Tag Archives: small construction companies

Small construction companies benefit more by taking small contracts

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Owners of small construction companies often feel that they will make more money if they manage to get to work for big projects. However, that is not the fact. When you get involved in big projects you also need to deploy more labor, more heavy equipment and need to ensure that you have enough capital in hand to fund the project. You also have to go through a lot of hassles which is basically involved in bigger projects. At the end of the day you earn good money but if you co-relate it with the effort you have taken and the capital you have invested, you may have a feeling that is this really worth? Having said this, it does not at all imply for any small construction company to not to engage in bigger projects but while they do so they need to make sure that they reap the maximum from it and not give away the resources that they have.

Small projects require less investment:-

If you take up a small project, it inevitably requires less investment. Therefore you will also find people who will be ready to invest in your project. Though the amount of profit will not be enormous but it will be pretty decent to suffice your business and personal needs. You also do not have to buy latest heavy equipment and can work with machines that are bit old. You can buy such machines at a cheaper price or can even take them on rent where you pay a nominal rental value and use the most of it. The capital that you invest in a project is also less. You do not have to manage a large labor force for which you need not employ an admin team and if at all you need to have an admin team they can be less in numbers. This means that do not have to shell a bomb to pay them their wages.

Easy to get:-

There is a mad rat race to acquire big projects and you will find most of the big construction companies out there trying to beat one another. It is very difficult for a small construction company to get into the race and try to bag the project. You need strong connections to get there and you got to be really quick in making those connections. On the contrary small projects are not as difficult to bag as bigger projects are. No doubt that you will face stiff competition there but you will still be counted. Moreover, you can get into a project by working as a partner with the other company. You have ample of options to keep your business ticking.

Takes less time to complete:-

Unlike big projects, smaller ones take less time to complete and therefore it gives you the opportunity to move on to the next one. Without losing much time you start hunting for the next work. A project that takes more time increases the operating cost of the company too and therefore the magnitude of impact of the operating cost is lesser in smaller projects.

 

Small construction companies should aggressively market their projects

The success of any business lies upon the fact that how aggressive you are in reaching out to the mass and sell your products to them. For start-ups it is crucial that they spend a lot of their time, money and energy in aggressively marketing their brand and to try to set up an image that will last for long in the minds of people. A start-up company has to face a lot of challenges from all corners while building a brand. They may not get enough resources who can do the job for them. There may be monetary constraints that they have to experience every now and then but they still have to carry on with it. Hurdles are part of any business and it is not with small business units who faces this but also the larger ones but they know how to tackle it with the help of their experience and for new companies they are in the learning mode so they may feel the heat more than the older ones.

Construction industry is quite a competitive and volatile industry where there are many players vying to stay afloat and making it big in the business. So if you are a small unit and are not restricting yourself to petty works, then you should take the approach which many big construction companies did when they were young in the industry. They marketed their work aggressively. They wanted people to know them through their work and have made use of all applications to create a space in people’s mind. This is what you got to do if you want to make a brand of your tiny company. Just talk about your work to people in the industry. Tell them what you are and what you are capable of doing. Show them the projects you have completed and the time you took to get it done. These important facts really matter a lot for a small unit to get more work and eventually turn into a giant.

Reach out to big companies:-

Big construction companies need you to complete their work. They give contracts to small construction companies and contractors. You should reach out to these giant companies who take up big projects and then look out for small companies to complete them. Take your company’s portfolio to them. Make a smart presentation that they can’t deny you the offer to work with them. This will give you the exposure to work in a big project and you can add that up in your portfolio. Once you get associated with a big project you will not have issues getting other projects. It is just that you have to prove your worth to them.

Make use of social media platform:-

With the help of social media you can reach out to a lot of people at the same time. They will know you for your work if you can effectively make use of this platform. Getting small work will never be a problem but you can aim for bigger projects if you can market your company well on social media.

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Small construction companies dependability of the mighty ones

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It has been usually seen in many industries that the big fish eat away the businesses of small fishes that try to enlarge their business. As far as the mighty companies are comfortable with the existence of the small companies around them, they will not hurt them but the moment they see the smaller companies trying to take some giant steps, this is when they get into action and try every possible thing to ruin their future prospects. Well, this is definitely not ethical but the irony is that it happens in every possible industry.

However, the big companies should remember that if they try to hurt the prospects of the smaller companies in an unethical manner, this can have repercussion on their business as well. The construction industry saw a lot of such happenings a couple of decades ago. However, it seems that now things are pretty stable when it comes to snatching away businesses of others. The small companies do not try to get in the way of the mighty ones and the big companies also seek the co-operation of the smaller guys in a big construction project.

The big companies have by now understood that it is not monetarily feasible for them to acquire heavy equipment as per the requirement of the project. Every other project may require a different kind of heavy equipment. This means that they can’t go on a shopping spree whenever they get a big project to work on. What they do is they include the co-operation of small companies who with the help of their limited arsenal of heavy equipment get into the work and as the project advances and it requires machines that are not usually possessed by small companies, the big companies then take the charge.

It is then that the big companies who have taken the project steps in towards the completion of work. This in many ways has been observed as a very healthy practice by many industry experts who believe that inclusion of small players not only gives the exposure in how to manage big projects but also prepares them to take bigger challenges in life.

This has led to many small construction companies to take up individual projects and also assist the big companies in completing theirs. A price of the work is quoted in the beginning and then other companies place their bids. The most affordable bid is taken into consideration for picking the most deserving company. Here the big companies should make sure that they pay the contractors for their services in full or else the contractors have complete authority to place lien on the project. This means that the construction company that has taken the work will no longer be able to deliver the work lien free and the end user will not be able to buy them keeping it as a mortgage.

The construction company will not want to get into such legal tussles and should settle any monetary issue calmly.

 

Success tips for small construction companies

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We all believe that nothing can substitute hard work. People who are willing to work hard can achieve success. But just working hard can really make you a successful person is a question that many ponder but yet to come up with an answer. No doubt that one needs to work hard but that is kind of pre-requisite. In today’s time where you see enough competition across all industries and where everybody is willing to work hard and give their 100%, you need to do something extra that will display you in a different league. We all want to know what is that “Something Different” that is required to do so that we do not end up one amongst the crowd. There are some tips that people follow which makes them different from others and eventually helps them achieve success.

Small construction companies who dream to become big someday or the other need to follow certain tips religiously. These tips will help them and for that matter will help anybody who has a startup company and wants to see it to grow.

Don’t venture into something that you don’t know:-

We know that guys who have the ability to take risk will benefit the most in the construction business but that does not mean that you take unnecessary and unwanted risk. When we talk about risk taking ability, we mean guys who have the ability to take calculated risk and you can take calculated risk only if you know the stuff that you are getting into. Never get inside a tunnel without any light. You will end up bumping. If you come across an opportunity that you feel is a bit challenging but also prolific, try to know more about the opportunity. Also analyze the pros and cons before you dive in. Try to know as much as you can and take advice from people who know about the stuff.

Invest your money wisely:-

Investing your money in your business should be backed by thorough research and a couple of good brain storming sessions. You will come across lot of opportunities but it is you to decide which one you want to pick and which one to duck. Every opportunity may sound to be enticing but it also has a catch along with it. You got to understand that and then need to prepare yourself accordingly.

Stress is lethal for success:-

If you are overworked, it is bad but if you remain stressed all the time, it is worse for your business. An owner of a construction company goes through lot of ordeal and that is perhaps the part of his job. He needs to take his work seriously but should not feel stressed. Stress will block your ability to think rationally and this is where you begin to take decisions that are not healthy for your company. So relax and enjoy every moment of your work even if you incur loss in your business. Do not let it affect your mind. Just remember the mistakes and try to repeat it.

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Small construction companies should be cautious to make big investments

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The focus of business changes in every stage. While you are a small business, the focus point of the business is something else and while it begins to grow the focus changes again. In a nutshell you can’t have the same strategy throughout the lifetime of the business. You have to keep on changing your focus, goals and strategies with the development of the business and also keeping into consideration the circumstances your business is in. In business you are supposed to take challenges and risks and it pays you off in terms of profits but at what stage are you taking what amount of risk is crucial to understand. You just can’t take any amount of risk during the budding stage of your business. Risks should always be calculated and not taken with an unsound mind. It actually defines the future potential of your business. Taking uncalculated risk will often lead you to a situation where you will see no point of return and may have to probably shut your dream of having a business of your own for once and for all.

Construction business is one such business where taking a wrong call can have serious implications on the future growth of the business. There are many big companies who had to shut down their business for taking incorrect investment decisions which has obviously proved them to be costly. Small construction companies have to ultra-careful when they think of making any big investments in their business. They usually experience the problem of scarcity of finance and on top of that if they contemplate of making any big investments for which they will obviously have to look for borrowing money from banks, they got to be very sure of the outcome. This is where their calculation can’t go wrong because they have huge stakes involved here. Unable to repay the debts will definitely have a negative impact on the credit rating of the company which will result in not getting any further loans.

Big investments do not only get restricted to buying abundance of raw materials or heavy equipment. It means much more than that. It also means investing on workforce, setting up a new office and stuff. Being a small construction company, when you are hiring a lot of people and buying different kinds of heavy equipment, you got to doubly sure that the investments will pay you. The construction project for which you have been hiring so many men should not have any lien on it and certainly no litigation on the property. The bottom-line is you got to ensure that the piece of land on which the construction project will begin is absolutely problem free and once you are assured of that, making this big investment makes sense.

Small construction companies are more at risk because if they try to play solo, the big companies may create problems for them. It is a competitive world and no one wants to let the other grow easily.

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Small construction companies should deploy used heavy equipment

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It is quite difficult to start up a new business and especially when someone tries to establish his business in the construction arena, it becomes all the more difficult for him. Firstly, there are many big players who have ruled the market for years and on top of that, there are many small companies who take the business that the big companies are not interested in. Now, when they see someone new coming in, they feel more uncomfortable and may try to put hurdles in your way. This is something that happens in every business but as far as the construction industry is concerned, this sort of stuff happens more often than ever. If someone is brave enough to take up this challenge, there is something harder waiting. They may have a hard time deciding if they should go for brand new heavy equipment or they should content themselves with used machines. Getting a brand new machine is no joke as it will cost thousands of dollars to buy one, may have to borrow the money.

This may really sound scary because if you lose paying up the due in time, they may impose a penalty on your loan amount which will make it a bigger sum. Just in case, you default in making payments too often, it will not only damage your credit score but you may also lose your hold over the equipment. In totality, you may have to completely shut down your business. Now, there is something simpler. Big construction companies do not tend use a machine for many years and they usually sell it off to small companies at a lower price. All you need to do is try to establish a contact with such big houses and try to buy the machine at dirt cheap price.

The above option may have some limitations. First, you have to buy anything that they are selling without even getting the time to inspect the machine. It means that you take whatever they give to you without having the power to even check if the machine is in order or not. Simultaneously, since there are many buyers like you interested to buy the item, you may know what you are buying only at the time when you are buying the equipment.  To avoid such a situation, there are platforms like online stores that sell used equipment. All you need to do is register yourself on their site and bid on the item. Try to place the highest bid and concurrently try to establish contact with the seller. Let the seller know that you want to inspect the item before you buy them. If the seller agrees to this, you can check the machine is in good order and strike the deal.

How Can Small Construction Companies Stay In The Picture? – Mistakes They Need To Avoid and Steps That They Need To Take

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Do the massive structure of buildings and bridges attract you to no end? Have you always been fascinated with the way these great structures of urban living are brought to life? If yes, then the construction industry is definitely your call. However, before you set foot in the arena, it would be worthwhile to find out all that you can about surviving in the market as a start up.

Why Are Small Construction Companies Finding It So Difficult To Survive The Market?

  • The one thing that construction entrepreneurs need to understand in this regard is that there are loads of construction companies on the block. And people prefer investing into construction companies that are well established and have a good name in the market. Small and start up construction enterprises, therefore, find it difficult to get a foothold in the entire picture.
  • Another factor affecting the business of the small construction firms are the expenses involved in the smooth operation of the firm. Financial aspects such as bank loans often prove to be a hurdle. Along with this, there is also the fact that small companies often find it difficult to decide the correct area for investing money and as a result incur significant amount of losses.
  • There is also the global economic picture that has to be taken into account in this context. It is often seen that small construction companies are unable to keep with the economic fluctuations of the global market and as a result, they soon disappear from the picture.
  • There is also the fact that many of the small construction companies do not bother about gaining a bit of work experience before they start their company. Consequently, the construction company gets eaten up by big giants of the industry.

Running a Construction Company Successfully

So, the next question that needs consideration is how can these small construction companies survive this battle? How will they ensure that they gain a stable foothold in the market?

  • Effective management is one of the key strategies to succeed in the construction arena. The more efficiently you will be able to manage your construction organization, the more easily will you be able to gain a foothold in the market.
  • Finances are another important aspect of succeeding in this field. Make sure that you invest into those things that will prove to be beneficial for your organization in the long run. Construction equipment, such as the heavy machinery and other raw materials should be chosen with absolute care and prudence. (Maybe rent from B&R Equipment)
  • It is also important to attract the attention of the clients towards your company and the best way that you can go about this is by advertising yourself widely and in the correct manner. It would also do well if you set your eyes on achieving long term stability instead of going for short term profit.
  • Having a certain amount of hands on experience often proves to be of great help- construction entrepreneurs will then know the tricks of the trade and thus, will be able to go about things in a much easier manner.