Tag Archives: Construction Business

Construction business is all about meeting deadlines

Podcast: Play in new window | Download | Embed

Subscribe: Apple Podcasts | RSS

Construction involves constructing of a building or an infrastructure. It requires collaboration across various multiple disciplines. It comprises different types of professionals such as an architect, construction manager, design manager and a project manager and each of them with their team members. It involves huge financial investment. It is risky but lucrative business. Effective planning allows successful execution of a project. However the projects need to meet the deadlines to stay forefront in this business.

 

Any profession comes with a deadline, which is an external pressure to complete the task of making quality product within a given time period. The reason being the finance invested has to be ultimately regained in terms of profit. In case of the construction business, it is the completion of an infrastructure within a promised time. As ‘Time is Money’, sticking to the timeline of completing the project is the main responsibility of a construction company.

 

Some of the ways to meet deadlines

  1. Being realistic:

Being aware about magnitude of the construction project will give a true estimate of how much time and finance is required for its completion.

2.  Use of Technology:

Many construction companies use different construction management software programs that help keep projects on time and within budget. These programs allow companies in preconstruction planning, to organize a schedule, project budget, manage customer list and so forth. They are easily available in software form or are present in form of apps and can be easily downloaded. Thus, latest technology helps to manage the schedule of projects and complete them on time.

3.  Being foresighted:

Always scheduling the project on time is not easy. There can be many unforeseen developments that can delay the entire construction project such as the adverse weather conditions, delay in shipments, no labour force, contractor overshooting the schedule and more. Thus, project scheduling should be flexible so that construction owners do not lose clients.

4.  Selection of a right manufacturer/distributor for the product:

Developing a relationship with distributors who offer quality products (whether its heavy machinery, heavy equipment, construction material, electrical devices) with fast product distribution channels and easy installation can speed up the project. In addition choosing good quality and economical product is important. This will ensure to meet the deadlines of a project.

5.  Maintaining a Log of the work:

A log or keeping record of the problems faced on the construction site, when they were encountered and how they were resolved. This will be helpful to use these as reference to solve if similar problems arises in future on the same and other projects. This will save time and allow project completion on time.

6.  Selecting professionals and skilled labours and retaining them:

Having right type of skilled workforce will allow superior productivity. Sufficient training should be imparted to the newcomers so that become adept at the work. Having professional and serious workforce ensures completion of projects on time.

7.  Ensuring safety at workplace:

The owners should ensure safety at the site for the workers as well to the customers. This will minimize the accidents from taking place at the workplace and not waste time of the unit in attending to them.

 

The new and experienced entrepreneur’s should be aware of the business and strategies required to complete the projects on time which will make their customer base strong.

 

[ebayfeedsforwordpress feed=”” items=”1″]

Making of a construction company

Podcast: Play in new window | Download | Embed

Subscribe: Apple Podcasts | RSS

It may sound hard to begin a business when you do not have much experience on how to run it. It will in fact be quite difficult for you to sustain the initial few years and this is to be considered the most crucial period of any business setup. It is during this time that you experience too much of turbulence in your business and many people are compelled to shut their shops. But the one who are able to make it through these rough times are the one who are set to make history. The beginning of a construction business is no different and one has to go through the hardships which a person from some other industry goes through. However, what one needs to understand is till how long they have to experience the turbulence before finding the shore.  For this one needs to ensure that he has the right frame of mind and a sound financial backup that will help through his journey of setting up a mighty construction company.

Know how the industry functions:-

In order to run your business successfully, it is quite imperative to understand how the overall industry functions at ground level. Without knowing much about the industry, it will be futile to go any further with your business. It may lead to severe complications that may catch unaware. Things like how you can take a project, what prerequisites are required, the kind of expectation that one can set upon you and what you can do to fulfill those expectations are crucial. Running a construction business is not a easy one and involves lot of technicalities that the one who runs it should understand and also apply it well.

A bit of experience is always helpful:-

A person who knows how to deal with challenges and overcome them is the one who will find his place in the construction domain. Having little experience on how to run the business is crucial. It actually teaches you to deal with different types of situations in an effective manner without ruining your daily affairs. It also helps to learn to maintain good relation with your clients even when you have surrounded with different forms of challenges some thrown by the clients themselves. It is never easy to keep your clients satisfied as they always expect more from you. But to know the way to keep them content is an art that one can learn only through experience.

Have sound financial backing:-

This is perhaps one of the most important criteria one must consider. Every affair of your business in co-related to finance. You get projects keeping into deliberation the strong financial backing you have to complete the project on time. Your clients gives you work after they are satisfied that you have the resource to pay salary to your employees. You have to buy heavy equipments and that costs you a bomb. Therefore having a strong financial backup or some sort of reserve is imperative when you are about to begin a construction company.

[ebayfeedsforwordpress feed=”” items=”1″]

 

Take sound decisions if you are new to the construction industry

Podcast: Play in new window | Download | Embed

Subscribe: Apple Podcasts | RSS

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.

[ebayfeedsforwordpress feed=”” items=”2″]

Servicing of heavy equipment can become quite a profitable business

Podcast: Play in new window | Download | Embed

Subscribe: Apple Podcasts | RSS

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.

 

Construction industry is a rewarding sector. One must simply stick to it

Podcast: Play in new window | Download | Embed

Subscribe: Apple Podcasts | RSS

Not many industries can reward you with a great career and one of the industry that can really offer all that we desire is the construction sector. It can offer you with plenty of money, goodwill in the industry, job satisfaction and a career that can set you apart from others working in some other domain. There are many other industries that offers good sum of money but they lack job satisfaction. Some even lack a long lasting career but construction industry is perhaps the only industry that one can be a part of as long as he wants. So earning a lot of money, having a good reputation with your peers and being completely satisfied with your job sounds so merry but it takes a lot of pain to sustain in this industry as you do not get much help from people wanting to keep your business alive.

One has to go through tremendous pressure if he is new to this business. It is so obvious that people will not want to have much competition and therefore the new guy has to find his way on his own. He has to learn from his mistakes and then be careful to not to commit the same mistake all over again. We would be discussing what one should do to stick to the business despite of all the problems one has to encounter.

It should be your business every time in your mind:-

Handling a stiff competition where people are eying your business and are always ready to take it over if they find a slightest of chance is never an easy task. Your business got to be in your mind all the time. This actually gives a kind of impression on people how serious you are with your business and if you are the guy who will be able to take the business to the next level. People who are completely focused with their work are liked by others and then you may find guys who will come to you with good advices. You may start getting guys who would want to work with you and be a part of a growing company that seeks no height as unachievable. Having constant focus on your business will give you the strength and capacity to fight back your competitors and will also help you to get businesses from new clients.

A good strategy is all you need to keep the business running:-

Having a good strategy in place will work as a roadmap for you. You only need to follow the plan and check if you are able to attain what you have planned on a regular basis. Just having a sound strategy may not be the only thing you need to be in the business but knowing how far you have been able to attain stuffs you have planned is of huge importance.  You should be ready to face challenges that comes up your way. At times, things may not move your way and you may have to change the strategy a bit. You should not be adamant and should be ready to bend a little when the situation needs.

Youths making their way in the construction domain

Podcast: Play in new window | Download | Embed

Subscribe: Apple Podcasts | RSS

We all have the wish to set up a company of our own and be our own boss but very few are indeed able to fulfill this dream of theirs. It is often the level of competition that weeds out the new talent and also the lack of preparedness on the part of the youngsters before they begin with setting up their business. One such industry that has given the wings to fly is the construction sector but the sort of competition one gets to experience in this industry is enormous. There is a rat race that exists in this sector. People are expected to do everything to just get a deal. It is not that getting work is way harder. It is just that people for some reason do not have the patience to wait for the right deal to come by.

Youths in particular who aim to become a part of this industry needs to take care of many things. Firstly they should work on their knowledge on this industry. This sector is pretty vast and involves lot many things that affects it on an everyday basis. So having a fair amount of idea often helps while taking the right decision. You should not want to see yourself lost when you get to know some common stuff about the industry that you are a part of. Therefore keeping your eyes and ears open and accepting new things from others should be your mantra to learn things.

Heavy equipment play a pivotal role in the construction segment. It is said that the companies who have the best machines and backed with a better workforce can stand tall at all times. So just having modern heavy equipment is not going to help you. You also need to back it up with efficient workforce who knows well how to work on those machines or else it is futile to have them in the first place. Simultaneously, not all machines that have the modern look over it should be purchased. You may never need that stuff in your entire project work and hence there is no need to possess that in your arsenal. The better way to work it out is first know your requirements and then go for the purchase. Also, purchase of heavy equipment should be done after thoroughly scrutinizing your finances. Heavy equipment are expensive metals and you may not want to spend your money on something that you may not use for the time being.

Last but not the least; keep a tab on your finances. If you do not do that, then you will not know when you have exhausted all your resources in the spree of buying heavy equipment and stuff that you feel is important but now you do not have any money left to run the business. Many young entrepreneurs have gone through this situation and they have to ultimately take loans to run the business or simply give away the idea to continue any longer.

Related articles across the web

Starting a construction business – start with demolition work

Podcast: Play in new window | Download | Embed

Subscribe: Apple Podcasts | RSS

It is often advised that when you start a new business do not begin with doing something difficult because you may then end up in taking enough stress to complete the job which will have a drastic effect on your job and things may go quite negative for you from there. In order to avoid such a situation you should take up something that is easy and does not take too much of effort. You may also save on your money and need not deploy more resources to get the job done. You will also make good money doing it and will start enjoying your work. However, you should not make that as your comfort zone or else it will be too difficult for you to get on from it. Though you are starting with something small and easy you should not limit yourself to that and should dare to think beyond that as well.

A business that is highly volatile in nature should be dealt with utter carefully and when we talk about a volatile venture, we can’t forego the construction domain from it. A person who is on his way to start up a construction business should keep his foot softly and understand the intricacies well before he goes full on. As every individual likes to work on a particular segment, he should stick to the simplest work in his segment. For instance, a person like to work on machines and is interested in works like road construction should stick to constructing lanes and broaden roads. He should not take up projects of building highways that connects one city to another. He may not be able to complete it as he will experience a lot of hardships coming from various angles.

Similarly, it is advised to business owners to begin with demolition work before they start taking projects like building apartments or commercial houses or things or that extent. Demolition work is considered to be the simplest by all means. He do not have to spend a big chunk of money in procuring heavy equipment as he can do his job with a dozer or any tractor and attach a wrecking ball and break structures. Well, the demolition work also has many layers where if he goes for bigger projects he needs to have modern machines to get the work done. In that case, he may not do the job using a wreck-ball.

Simultaneously, he also needs men who have experience in demolishing a 6-7 story building. He may not be able to go that work using his dozer. There he may need more than a dozer. But before he eyes for bigger projects in the demolition genre, it is important that he tries to first set his foot firm on the ground by taking up jobs that will help him to sustain for some time and help him learn from what he is doing. Once he spends few years and accumulates enough wealth and experience to take up something big, he should call it for the next round.

Related articles across the web

Process to acquire a construction company

Podcast: Play in new window | Download | Embed

Subscribe: Apple Podcasts | RSS

The acquisition or buying of construction firms is common in construction industry. This transaction involves a buyer and seller. In terms of business it is also called as acquirer and the prospective acquiree possessing the target company. The buyer may be motivated to buy a target company due to future growth plans, diversification in market, geographic expansion, market penetration, organizational development and to increase the assets.

Construction is a risky business, hence these transactions should not be done in haste. The buyer or acquirer needs to be diligent and should have a strategic plan. The buyer must create database of the interested target companies and collect each company’s information in terms of factors such as revenue, profitability, growth rate, number of employees, and products, so forth. For the transaction to take place it follows an order as

 

1.Initial contact:

The first step in the acquisition process is the initial contact with a prospective acquiree. It can be made by different ways as

Direct call and meeting: The buyer makes a contact with owner of the target company either through a direct phone call or an email to initiate one to one discussion. The initial discussion may be followed by many more discussion before a final deal is struck.

Joint venture: Instead of direct acquisition to enter a joint venture agreements which gives the acquirer the overview of the company’s management and operation.

Third party: Instead of making a direct contact, the acquirer delegates the work of contacting target companies to the third party to make inquiry about the willingness of the owners to sell.

 

2.Non-disclosure agreement:

If the prospective seller is interested in selling his company to the acquirer then both parties sign a non-disclosure agreement (NDA). This stamped document is highly confidential and information is not be given to any other party.

 

3.Letter of intent

Post NDA, the target company should send its financial statements, summary level documents to the acquirer. Based on this information, the acquirer may proceed with the further transactions and is documented in a letter of intent (LOI)

 

4.Due Diligence

It is the process of investigating and estimating a company before buying it, a comprehensive analysis of legal, financial and management documentation. The acquirer then sends a list of information and documents as due diligence requests to the target company. As a rule, for Due Diligence is necessary requires at least the following information:

1) corporate documents; 2) entitled documents (e.g., copies of powers of attorney); 3) licenses; 4) accounting and financial documents; 5) documents relating related to the assets of the company; 6) information on the rights to intellectual property;  7) all commercial contracts and agreements;  8) information on labour relations;  insurance; about disputes and litigation, administrative proceedings;  9) other documents relating directly related to the company. Since due diligence involves a lot of research it is conducted by both legal consultant and technical specialist in construction.

 

5.Final negotiations

The results of Due diligence if not found satisfactory then the buyer may either decide to proceed by decrease in cost or may not go ahead. If everything is favourable then buyer may proceed with the transaction and present the seller with a purchase agreement. If the terms and conditions and price are agreeable to the seller than the transaction would be complete.

 

The process of acquiring a construction firm is not an easy task. One needs to be experienced and understand the market trends to be successful at it.

Going out for vacation? Whom you can handover the business?

Podcast: Play in new window | Download | Embed

Subscribe: Apple Podcasts | RSS

Entrepreneurs work hard to manage and operate the entire business. Due to which they run a risk of burnout. They should take vacation to keep a work-life balance and stay refreshed. Taking time for relaxation will make them better decision makers. However, it is not easy for them to get away from the daily routine job which is very demanding. They should bear in mind that the company can run without them too for some days so taking a vacation will be helpful activity.

The following are some of the tips which may be useful to follow when boss plans to take a vacation.

1.Advanced preparations

He boss should communicate to the employees the dates of vacation. This will allow the employees to complete the necessary projects or approve of deliverables before vacation.

In case of individual clients and direct customers they should be informed early about the absence period. This allows prioritizing projects to be completed and the tasks to be delegated to be completed later.

The boss should take important contacts and their phone numbers on computer, mobile phone and on a piece of paper. Having this list readily available will save time in case of need to contact any of these people to handle an emergency while on vacation.

 

2.Type of communication

One or two people should only be allowed to contact the boss during the vacation period. Especially for updating about projects, when immediate attention is required or a new client has joined. The communication should take place via emails or text messages and only if needed then by phone calls.

 

3.Avoid working on big or major projects

Even when boss takes a vacation, the projects will be going. However any live or major projects should not be started during this period. Since there can be initial problems and project may not get completed thus may ruin the mood of vacation.

 

4.Prepare and train the employees

Make a list with employees so that know how to handle various problems and emergencies Though this responsibility would be delegated to only one employee, others should be also aware of how to handle the situation.

 

5.Every project should have a designated leader

While the boss is on vacation, every project should have a designated chief who ensures that deadlines are met and quality is maintained.

 

7.Do not hand over the reins of company

Although the teams may be running the projects successfully, the project leaders should never be allowed to take any major company decisions in absence of the boss.

8.Handover the projects

The boss should set up a meeting with the person/s who will be handling his project. Hand over the document which lists the important points regarding the project in terms of source of information, main deliverables, main risks/issues, stakeholder and sponsor’s contact details. This allows the work is completed within the given time.

 

9.Built a dynamic and dedicated team

This ensures that the work does not suffer and is completed within the required time frame.

 

Thus with careful planning, putting systems in place and by trusting the team, vacation time of the boss would be spent with enjoyment and relaxation.

 

Success in construction business is dependent on your foresightedness

Podcast: Play in new window | Download | Embed

Subscribe: Apple Podcasts | RSS

Things do not always move in one particular direction. You will see a lot of changes in things from what it is now and what it was in the past. Changes are bound to happen and when it does happen, it turns out to be good for some section of the population and bad for the rest. There is probably the third section which is not affected by it at all. The one who manages to taste success are the ones who are able to make right estimates at the right time. So the people whom you see at the top of various industries have managed to reach to that position by laying down their strategies after taking some very accurate estimates. Now the estimates are not something that is taken on air but are in fact made on the basis of precise information, some general calculation and most importantly foreseeing opportunities and threats.

One such industry that requires its men to be highly foresighted in order to become successful is the construction sector. This particular sector is indeed dependent on various other sectors and any rise or fall in the prices of the associated sectors can have a major impact on the overall construction sector. So a person who can foresee a challenge or an opportunity will take decisions accordingly and will keep his company safeguarded from any market threats.

Likewise he also will be able to make good money for his company in the same manner. This does not imply that a person who is foresighted never makes an error. Nobody is able to read the market correctly. They can all make some very close estimates but that does not mean that they will be correct at all times. There are also chances that they will end up making a mistake in calculating some facts or taking some accounts into consideration and which will cost them big chunk of capital. There are many instances where construction companies have taken incorrect judgments which have cost them dearly. But these are parts and parcels of the business. If the business owner hits the right note, he makes a bounty but if he somehow fails to get it right, he should be ready to face the music as well.

Strategy makers are ideally people who knows the in and out of the construction segment and therefore they are in a position to foresee things which others can’t. They are considered to be the highest paid in the industry and many even open their business as they do not see any reason not to have a business of their own. If they generate the quality to foresee things as it comes their way, they are able to take better decisions and this can really pay him off well in the construction business or any business that is linked with the construction sector.

Foresightedness has always been considered to be a virtue and people who possess this quality never have to look back at things. They only aim for bigger aspirations in life.

 

Related articles across the web