Trust is an important factor in any form of business. You got to trust the person before you start working with him and if you are not able to generate the trust and comfort then it makes no point in working along with them. At some point or the other you will get stressed up and you will have to do away with the other guy. When you are entering into a partnership with a person you do not know much about, you got to be very cautious. Ideally, it is recommended that you do not get into any partnership with an unknown person but in case if you have to then you are needed to remain ultra-careful and monitor his business activities. You should not trust the person by not knowing him in complete or else it might lead you to serious issues.
There is a popular saying in the construction world. “Do not trust an unknown person. He carries with him the potential to back-bite you”. This is very much a possibility in an industry where there is cut throat competition all over the place and people are ready to negotiate with their ethics without giving a second thought. Since the construction business has been considered such a rewarding business many people are turning into it to make it their career. They will often consider toppling anybody that they see as a potential competitor and therefore if you think of getting into partnership with one such person you will regret it for the rest of your life.
Contractors in specific can cause you more harm than others. They are the ones who do most of the work in a project for you and are paid as per the contract. Now if you get engaged with a contractor that you do not know much about and he does not intend to do his work properly and is associated with you to make some easy money by doing shabby work, it can lead you to serious problems. It is therefore important to know the credentials of a contractor before you give him the contract.
You need to know if he has worked previously in any such project and try to get his conduct from that company. Such information can be availed with ease. Construction companies do mind giving out conduct report about a specific contractor as they understand that the contractor is not bound to work with just one construction company. They can work with multiple companies at the same time. So if the contractor is worth getting some work, you will be informed about it or else they will give you a negative report.
If you have been working with a contractor for a long time and you know his quality of work is splendid that generates a certain degree of trust in you and you can focus on other stuffs by submitting the entire assignment to him but this can’t be done in case of an unknown contractor with whom you have been working for the first or perhaps the second time.
If you are thinking to not pay your contractors for their job for whatever reason, you should think twice about it. You may find their work to be of poor quality but when you see the progress of the construction, you can let the contractors know that you do not like their work and they need to focus more on the quality part. Just not paying them their dues can drive you into serious problems. The contractor can place a lien on the construction property and can make the entire thing quite messy for you. It is better to counter them upfront and tell them you do not like their work rather than not paying them their dues.
Let us first understand what a lien on a property is all about. Having first lien on a property means that it completely belongs to you and in case if you want to sell it off and go back home with all the cash you are free to do so. Now if someone puts a lien on your property, it means that if you sell the place you can’t get away with the entire cash amount. You have to first clear the dues of the person/entity that has put the lien on your property and then whatever is left belongs to you. It eventually means that you do not have the absolute right on the property.
This is perhaps just the tip of the iceberg. You may be further entangled with more such complications that will act as a big distraction in your business. Your credit rating goes for a toss. You are also not able to refinance the property with any financial institution. This means that you can’t even keep this place as LAP (Loan Against Property). Moreover, when you are letting you the construction work to a contractor and if he sub-lets it to another contractor, you need to ensure that the contractor pays all the dues to the sub contractor or else that particular person will place a lien on your property. It simply means that whosoever person who has any interest in your property can place a lien on it if their dues are not paid.
In case you come across a contractor who does not carry a good record and you unfortunately give the work to him. In this case, you got to be absolutely sure that you keep records of your payments to him. Such people can create nuisance even after they have received all their dues. In case you are clean, you hire an attorney who will take such guys to task. But before you hire any contractor, it is important that you do a research on their conduct. You can check things like how long they are into this business and how their relations have been with other construction companies. You can check with people in your business circles and hire someone who will not unnecessarily put liens on the property to create problems for you.
Podcast: Play in new window | Download | Embed
Subscribe: iTunes | Android |
Every business has its own ups and downs and people who own a business have to go through several challenges in order to survive in it. Similarly, construction business is all about taking up challenges coming from various corners and turning every calamity into a possible opportunity. Well this defines your character and the temperament you have got. This will also define if you will be able to carry on for long in this industry. Many join the construction business thinking that it is easy money. People who think this way have never been a part of this industry before and one who has been a part will never think this way.
They fear to broaden their horizons:-
Some contractors are doing marvelously in their area but when it comes to expand their business and move to other states, they catch cold feet thinking about it. They may have to overcome a lot of difficulties and uncertainties but that is part of the game and since they have created their comfort zone in the place they are operating then someone else might come there who will be a bigger player and might eat up the small fish. This is a stark reality of this industry. No one is secure in this form of a business and this is why it is important for contractors to expand their wings and think of flying higher. Differences in regulations and laws between the states will persist but when you start to get into it you will find that most of the laws of the other state that you are venturing in is the same as it is in your state. There may few minute differences but apart from that everything else will be common.
Trustworthy laborers are a real challenge:-
Construction workers are hard to find especially when there are big companies who are picking them for a better package. Contractors are losing their men to these big companies and hence find this to be a bigger threat than anything else. Well, the solution for this is quite simple. You need to increase the pay of your skilled labor. Workers ideally do not want to leave their existing employer if they are paid as per the industry standards. They know their worth for sure and it is time that contractors too know their worth. Once you begin to pay them like others do you will rarely see the laborers leaving your company?
Embrace technology with both hands:-
The sooner you befriend technology the better it will be for you and for your business. Right from having the latest device on your heavy equipment to creating a website that is visible to everyone, you need to ensure that you do not lack a bit when it comes to using technological applications. Get hold of a website designer who has created websites of construction companies and other contractors. Such guys will know the kind of stuff you need in your website and therefore will make the best for you.
Buy Now on eBay
Podcast: Play in new window | Download | Embed
Subscribe: iTunes | Android |
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.