Tag Archives: Construction Company

Take rational decisions when it comes to budget of your construction company

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The success of every business is largely determined on the way you plan it out and also the manner you execute those plans. It is evident that the actual will never be at par with the estimate, which means that things will never go exactly the way you planned it will work. There will always be some sort of deviations from what you have estimated. The ground situation will differ from what you have contemplated; but the thing that is crucial is the difference between the estimated and the actual. If the difference is huge then it is a problem. This means that you do not have complete control on your work and there is a chance that it is going in a haywire direction. Pertaining to construction business, one can never afford to let his budget go haywire. It will cost him more than anything else. Also, the company needs to ensure that the completion of the project happens within due course of time because if it kind of lags then it will eventually cost to the company.

Plan by considering every possible situation:-

When you prepare a budget for a construction project, you should take into consideration every minute detail. Right from the operating cost to the miscellaneous everything should be accounted. If you foresee any increase in the price of raw materials that should also be included in your budget. Try to keep your budget on a higher end so that if price of any commodity shoots up in the mid of the project you should not get a shock of your life and should rather take the inflated price comfortably. Also consider the cost that the company will have to bear for any unknown reasons. For instance, during monsoon if it rains a lot leading to blocking the roads then you might not receive the materials in time which will delay the work. However, you still have to pay your employees for the day. There may be other such instances that may crop up which will be temporary in nature but can have quite an effect on your business. So it is advisable to account those situations in your budgetary.

Review the ground situation with the estimates:-

Once you have laid your plan, it is highly significant that you review the ground happenings with the estimates on a periodical basis. This will let you know if you are falling short or if things are in your control. Also, if you figure out any complication then that can be taken care right at the beginning. You should weed out any problem right at the beginning and not keep it for the last minute. This is possible only if you do a reality check periodically. While you are reviewing the plan with the actual, get involved the men who are in charge of different departments so that they all know the ground reality and can pass on the message of the meeting to the lower ranks.

Right strategy is what you need to grow your construction company

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Before you start your day, you need to plan it well so that you can execute them and make your day somewhat useful. In the same fashion, while you are in the mode of setting up your construction company, it is important that you plan your things well so that you can execute them without any hassles. Please remember construction sector is one such sector where you can’t accurately assume anything. Situations may change anytime and you got to be ready to accept them and deal with them as and when they come up. Therefore you should be ready to take up any challenges that come your way. This preparedness to deal with any situation is possible if you have proper strategy in place. There are few things that are very crucial when it comes to laying down of strategies.

Strategies are often made by consulting the heads of all the departments. You need to know the ground situation before you come up with any plan. It is not feasible for you to know everything about all the sections of the company and this is why you need the help of the department heads to give inputs. Now once you have the inputs, you can put up your plan in front of them and check what they feel about it. Never plan something without a proper discussion. There has to be few Yes’s and No’s while you are in for a discussion and all of you have to come to a common ground. Once everybody is on a common ground, you can take that plan for implementation.

It is to be noted that not all plans are meant to be implemented right away. Some also needs to be kept in the parking lot so that it can be implemented at the right juncture. At the same time, the plans that you have executed should not be permanent in nature. Though you should give some time for it to work or to give desired results but if you see that it is not working, move on to something next before it causes severe damage to the growth prospect of the company. This movement of strategy is also known as flexibility which is the next important criteria towards the growth of the company. You should know when to move to the next plan and also you should not have difficulty while you are in switching mode.

Many companies find it difficult to switch plans. For instance if the prices of oil have risen drastically or the prices or raw materials have fallen, you should be ready to revamp your plans and perhaps do it all over again. Not doing things at the right time can cause severe problems to the company or at times you will not be able to make the most while others are minting money. You should also have the right people to get the job done. People who takes up their job passionately are needed to make hay while the sun shines.

Becoming employee centric construction company is difficult but achievable

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We all want to work with a company that not only provide us with good growth but also takes interest about the welfare of its employees. Companies that provides us with good perks and facilities are hard to get by but if we ever land up in such a company we may not want to leave it unless and until we have a very strong reason for it. Companies on the other hand are focused on earning profits. They are ready to provide their employees with basic benefits that they are supposed to as per the guidelines laid by the law of the land but there are absolutely not ready to take the extra step to look after the welfare of their employees. They understand that their relationship with their employees is quite professional and they should not add anything more to it. This is the story of almost every industry irrespective of which sector one belongs to.

If we talk about construction companies, it is harder to find an employee centric company, a company that takes initiatives keep into consideration the betterment of its employees. But the point remains is it really so difficult for a construction company to think for the betterment of its people, the same people who works all day in the scorching heat of the sun and does not complain when there is storm and heavy rainfall and tries to remain punctual even when there is snow on the roads.

These sorts of guys should be rewarded with bonuses and extra pay and this is absolutely not difficult to do. A little raise in their salary or a monthly incentive can bring a big smile on their faces. In addition to this, you can also provide them with free medical insurance. In this case, they do not have to pay the premium of the insurance and will be covered against all ailments (as per the policy of the insurance company). The insurance companies will be more than happy to offer discounts on the insurance premium if the insurance is taken in bulk. So in this way, you get your employees covered against ailments and also against any accidents that happen in and outside the jobsite. If they want to add their family members as part of the medical insurance they can do so by paying the premium from their pocket. What you can try to do for them is get the premiums discounted so that they pay an amount that suits their budget.

All these features can also act as a good retention policy as well. Your employees will not leave you just because they have found a company who is ready to pay them more than what you do. That company may not provide them with these additional features which will act as a binding force and will kind of compel them to not leave your company. You only end up paying a little extra but in return you can enjoy the loyalty of your trusted employees.

Take suggestions before starting a construction company

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Before you get into anything big that can either shape up your career or can ruin it, it is very important that you sit with someone who knows about the subject and take adequate suggestion from him. Do not do anything in haste and for something that is so crucial for your life and career you just can’t take any chance on it. You have to be more than 100% sure of what you are doing and why you are doing. As long as you do not have the answers for your questions it will not be wise enough to get into it. We all want to have a business of our own where we do not have to work on other’s instructions. A place where we can take our own decisions and will not worry about what the boss will say. But to start your entrepreneurial journey you must ensure that you know the first step that you should take.

People who start their construction business are also found to be working with some other construction company. They may not be able to give their 100% to their business but they ensure one thing and that is they will have a source of income even if the business does not work. Now there are few people who are smarter than others. What they do is they stick around with a construction company but work there for few hours in a day and the rest of the time they devote it to their business. People come out with real smart ideas but the fact is they also get some ideas from others. They take sound advices from their peers and accordingly apply their mind to come out with a great idea.

Construction sector is one such business where you will not be able to understand the entire business in one life. It is pretty complex. People who have spent their entire life in this business at times learn a thing or two and also encounter situations where they have to seek for advices. They do have a team of advisors who are experts in their respective fields and they help the owner of the business to come to a decision. So when you intend to get into something as complex as this it is inevitable to not look for advice from an expert.

If you are already working in a construction company and have great rapport with the guys who are older than you and also far experienced than you, it makes ample of sense to approach them with the idea of starting a construction company. They will be the right folks to advice you on it. Their advices will be quite in-depth and will hardly miss out on any crucial point. Right from heavy equipment to hiring competent construction laborers they may speak to you about everything under the sun. Most importantly you should ask them to advice you on how to tackle the various challenges that you may encounter. You will learn the rest with experience.

Shortage of Workers a Problem for Construction Company

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For the success of a business, there are a number of factors that need to be taken care of. These factors include loyal and happy employees, good suppliers as well as skilled workers. There are some industries or businesses that are exceptionally dependent on manual labour or workers and one such industry is the construction industry.

If you run a construction business or company, it is a must that you are always equipped with all the necessary construction equipment that can make the work faster and easier, as well as adequate workers. Though construction industry is one of those that have experienced amazing hike over the past few years, due to the constantly growing need for new constructions, worker shortage is also a problem that they have to face.

Causes of labour or worker shortage in construction companies:

There is always a need for skilled workers in every industry. Workers or labour is available in abundance, but skilled ones are really minimal in number. Hence, there is always a shortage of these skilled workers in every industry. However, before you come up with a solution for these, it is a must that you know about the causes behind the worker shortage problem in a construction business.

  • Lack of safety and security:

 

In most cases, the inhibition against the blue-collared works is the lack of safety and security from these construction projects. Young labours fear from joining these construction companies due to the fear of meeting with accidents that are caused by a lack of safety measures.

  • Financial insecurity:

 

Often, the workers consider the college education and a good job prospect as their only way to financial security. Therefore, they do not want to join the construction industries.

  • Cultural inhibitions:

 

Doing construction jobs is still considered by many as “dirty work”. Hence, they are more drawn towards joining a full-time educational course with a huge debt and then end up searching for jobs that would help them in repaying the huge debt.

These are the most common causes behind the worker shortage problem in construction companies.

How to solve the problem?

If you have a construction company and if you too are met with this problem of worker shortage, it is a must that you take care of the problem at once. Otherwise, the performance and functionality of the business will be affected a great deal.

To manage the worker shortage problems, most of the company owners make the mistake of filling the shortage with unskilled labours. However, this only wastes more time in training them, completing the administrative work, giving them high wages without receiving the desired skill and also in providing the drug tests, safety training etc. Hence, increasing the productivity of your existing workers is always a great idea.

The amount of money that you save from this can be invested on uplifting the standard of the existing labours or workers. In case of a construction business, there is the additional facility of depending more on the construction equipment or heavy duty machineries that will save you time and money, as well as increase productivity. This will reduce the necessity or dependence on manual labour to a great extent.

Market your work to big companies

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In the construction sector it is all about getting new projects one after the other. The moment you are done with one project you should ensure that you have another one in hand or else your labor will be idle. Although most of the labor force comes from the union but at times you hire the cream and make them a part of your company. So you can’t afford to be out of project at any given point in time. If you are a small construction company and have always taken up small projects, it is perhaps the time that you begin to try to get work from big companies.

Big construction companies usually require small companies and contractors to work on their project. They deploy very few of their labor force at work and give contracts to other small companies. It makes sense to take up work from them. This will give you the much needed exposure that you need to grow as a company.

Create a strong profile of your work:-

Before you approach to any of a giant construction company, you need to make sure that you have a strong profile of your company to put across. These big companies do not give contracts to any lay construction company. After all it is a matter of their reputation and they will not do anything to put it at stake and hence will acquire the best resource to complete the project. Now you have to prepare your profile in such a way that by having a glimpse of it they should appreciate it and should feel proud enough to have you as a part of their institution. You will ideally go to them with a Power-point presentation where you will mention the key projects that you have completed and your role towards the completion if you were not the sole player. Also talk about the types of heavy equipment you have at your disposal or can acquire them if you come across a bigger project.

Your experience should talk about you:-

If you are a company that is into the business for the last few years then you should talk about your experience and the different types of work your company has got into. If you specialize in a particular genre of work then that should be highlighted and spread it across the board that they will not find anyone doing the same work better than you. Design a website that looks professional and speaks volume about the construction world and also about the projects that you have been associated with. These big companies need you. All they want to make sure is that you are the right guy for them and this is exactly what you also need to pass it across to them.

The project undertaken by these giant companies last long which means that you are in business for that long. By the time you are associated with one such company, try to reach out to other companies by displaying your role in the current project. It will really help you to get new work.

 

Periodical trainings may help employees to perform better

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It is perhaps not heavy equipment but the human resource that plays a pivotal role in the making of any successful business. The employees of a company can shoot their productivity to a new level if they are happy and content with the treatment that they get by the company and also by their bosses. The role of the management will be to ensure that the employees are well trained and can complete their work with utter accuracy. In an industry like construction, the role of the workers is very crucial. Right from the laborer to the civil engineer, they all require adequate training to understand what they are doing and how crucial their role is in the company. This also gives them a sense of importance and they take up their responsibility quite seriously. Even the guys who sit at the top require training on how to handle the labor force. The guys in the management have a bigger role to play in the overall performance of the company.

Construction laborers once they go skilled get ample of opportunity in almost any construction company. It therefore becomes the responsibility of the management to ensure that the guys do not leave the company for trivial reasons. Now to lower the attrition is a challenge that many top level managers find difficult to counter. In a construction business, it is not just the labor but there are many other people who hold such important departments that make the job of the top level managers tougher to hold them back. This is where their training comes into picture. These guys should be trained on a periodical basis on how to handle the vast labor force and ensure that they do not leave the company and stay productive. Keeping everybody happy is a difficult task and also requires lot of skill. The top level managers should be trained to acquire those skills and keep the guys happy.

Training the staff is another crucial segment that should not be skipped at any cost. The people from the Admin, HR and other such crucial departments should first understand the importance that the department holds and the positive impact that they can have on the people belonging to other departments. They should then be trained on how effectively they can make the working atmosphere in the company livelier. Organizing a small function or a health camp right on the jobsite can have a huge impact on the workers. The guys should be trained to come up with innovative ideas and put them to effect.

Lastly the laborers should be trained regularly on issues like health and safety. These are probably the most neglected areas that should be addressed. The trainings should be scheduled once every fortnight or once in a month and the attendance of all the employees should be mandatory. The employees will learn many things in this process that will help them to grow as a person and also in their career.

Review of strategy is important for the growth of a construction company

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We often consider planning to be one of the most important components towards the growth of a business but there is something that is equally important and that is reviewing those plans. It makes absolutely no sense to prepare a plan if we do not take care to review it. Things may go haywire and we will not even get to know about it as long as we do not sit to check the ground reality. This is why reviewing the plans is very crucial for the growth of any company. It becomes all the more important when one is take care of his construction business. This form of the business has too many ups and downs in it and one has to go through a lot of hardships to put everything in place. To set things right, a lot of people have to get involved in various sets of planning and knowing the nature of the business which is pretty dynamic and where anything can happen at any moment, one needs to make sure that he keeps on checking if the actual are in sync with the proposed plan and if not take corrective measures to set it right.

Involving all the head of departments for setting the plan:-

When you are building a plan, it is essential that you involve the heads of all the departments so that they can all give their inputs pertaining to the cause of the plan. You can have deep insights from them about how the department can perform and if there will be any requirement of additional workforce in the due span. You can rely on their advices and then go about framing the plan. In this way, they all will be aware of your goals and then it just will not be your goal but will become the goal of the company. It is not just you who will be working hard to realize the goals but your entire team will be with you.

Have a quarterly meeting with all of them to check the actual:-

Reviewing of plans should be conducted once in 3 months. This lets us know the real picture from the proposed one and what needs to be done to get things back on track if at all it is out of place. It also ensures that things do not completely out of hand which is possible if you take up the same meeting after a year. You will probably find that the damage has become irreparable and may have to start all over. That will be a sad part for the management also a question on your leadership quality.

Check area of opportunities and eliminate threats:-

It is only during the review that you get to know the possible threats that exist and can act as a big danger to the project. You can’t get to know the threats while you chalk out the plan. In the same way, while you start working on a plan you also come to know if there are any more opportunities that you can explore. Pick up all the opportunities and try and eliminate the threats.

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Building finances for your construction company. Does it take time?

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Construction is a multifaceted industry and a risky business. It requires huge financial investments, which get returned as profits much later. Thus, it is an expensive business which offers delayed benefits. The construction project cannot proceed without adequate finances. Hence, the owner of construction facilities must obtain reliable capital resources to finance costs of construction. The owner does not just work on one project but numerous projects which are all financed together. In addition, there are other problems such as budget overruns, unreliable contractors and delays. If the owner is unable to cover costs, the capital investors face financial problems.

However with a pragmatic approach, owner of construction industry can build finances (achieve profits) in less time. Some of the guidelines for the same are as follows:

  1. The owner should be aware of the amount of work to be undertaken. Further obtain knowledge of the technical skills required which will enable to calculate the correct cost of construction project. Thus he should define goals and set expectations. Emphasis have to be on long term planning. Setting expectations enhances confidence of both clients and employee’s in the owner.
  2. Generally it costs less during planning and designing of the project but involves substantial expenses during construction. Instead of giving importance to sales, and getting deals, owner should develop understanding of the financial aspects and costs involved in the construction project. They can also hire appropriate project managers and financial consultants to understand the actual costs incurred by a project.
  3. Estimate the true profit by considering overhead costs, risks and job costs.
  4. Managing the job production to achieve profits: the job should be done in the cost-effective manner to make profits. Changing daily orders of operation and determining the productivity of labour force. When the work to be completed in 2 days, takes 6 days, it incurs additional costs. Thus jobs should get delayed.
  5. Accounting for profit by employing a project manager who keeps track of the budget and purchase orders. He has accurate knowledge of the expenses since he is present on the site. He applies construction specific accounting knowledge.
  6.  Since education always helps, hence training to be given to labourers, employees and management professionals.
  7.  Emphasis on written procedures (SOP) is important. Procedures should change improve. They should be evaluated periodically.
  8.  Effective Good communication with employees is valuable and necessary. They result in strong relationships with all parties and frequently result in future referral business.

Overall building finance in construction industry takes time. Following the above guidelines will enable the owner to develop business skills to reap profits in less time and have sustainable career in construction industry.

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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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