Category Archives: Industry

Knowing the nitty gritty of construction business is super crucial

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Before you try putting your hands into any kind of business you need to first have at least some basic knowledge about the trade. Only if you learn the trade well that you will be able to do it well and also taste success or else it will be an utter debacle. You will only experience losing all that you have, right from money to people and eventually your business. So keep your facts straight and give stress to learn the business well before you really pump your energy time and money into it. The people who will be associated with your business will look how confident you are and your confidence will come up with the kind of knowledge you possess. If you do not know much about your business, it will certainly reflect on your persona and that is going to be really bad.

Speaking about the construction industry, it will just not let you run the business if you have very little or absolutely no knowledge on how to function. There is high level competition in this business and more people are getting in into the rat race. So in order to outsmart them, you got to be a bit smarter first. Therefore, it is recommended that you work with some construction company for the first few years so that you understand the nitty gritty of the business. It takes time to learn something new and therefore you got to stick with the company for few years and not months. Check how to behave with the laborers, what compensation you are supposed to pay them, how things are coordinated and how people are hired. You also need to understand a bit of managerial and admin part where you learn the work of managers and know what they do to manage things so that it all moves so smoothly.

Knowing the work of admin will help you understand how the payroll things work. You do not have to know everything in detail. Just the basic understanding will do. You learn these things and can incorporate it in your business. Ideally big construction companies have people who advices the owners on these things. You may also need advices when you reach to that position but in order to understand their suggestions, you need to know what they are talking about. So knowing these things becomes crucial. Another important area that you need to touch is the procurement of heavy equipment and other raw materials. Also knowing where to dump the debris is crucial.

If you know someone who owns a construction business, you can start working with him to learn things. So work with him for few years and gain as much knowledge as you can and once you feel that you are confident enough to start a business of your own, you should take the initiative and give it a shot. You will get to know more things once you head up for your own business and may find the journey interesting and joyful.

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Cost cutting measure is important in construction business

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Every industry has its share of good and bad days. So when they are enjoying their good days it is crucial that they keep enough reserves for any possible decline in their business and when they encounter any fall then they should be quick to adopt cost cutting measure. It is been widely observed that companies take time to adopt cost cutting measures due to which they get themselves into deeper mess and eventually some has to wind up their businesses.

Cost cutting measures do not primarily involve sacking employees though that is considered as one of the measures but that should be the last option. By sacking employees, you will be losing resources that have been with your company for many years and who know the business well. When the tide will turn, you again have to recruit new guys and train them. You may not get back the same human resources that you had sacked once. So keep that as your last option.

Bring down unnecessary expenses:-

You got to track down the overall operating and non-operating expenses in your company and have to cut down the costs that you feel is completely unnecessary. If you check your records, you will come across a lot of such expenses that should not have been done in the first place. Since you never bother to check the records, it must have occurred but this is what you need to curtail. You need to cut down all the expenses that are either not needed or not much needed by the company. Only spend the money on important things and things that are absolutely necessary for the smooth running of the business.

Rent out or sell heavy equipment that are redundant for your business:-

If you take a day’s time and check which all heavy equipment are indeed functioning, you may be surprised to know that out of the entire lot of heavy equipment you possess, you use only half the machines for your projects. Rest of the machines are not working but you still spend a good deal of money on maintaining them. That is again costing your business. Hence, it is important that you take stock of the heavy equipment that are not in use and may remain out of use of many more months so that they can be rented out to guys who need them. In case, if the machines have gone redundant, then it is advisable that you get rid of them. In this way, you will make some money for your business.

Sack employees if you really have to:-

Well, this should be the last option in your kitty. You can do this only if you feel that this is the only step you have to save your company from getting wrapped up. However, you have to take immense care before you lay off your employees. It is important that you remove people who are not good workers and often have been a pain to the company. Check their performance sheet and then take a calculated decision. Remember, once you lose them there are not much chance to get them back.

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Not losing focus is the key in construction industry

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To grow in any form of industry one needs to remain focused throughout the time he is in the business. He can’t afford to allow his thoughts to wander in some other direction or simply get distracted by something else. Any sort of distraction can turn out to be quite fatal for the company. For an industry like construction where there is cut throat competition throughout the spectrum, one can’t let his attention get diverted to anything other than his business. No wonder that there are other things than business that one needs to take care of in their daily lives. But any personal problem should not act as a barrier towards the growth of your company. There are examples of people becoming rich by being focused and disciplined and also examples of people who lost everything because they could not manage their personal as well as their professional lives.

Helps you to take the right decision:-

In the construction business, whatever decision that you take should turn out to be the right one because if it goes wrong, it can have a lasting effect on the company that you hold. Guys who are not focused tend to make series of errors while taking decisions and it ultimately results in incurring severe loses and even winding up their business. If you are completely attentive to what is happening in your business and the external forces that is affecting the industry as a whole, you will know what should be your next move rather than just letting things to happen. It means that you are in control of your position and are leading from the front. This also boosts the morale of your investors as they feel that you are the guy with a vision and can’t get easily diverted.

Updates your knowledge:-

You always need to keep yourself abreast with the latest updates that are pertaining to your industry. The kind of volatility that is engaged with the construction industry makes it mandatory for you to have all the updates with you. You can keep the necessary information on your laptop for reviewing your business plans that is so strongly dependent on the external market forces. Being focus will draw you closer towards achieving your business plans which is possible only when you have correct updates about the industry.

Make rapid changes in your business plan:-

When you are dealing in a volatile environment where things can go wrong in any minute, being attentive always helps. For instance, you took a decision and on the basis of it things are progressing. However, all of a sudden you get to know that due to some unforeseen reasons you have to revamp your business plans. If you are not focused enough, you will probably not even come to know about any such changes and you may continue with the same old plan. Since you remain absorbed in your work, you were able to pick the odd at the right time and could revamp your plan. Focus has become key to run any successful business.

Expanding construction business by ignoring your finances should be avoided

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After you have started your business, the next thing that runs in your mind is how you can expand it and what are the things needed to expand your business. However, with every expansion of business there also comes certain amount of risk that one needs to consider before they go ahead with their plans. It has been witnessed that people who are too quick in expanding their business are also prone to fall sooner. The reasons could be many but one very basic reason is that they skip the most important aspect and that is their financial stability.

Switching the focus to the construction domain, this industry is all the more volatile and it keeps on fluctuating once or twice every year. In this situation, it is very tough to foresee things and estimate anything accurately. People may tend to may numerous mistakes if they take the chance of estimating the market position and may fall flat on their faces. Moving steady may be the key but something that is more important is to know the reserves you have and if it is sufficient for the expansion plans that you have planned.

Expanding the construction business implies that you have to shell out good sum of money to acquire heavy equipment which is perhaps the most expensive item in your list. Other will be paying salary to the additional employees that you have to hire and taking care of all the other operating and non-operating expenses that usually happen in a business of this kind. So before you give a go to your plans, it is quite imperative to sit down and share a thought with your peers letting them know about your plans and chances that you have to take in order to materialize your plans.

Having a word with others on this subject will be very beneficial for you as you will come across many thoughts and ideas that did not strike your mind while you had to go through the thinking process. You can also get some real valuable advices from them that may change your plan a bit for good. Nevertheless, you will understand few intricacies that you probably missed and will work things out in your favor.

Discussing about the company’s finances with the financial department will also be beneficial for you as they will be in a better position to advice you on the current financial position of the company and if the company is ready to take any such risk which if does not work can prove to be quite drastic. You can ask them to prepare a report of the financial standing of the company and that will help you to have a bird’s view on where your company is standing.

It is only after you have gone through all these rigorous deliberations and consultations from the employees of various departments that you should take the final decision of investing in more money in your business or should wait for some more time.

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Construction business is all about accepting new challenges

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You be in any form of business, you will always be exposed to new challenges; at times from inside your company and most of the time from outside. It is very important that you know how to tackle those challenges and come out with flying colors. Every challenge brings 2 things along with it. One is an opportunity to do something really outstanding and the other is a calamity that has the ability to end your business forever. It is up to you how you take it up and work things to turn the challenge in your favor and turn it into an opportunity.

Construction industry is one of the many industries that have lot of thrills in it. It may give shivers to you but if you stand firm during the crisis, it will also reward you. Many people have taken their business from rags to riches and there are few who have stumbled badly and have fallen flat on their faces. People who were able to make it were go-getter and were not afraid of taking calculated risks. In other words, they took challenges as opportunities and made sure that they overcome all difficulties and shine like a star.

Few crucial things that one must keep in mind which will be helpful to accept challenges in the construction business.

Have a concrete strategy in place:-

In order to accept challenges, one must be ready for them in the first place. Laying down concrete strategy and working on them can help you in many ways to face any challenge in your business. You should be ready with a “Plan B”. Problems will come without giving a knock at your door but you will be able to surpass them only if you can foresee them and lay an appropriate plan to counter them. While you put up a strategy, take into consideration the minutest of things. You never know the stuff you leave turns out to be the most crucial part of your plan and things may go for a complete toss.

Try to have good rapport with your competitors:-

A wise man keeps his friends close but he keeps his enemies closer. Well, your competitors are not your enemies but you still got to maintain a good rapport with all of them. Not all competitors are bad and they understand that in order to survive in this business, they should remain united rather than tumbling by becoming an encumbrance for each other.

Try to maintain a strong financial standing:-

Challenges bring along a lot of pressure with it and no pressure is bigger than the thought of not able to face the challenge due to scarcity of finances. That will pinch you all throughout your life. Always ensure that your finances are in place and you have enough reserves to take care of any contingency. Be it buying some additional heavy equipment or deploying more workers for a new site, your financial requirements should be met at all times.

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Heavy equipment industry is fast catching up the rental market

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Heavy equipment companies may experience a hard time to sell their machines in the market. They might not find buyers at all times. Due to the cost of the machine which is invariably high, not many construction companies can afford to purchase them and at the same time the needs of the companies also change which means they have to keep on changing the heavy equipment as per their needs. Now it is certainly not feasible for a small construction house to keep buying machines as per the demand of the project. Therefore the best suitable option available to them is to rent the machine till the time they need them. Get done with their work and hand over the machine to its owner.

Though heavy equipment manufacturing companies do not directly deal with renting the equipment but there are entities that make good revenue by purchasing machines from the heavy equipment companies and then renting it out to the end users. Since they are dealing with new stuff, the rental amount one has to pay is comparatively higher than the ones given on rent by individuals. They may be slightly expensive but the quality of the equipment is unparalleled with any other machine listed by any individual.

On the other hand, the equipment possessed by these entities are thoroughly checked before it is listed on their website. So it means that when the guys who want the equipment on rent comes to get the machine, he can be completely assured that he will be taking the best with him. These entities are slowly catching up the heavy equipment rental market and they particularly believe that the year 2016 will be a great year for their business. It is primarily of two reasons. The first is the construction and mining industry are at its peak and it does not seem to come down at least in this year and the second reason is people want quality stuffs and they also need assurance which is provided to them by such entities.

It has been witnessed that people who take machines on rent have a hard time to convince its owners that the machine has developed some complication that was beyond his control and the giver of the machine penalizes him for the problem. This issue is somewhat managed if they take the machine from these small companies. Since these companies have their engineers who can work on the problem they do not fine the takers for anything and everything. This actually increases the confidence of the takers on these companies and they prefer to go with them. Moreover, they are also assured that these companies pick new machines either directly from the company or majorly from banks that confiscate heavy equipment over non- payment of installments.

These companies have quite easily won over the hearts of the contractors and small construction houses and have found a good opportunity to make decent income.

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Fuel price affecting the construction industry

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For the last few years, we are seeing a decrease in the oil price across the globe. The price of crude oil that was $129 a barrel has now fallen down to less than $50.00. This is a quite a fall and it has affected the economies of many developing and developed countries. However, there are very few countries whose economy has not been affected by this reduction. Any rise or fall in the price of fuel has a huge impact on the heavy equipment and construction industry and as per the current scenario where the prices have dipped sharply it has left a huge impact on the construction sector. If we assume that the cost of construction will fall with the fall in the oil price, it may not always be the case. On the contrary we also see an increase in the price of finished products. However, the chances are more for the price to go down.

Fuel price plays a significant role in lowering the price of transporting raw materials and other items that are necessary for the construction business. Also the fuel required in heavy equipment will cost the company less which means that the company can now utilize the funds for some other purpose or can just keep it as reserves so that whenever it needs to take any strong financial decision, it can do so and utilize the reserves. Even the industries that are associated with the construction sector benefits a lot when the fuel price is down.

Market experts are of the opinion that the fuel prices that are currently at its bottom will soon pick up and then the picture of the construction industry will differ from what it is for the time being. As of now, it is hurting the oil and gas exploration and production companies but is benefitting the rest but as soon as it starts to increase, they will start benefitting and the construction sector might have to face the heat. Countries that import oil while the prices are down experiences good profits but as soon as the price goes up, they feel the pinch. They then have to import oil at higher price. As a result of this, the construction sector at that time takes a hit. They can’t afford to sell the end product at a lesser price.

Countries like Saudi Arabia, Kuwait and other Gulf countries that extracts oil and are also the major exporter do not experience any crunch when the prices are high. They in fact find it to be convenient to them. They can sell the fuel at an increased price to the rest of the world. The construction industry in these countries also makes good deal of profit as the fuel prices are mostly less. In case it incurs any loss, it has to do with factors other than the fuel price. Low fuel price has come as a boon to many small construction companies who have just started their business few years ago. They are now able to spend less on fuel and can utilize the money to attain business accomplishments.

Joint Checks with Heavy Equipment Rental House and Construction Companies

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Construction companies are often of the opinion of taking heavy equipment on rent rather than buying them as it may prove to be very expensive for them. However, they also find it difficult to gather information of people who are willing to rent their machines. They may do a search on internet but the results are not always encouraging. Most of the times, they do not get what they are been searching for. It is quite obvious to not get the machine they want as the guys who want to rent their machine do not know what the other party wants.

They just put up the ad based on what they have and this what makes things difficult. The taker needs are not necessarily met by searching for machines over the net and therefore they need someone to help them meet their requirements. This is where a heavy equipment rental house comes into play. They are the ones who act as a bridge between the giver and the taker and they do this quite successfully. The modus operandi is pretty simple. Since both the parties know about the existence of a rental house, they turn up to them and give them their requirements. The giver’s requirement is usually the rental amount that needs to coincide with the comfort level of the taker.

If the taker feels that the rental amount is well within the budget of the company, then he asks the rental house to show the machines. The rental house in turn contacts the giver and asks him to come down with the machine or arranges a meeting of both the parties in his office or at a place that is convenient to both the parties. The taker can then inspect the machine and if he finds everything satisfactory, then he goes for the deal and just in case if he does not find the machine worth for his project, he lets the rental house owner knows about it.

In the entire process, one thing that is very crucial is that both the heavy equipment rental house and the construction companies should stay in close contact with each other as there may be always a need to procure machines on rent or give it on rent. Either ways, being in close contact will help both the parties know the requirements and what the rental house can offer. There have been scenarios where the big construction companies could not get good machines as they were rented out to some other small companies. This mainly happened due to lack of joint checks between the heavy equipment rental house and the construction companies.

The party who wants to rent out their machine should also stay in close contact with the heavy equipment rental house as it will be easier for them to rent their machines quickly. They can just walk in to their office and check if there is any party who is interested in taking a particular machine on rent. If they find a taker, the transaction can happen quickly.

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Construction business is a dynamic business – Do not take decisions alone

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Whenever you are about to take an important decision in your life, it is prudent that you have a talk with your near and dear ones or the ones whom you trust that they can help you cross the challenge with their expert advice and then take your decision. If you skip taking any advices from people, it may so happen that you start doing something without knowing much about it and end up endangering your life or career. That was about life and so it is with your business and especially when you are dealing with a dynamic business like construction, you got to be all the more cautious about what you are doing. Any incorrect step can prove very costly to you and also to the people who are connected to you with your business. Construction business is quite dynamic in nature:- If you have set your foot in the construction domain, you have probably entered into one of the most dynamic industry of today’s time which is dominated by players who are pretty old in this business. They are also the one who has a bit of hold in the construction market and can change things to their convenience. Having said this, it does not imply that they can play around with things as per their whims and fancies. That is never the case and will also not be feasible in the future. The construction sector is influenced by large number of factors and the big players are just one small factor. Other than that, you got to be cautious about other factors as well that has the potential of causing enough harm to your business if ignored. Expert advices are needed in every stream also in construction domain:- You may have spent quite a good number of years in the construction business, yet you may find yourself in a situation where you may need advice from people. It is not that you do not know the way out but it is just that you are tensed then and may not be able to pick the right way out. Therefore, you may need some consultative talks from your peers and people you know in this industry from a long time. They should be the right guys who can give you appropriate suggestions and may get you out of a mess. Taking decision along can be harmful. Take people along:- When you are taking important business decisions, it is very important that you do not skip the presence of other people working in your company. They are the ones who can come down with valuable advices, something that you may have never thought about and after hearing them you may just wonder “how can I skip this?”. Well, a single head may not be sufficient to take all the load of a business and therefore it is better if you can share the load with other trusted people in your company. That will set things right for you.

Low diesel prices helping the construction industry

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Construction industry is largely dependent on heavy equipment and one the most important factor that contributes to the profit making of this industry is the low diesel prices. If heavy equipments will consume fuel that is sold at a lesser price, the construction company as a whole will be in a position of making real high profits. The price of diesel plays a major role in giving a good shape to a construction or for that matter any industry that uses heavy equipment to a larger extent. Many companies are still in the process of acquiring heavy equipment that are reliable, competent in working for long hours and also that consumes less fuel and is more productive.

So when we have machines that are designed to consume less fuel and be high on productivity, it will be an incentive to have fuel at lower prices. Companies that possess such machines can experience high profits year after year. However, the crux of the matter is that diesel prices do not remain same all the year. It tends to fluctuate quite many times in a given year and that is what comes into play and cut down the profit percentage. As long as the diesel prices are in check, things are in control and all are in a merry state of mind but once the price starts soaring, construction owners’ starts getting cold on their feet. Thus it is proven that the construction companies are at their best when the prices of diesel are low.

Boon for small construction companies:-

When the diesel prices are low, it is almost a sort of boon for the small construction companies. They can’t wish for anything more. The problem that many small construction companies experience is that they can’t afford to buy heavy equipment that consumes less fuel and is high on productivity. Such type of machines are extremely expensive and often out of their budget. Therefore they have to do with construction equipment that are either used ones or not that advanced and such type of machines tends to consumes more fuel. In a situation in this, they can’t wish for anything more than to see the diesel prices at the bottom.

Eco-friendly machines are way too expensive:-

Heavy equipment manufacturing companies are also producing machines that are eco-friendly. They call them green machines. They emit low intoxicants as compared to diesel run machines. The catch is such machines are very expensive. Since they are in their initial phase and also contribute largely towards the betterment of the environment, the manufacturing companies have decided to keep it at a higher range. Thus, such machines are not in the range of all the construction companies and only few giant companies can afford to have them. This means that the ones who can’t buy them have to work on machines that run on diesel and therefore they will find it very helpful to buy diesel at a lower price.