Tag Archives: Construction Industry

Stand out in the crowd in the Construction Business

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

Be as innovative as you can:-

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

Be ethical and honest to your client:-

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

 

Guidance is required in every step in the construction industry

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

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

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

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

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

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Acquiring a construction business is always a viable option

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

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

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

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

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

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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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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.

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.