Tag Archives: Construction Industry

Learning the construction business is important before you hop in

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When you are thinking of stepping into a dynamic business, you got to think twice before you do so. It is never easy to be stable in a dynamic business environment as you will keep getting new challenges every now and then and if you do not know how to deal with them, you got to end it there. Construction industry is one such dynamic industry that definitely has a lot to offer but at the same time, when it comes to taking things away, it becomes very harsh while it does that. There are numerous examples of individuals who have started their construction business but could not survive during the hard times. One needs to understand that this is a high competition business and in order to survive and move further in this business, one needs to learn the business well. Experience in running the business does matter a lot. You got to be with someone and understand how the business works. It is only after that that you can think of hopping in this industry.

Learning a bit about heavy equipment is a must:-

If you are in the construction business, it is important that you become friendly with the best friends of this industry. Heavy equipment are considered to be the best friend of the construction industry. You can’t operate a construction business without heavy equipment as you need them to complete your projects. Therefore, it is a must to learn a bit about the different types of construction machines available and used in this sector. Once you learn about the machine, you also need to know how often you need to service them and from where you can get the parts of the machine. Also knowing a good mechanic will always be helpful as you can turn to him for any sort of assistance to fix your machine.

Check the wages people are paid in this sector:-

Knowing the standard salary/wage rate that an employee gets in the construction company is also very crucial. The salary that you pay to an operator can’t be definitely paid to an engineer or an accountant or for that matter to a laborer. They are all paid different amounts as per the salary structure defined by the industry. Once you know that, you will also pay them accordingly. Not knowing that piece of information can lead underpaid operators and overpaid laborers. This will lead to major internal conflict within the company resulting in people leaving the company.

Experience matters a lot:-

In order to learn the business well, you should spend few years working in one such construction company. That will help you to understand how the business works, how to get clients and how to close the deal. A person who is a novice will not have a clue of how to grab a deal. Working in a construction company will help you learn lot than you can expect and then after having spent good number of years, you can think of beginning your own business.

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Keeping your cards close to your heart is the thumb rule to success in the construction industry

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Every businessman has some or the other secrets that is the reason of his success in any industry. Especially in the construction industry, people need to be very shrewd about what they are telling to others. In no way they can utter a single line of their success mantra and people who write books claiming that they have written all the secrets to become successful in life are not so true. They may just give a glimpse of the entire mantra and elaborate it extensively to make it look like they have written everything in the book. However, that’s not the fact. A businessman would always want to keep his cards close to his chest and would hardly or never reveal his business secrets to anybody.

We would be discussing why one should not speak more about his achievements and the way he managed to attain success in public especially when he is dealing with men in the construction industry.

Your business model is unique:-

We all follow very distinctive business model and if it works we start reaping fruits. We add few things from it and deduct any unwanted elements which ultimately make it a model that many would like to follow. But the sad part of the story is that you can’t allow your business model to go public. Construction business is a highly competitive business and everybody wants to grow as quickly as they can. In this situation, if you make your model public and easily accessible to the general public, then there will be no stopping for people who will use your model and claim it to be theirs. You have only unnecessarily grown problems for yourself. Therefore, just keep the stuff with you without letting others have the slightest hint on what model you follow and how you work that you make such good profits.

Integrity is key:-

Integrity is a big business requirement and it is hard to get people who know what integrity is all about. It is absolutely important to hire the right set of people who understand the importance of honesty and integrity. People of strong character and principles should be the one you want them to be a part of your company. Once you are sure that you have found the right set of people on whom you can trust, you can share your business model with them and can work on it to take your business to new heights.

Avoid being a part of excessive limelight:-

We all like to become famous. But becoming famous at what cost would be an interesting question. It is fine to know people in your business circles and is also great being known to them. Having good connections always help you in your business but coming into excessive limelight can become a problem. Unknowingly, you may give people the chance to take undue advantage. Too much of anything is not good and definitely for your business.

 

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Opportunities in the construction sector are endless in gulf countries

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Every industry has its own ups and downs. So when the time is good, the industry grows. However, when the industry as a whole is down, there is a state of panic in the minds of the people who are associated with that industry. Having said this, it is not necessary that the industry that is going down in your country will have the same trend in other countries as well. This means that in case you are seeing a downward trend in one particular sphere, the same industry in some other country is prospering. This gives a very good opportunity for people who do not mind moving to other countries and working there. Of course, a lot also depends upon the work visa rules of that country but if that is taken care of, then it should presumable a factor of moving from one place to other.

As far as the construction industry goes, it is moving at a steady pace in the United States. A lot needs to be done in the sphere of oil and gas sector which remains unexploited and companies are trying to check everything in their possibility to get the resources out from the earth’s crust and utilize them in the best possible manner. However, there are countries that are hugely dependent on the construction sector for the development of their country’s economy. Countries in the gulf are investing good deal of money in the construction business and are asking people from various countries to come and work there. They are also paying fat package to guys who are experienced in the construction sector and could be an asset to the company.

Skilled laborers in the United States can take advantage of this opportunity and move to such countries that are ready to pay them the money they demand. The only thing that they need in return is their experience, effort and hard work to make their dream come true. Americans are given high respect in many of the gulf nations and they can work safely sending back enough for their families to live a comfortable life.

In order to get hold of one such job, you can check newspapers that give advertisements of different construction companies all over the globe seeking for skilled and unskilled laborers. They also give their email address on the advertisement. You got to send your Resume to them and wait for their reply. They do not take long to reply and things will be clarified to you in that email. You may ask for a phone number in case you want to talk to them. An interview is anyways going to happen where you can understand what they are look for and if you are ready to sign up for that.

Another way to search for a job in the gulf countries is by checking the opportunities on Google. You hit the kind of job you are looking for it will throw everything it has. This will make your search easier and you will have more control over things. The construction sector in indeed booming in the Gulf nations and this is the time to earn good dime there.

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Don’t run after money – Give some time for business to grow

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It is pretty obvious that we all do business for money. The very reason why we end up doing a business is that we can make more money than what we could have by working with a public or private concern and of course for the very fact that we will our own bosses and no one will be there to monitor or control or work. This all sounds to be so nice and sweet as long as you are able to generate money from your business. However, the bitter fact is that for the first few years you have to struggle like anything and you get nowhere near of making any profits. On the contrary, there are high chances that you will be incurring losses and still need to pour in more money in order to sustain your business.

It is a known truth that construction business can give you so much money in a shorter span that no other industry can probably give and due to this very reason more and more people are getting into this industry. It is not so difficult to start a construction business but it is quite tough to sustain if you have one. The main hurdle is to get projects and if you succeed in getting projects, the next problem will be if you can complete the work on time. You may need different kind of heavy equipment for which you need enough reserves in hand or else you have to end up taking loan from a financial institution paying them high interest. Other than that, you need to employ able staff and construction workers and need to ensure that you pay them on time.

All this will take a lot of time to fall in place. So if you do not have the patience and if you start running after money, you will not achieve what you wanted to. If you keep earning money as your only motto then things might not go your way and you may have to wind up your business sooner or later.

Take some time to know your business:-

Every kind of business has certain tricks of the trade which one needs to be aware of. Without knowing them, you should not straight away jump into forming a company and employing people. This may back-fire you in some way or the other. So it would be important that you first take time to learn a bit about your business and once you feel that you are ready to take the plunge then start making preparations like accumulation of funds, looking out for employees, conducting interviews and stuff.

Keep reserves for the first 2-3 years:-

You business will not start generating profits from the word “GO”. For the first few years, you may experience a lot of hiccups which will gradually settle down. It is important that you give time for issues to settle as it will definitely take time and will not disappear in no time. It ideally takes 2-3 years of struggle to take a business from a toddling phase to the next level.  Once you are out of the initial phase, things will start becoming better for you.

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Stagnancy in construction business – It’s time to review your strategy

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Forming strategy is a part of every industry and all kinds of businesses. You have to plan few things in advance by assuming how the situation could be in the next few days, months or years. A person who has been running a business for years and has seen many ups and downs of the business can make little mistake in assuming the market trends and on the basis of his assumption, he can form a strategy. However, what can one do if he finds that his strategy is not working and the business is still stagnant and waiting for the push.

Well, it means that it is time to review your strategy and probably re-plan things. It is not at all necessary that what you have assumed will turn out to be correct. Many a times, the most experienced guy in the industry does mistakes in estimating how the market will react in the next few months. Future is unrealistic and it may be utmost difficult for anybody to predict things precisely. We can follow the past trends but based on those trends deciding the future trend is not possible. Playing a bigger bet just by predicting the future is just not advisable and definitely not advisable when you are running a construction business. But that does not mean that you will stop estimating things and will desist from laying strategies.

When you are in the construction industry, you take into consideration advices from all corners. Right from market experts to your fellow workers, any suggestions coming from whatever side can be sheer effective. Therefore, you should keep your ears open to their advices but take rational decision and should not just go just by their words. Give your thoughts to the entire version as it is important to know what others think about the construction market.

Just in case, if you were doing well in your business and all of a sudden you experience stagnancy, then it is a matter of worry. You should act immediately or else the stagnancy has the potency to eat away your business and you might end up losing everything that you have. What becomes important for you do is review your plans and check what is not going as per the plan and if at all you need to bring any kind of changes, be flexible enough to adopt and adapt to the changes.

Stagnancy in the construction business can be due to several reasons. Rise in fuel price can also affect your business in a larger way. You also got to keep a close watch on the client relationship. Many a times, it has been seen that you stop getting business from clients as they have got hooked with some new construction company. A fall in the quality of work can be one of the reasons behind the change of business. It is very crucial that you do a Root Cause Analysis (RCA) and check all the possible reasons that could have led to the stagnancy in your business and once you have found the problem, waste no time in uprooting the issue once and for all.

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Surviving the competition is the key in the construction industry

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When you are dealing with a business that has cut throat competition at all levels then survival becomes the key. It is quite evident that you may not get things quickly and with ease and probably have to struggle for everything that you desire to achieve. Well, construction industry is one such industry that demands a lot from people. Undoubtedly, it also pays back with good dividends but in order to get the reward, a person has to go through a lot and if he is able to survive the tide he becomes the winner.

Construction sector is a highly competitive industry. People are always eying from projects irrespective of how big or small it turns out to be. The size of the projects does not matter much to companies who have just set up their businesses. What is rather more important for them is that they keep getting something or the other and do not stay out of work for long. Staying out of work for long can have negative impact in getting prospects in the future. People will shy away from giving projects to such companies. Therefore, it is very crucial to be in business and do whatever big or small one can get.

We will talk about with few pointers on what one can do to survive in an industry that is so competitive and demanding.

Generate contacts and stay in touch with them:-

You can’t expect to get projects if you stay isolated from your brethren in the industry. No doubt that this industry is full of competition but staying close to your peers will do no harm to you. On the contrary, it may get something good for you. Remember, not everyone can do everything and it may often happen that someone has got a project which they find is not their cup of tea. Since they have good terms with you, they will turn on to you and may ask to take the project rather than asking the vendor to search for someone who can do it. So your good term with your competitor has got a deal for you.

Ensure you have the right set of construction equipment:-

Construction equipment are so very important if you want to stay for long in this industry. You may not require all forms of heavy equipment but you definitely need the one that will prove essential to complete your project. Therefore, it is vital that you do not spend your money in buying all sorts of equipment that you probably may not even need but you make sure that you have the ones that is required to get your work done.

Take good care of your heavy equipment:-

Maintenance of heavy equipment is the key. Since they are expensive piece of metal, you may not want to ruin them by not taking due care. Hence, it is imperative that you do proper maintenance of all your equipment. They too need some rest. So give them what they need and they will return you with rich dividends.

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Rain affects the construction project

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Rains ideally brings cheers on our faces but when it comes to the construction industry it may not always be the same case. When the workers are laying the foundation of a building, rains can be a boon. The rain water supplements for the cost of water that is required to put on the foundation slab. A construction company can save a lot when it is in the foundation phase but when the building is been given a shape and it starts raining, the entire work comes to a standstill. The builders can incur huge loses if it continues to rain for days. There are lot of places in US where the rainfall in heavy and the construction sector in these places take a backseat in such weather conditions. Many construction companies do not want to take any projects during the beginning of the monsoon as they have experienced good deal of problems due to heavy rains.

It hugely impacts the digging operation:-

For construction houses who have taken a new project at the beginning of the monsoon face tremendous issues to dig the foundation. If they start the digging process and it rains heavily, the entire place gets filled with water and then they have to take extra pain to pump the water out. In order to pump the water out, they need specialized equipments that are capable in pumping the water. This ideally cost them a fortune and many construction companies do not want to get into the hassle of digging the construction site during the monsoon. They would rather wait for the weather to change and then begin the work.

Can’t complete the project in time:-

Rain can play a huge role in spoiling the goodwill you have maintained over the years of completing the project in time. If the weather is not good, you have no other option than to wait till it clears off. You just can’t take any kind of risk and begin working. If it starts raining, you are left with no other alternative than to stop the work. Therefore, it is imperative that you either take the job at the time that you feel is appropriate and you can kick start the work from the word “GO” or if you feel the monsoon is going to be a spoiler, then you better inform the people involved that there may be some delays before you hand over the work to them.

Problem in transporting materials to the construction site:-

Heavy rains can disgust you when you are in dire need of construction materials to be transported to the construction site. Due to water clogging, vehicles carrying the construction materials will get stuck and can only move once the water level recedes. If the materials are coming from a far-fetched place and it gets stuck due to water jam then you have to pay your workers for doing nothing.

Speeding up of work can lead to a decline in the quality of work:-

Since the rains have delayed your work and you are running behind schedule, you will be hurrying things. This may lead to compromising the quality of work. If the quality is compromised, there are higher chances that you may not get any business from the same person.

By having lower diesel prices, are you making a bigger profit in your construction business.

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The rise or fall in the price of fuel does have a big impact in the profitability of a construction business. A construction company tends to make good profit when the price of the fuel is down and it has to shell more money on fuel when its prices are high. For the last many years, we have seen that the diesel price was on an increasing trend. It has only been in the last few months that the diesel price has started to fall and things seem to be a bit better for the industry. Other than this, heavy equipment manufacturing companies find it easy to sell machines that run on diesel. The logic to this is quite simple.

The machines that move on diesel involves less cost to production which means that they can sell them off at a lower price than machines that are more environment friendly. However, giving due consideration to the current environmental condition, they are also producing machines that runs on diesel but release less toxic. This may not be at par to any environmental friendly construction equipment but it also does its bit in bringing down the level of pollution.

Construction companies want diesel prices to be down:-

You make good money when the price of the commodity that is mainly required in manufacturing the end product goes down. This is quite evident t happen and does not require any big thinkers to research on it. It is exactly the same way you tend to make good profits when the price of the diesel goes down. Fuel is one of a commodity that is required a lot in a construction project. Your require diesel to run the heavy equipment.

These heavy equipment do not consume fuel like your car does. They simply eat up all the entire fuel that is there in the tank in few hours. If you keep the engine running throughout the day, you need to make sure that you have enough diesels for the machine. Now, you run many such machines in case you have a big project to work on. So all the equipment need diesel to function and if the price of the fuel is high, you are obviously shelling out a chunk of money just for paying the fuel price.

Now, let us imagine the price of diesel goes down. This means that you will be paying less and still be using the same quantity of fuel. This leaves you with surplus funds which can be utilized in taking care of other business expenses. You can even invest this money into buying much needed heavy equipment that are more technologically advanced and perhaps is just the need of the hour. So a fall in the price of diesel can win you so many things which are apparently not possible with the prices being high. It is therefore the wish of every construction company to see the price of diesel falling down which will in turn give them more gains than ever.

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It’s Never Too Late To Set Up A Business In The Construction Sector

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We often wonder the right time for an individual to start a business. Is it suitable for him to start setting up his business when he is young or he should wait to gain some experience and then plunge into so that by then he has learnt the tricks of the trade and can compete with his competitors. Well, there is no thumb rule for when one should start a business. It all depends on how eager he is to establish his business, if he has enough money to go for it, can he devote his time to the business as it being new, will need a lot of his time and attention. Keeping these few things into consideration, one must take the decision of getting into a business.

If we talk precisely about the construction industry then many believe that there is no age limit to set up that industry. However, before you make your mind up to get into it, there are few questions that need to be answered. How much do you know about this business? What scale of business you want to conduct? Scale of business signifies the kind of projects you want to take. Have you chalked out a plan for your business? How will you strategize your plans as and when you move ahead in your business and if you have the right resources to flourish your business adjoining with the fact the finance required to keep it going. You got to understand the seriousness of all these questions and hunt the answers. Only when you have answers for them, you can take the next leap.

The scale of business that you want to carry is perhaps the most important and deciding point as far as setting up a business in the construction sector is concerned. I you are in your thirties and have sound knowledge of how the construction business is taken care, then you can dare to think big as you may have another 30 to 40 odd years to give to this industry. But if you start in your seventies, then it may not make much sense to put your hands in big projects. Other than that, big projects are given to guys who are experienced and have earned goodwill in this industry which one can earn by staying over a period of time. Therefore taking up small contracts should be something that a person in his 60’s or 70’s should look for.

Concurrently, this industry is a high pressure one. If you are not a person who can deliver in pressurized situations, you really can’t dream big here. People who can take pressure and deliver get more assignments. Having mere ambition may not do any good if you are not blessed with capabilities of working in pressure.

Last but not the least is your foresightedness. You got to have the capability to foresee opportunities and threats and it obviously comes with experience in this domain. Therefore, perhaps experience also matters a lot in this sector. So age is not a constraint but lack of experience is.

Are the oil prices affecting the construction industry

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The cost of heavy equipment depends a lot on the oil price which also has its impact in the construction industry. It is not necessary that if the oil prices are low, it will be a sunny day for the construction industry but ideally it always has a positive impact. The construction industry seems to make good profits when the oil prices are at its low primarily because the heavy equipment consume the same amount of fuel with limited costing to the company. We have seen that when the oil prices were high, it had a negative impact on the construction sector or in other words the construction industry were not able to afford to give any discounts to the end users.

When we relate construction industry with oil prices, we also have to consider few other dimensions and they are the ones that have a greater impact than the others. For instance, after excavating the land, the soil is supposed to be dumped at a distant location for which you need trucks. Now if the oil price is high, it will undoubtedly become expensive for the company to move the soil from one place to another. This will certainly have its impact on the industry as the construction companies will not want to incur losses by selling their products at a lower price. This was just an example. There are many other factors that are co-related with the oil prices that determines the fate of the construction domain.

There is also a flip side of fall in oil prices that can have a negative impact on the construction domain. Heavy equipment companies are in the process to manufacture equipment that consume less fuel. Now taking this new technology into consideration, we can construe that the equipment will be expensive and if the oil prices starts falling they are in no mood to product equipment that are less expensive but consumes more fuel. So the construction companies are left with no option other than to buy those expensive equipment. Other than that, we have seen that after a small correction in the oil price, it again starts rising. This means that the fall will be for a very limited time and the heavy equipment companies will not want to change their technology for a limited duration.

Fall in oil prices affect the construction industry in one more unique way. For instance, a construction company started a project when the oil prices were high but by the time it completed oil prices started falling. This actually is benefitting the companies who have started the project during the fall as they will be able to sell the product at a lower rate than the one who completed their project during the time when the oil prices were at its peak.

Other than that when the oil prices are high, it has the capability to make the entire industry sluggish. It is particularly during this time that the construction companies are not able to show huge profits. Nevertheless, fall in the oil price is mostly considered to have a positive impact on the construction industry.

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