him to give it off to someone else so that he can make money on your hard work. Simultaneously, you will not be interested in taking companies that are running into losses. They may turn out to be a liability on your company.

Moreover, you have to spend more of your time focusing on the sick unit and getting it back from the scratch. It is sometimes not worth of your time and energy and to a larger extent your hard money earned. So how can one get hold of a company who wants to sell their business to a bigger company is something that we will talk in detail.

Talking about the construction industry, acquisition does happen in this industry and also at a slightly higher rate as compared to other industries. Here you will come across many contractors who have tried their luck but due to market fallouts are unable to sustain. Such small scaled companies may not be called as sick units as they are just out of business and not that they are incompetent workers. They can bounce back anytime and can take it from there. So if ever you get the opportunity to buy such a company that is run by a contractor who is now not willing to continue the business, you can pay him the amount and acquire his business. It means that you are now the owner of his resources and you decide the salary of the employees of his company.

In case of acquisition of a construction business, you not only get the resources at a lower price but also get experienced and competent workforce which can be utilized in different jobsites. You may wish to pay them a bit more so that they can be content with how things are moving. Remember, if you hire new workforce from out, you have pay them more for their services but in case of acquisition, you play safe and do not have to increase the package of the existing workforce.

You can get hold of a broker who has news about small sized construction companies and contractors. They will check and let you know if anyone is looking for selling their unit. You also need to do your homework well. Check the reason why the company is ready to sell its stakes. Is it because they can no longer afford the operational expenses or they have some other reason that you should know before you go for the deal. Check the history of the company before you finalize anything and only if you see no hurdle that you should be signing on the dotted line.

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Have sound financial reserves to meet unforeseen challenges

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When you are rich, do not spend lavishly because you never know when you may need that money the most. Life is full of unforeseen happenings and this is why it is prudent to keep some control over your spending before things go completely out of hand and you remorse for things that you could have easily contained. People belonging from the construction industry have to be very careful with handling their finances. They can’t spend copiously in buying things for their business without even having the need for it. This may result to some serious problems in the future. Construction business is very dynamic in nature and things that are happening now may not happen in the very next moment. Which is why you should always maintain some amount as contingency fund as you do not know when you may require the money.

We will be discussing few important points that will highlight why having sound financial reserves is necessary to meet unforeseen challenges.

Getting new projects out of the blue:- 

At times, you may have experienced someone taking the reference of one of your clients and giving business to you. Well you must have never expected that business to come but it did arrive out of the blue. Now, if you say that you do not have enough resources to take up that job, you are simply not doing justice to your business. Getting new clients is always good for the business and especially when he comes to you as a reference of your existing client. Saying no to him will not only impact your business with a prospect but also will strain your relationship with your existing client. Henceforth, he may not give any business to you considering that you do not have the potential to take up new challenges.

Considering the same situation, if you keep yourself ready for such unforeseen opportunities, it will certainly help you nurture as a business owner and will also boost your business in a grand way. Therefore keep enough money to procure heavy equipments and employ new workers to work on the addition site.

Financial reserves can help you sustain during hard times:-

Construction business can show you both good as well as bad phases many times during your active career as a construction business owner. It has been widely observed that most of the companies go sick when the bad phase hits them. At times, it hits too hard for them to sustain further leading to unwanted closure of business. When you are down with projects and do not have much work in hand, you can cut down your costs. That will save a bit but you still have to carry on to survive and for that you require money. Having sound financial reserves helps you big time during such moment of crisis.

You can depend on your savings and can pull things on for few more months. Till then you may see the tide moving back and businesses pouring in. Your savings have thus saved your business.