Tag Archives: Construction Company

Hurdles one faces while setting up a construction company

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Starting up any new business is a tough task. It becomes tougher for the ones who do not have much or any experience in handling the business thus making the entire process extremely painful. In addition to this, it become arduous to keep the present business running as there are chances of facing severe ups and downs in every phase and leap that you take. Like any other business, setting up of a construction company is filled with risk and hard work. You also need to be foresighted and got to assume things appropriately so that if you see a threat you can counter it in advance.

Hurdles are plenty in the construction industry. However, it also gives you a ray of hope which is more than enough to sustain in a dynamic industry like this. So the crux of the matter is how well you can adapt to the ever changing phenomena of this industry and how quickly you can recognize the internal as well as the external threats that may destroy your dream of owning a construction business.

Legal concerns:-

While setting up a company, there are a lot of legal formalities that one needs to complete without which it will not be possible to run a business in US. These legal formalities can be lengthy at times and therefore you need to know the right way to get your work done at the shortest possible time. You might want to take help of an attorney who will guide you with every step and get things done for you. Getting sanctions from the government may not be a huge hurdle but it definitely takes some time of yours to get you started.

Setting up an office and a small team:-

Once you have received the sanctions, the next step will be to set up an office and also have a small team in place. You got to hunt down for a place that you can use it as an office and also recruit few men who have worked in the construction industry. If you have little experience in this domain, you will be able to pick the right guys but if you are a newbie then things might get really complicated.

Buying heavy equipment:-

In order to get a small project, you need to have a couple of heavy equipment. Now you have the choice of either buying them or taking it on rent. If you plan to buy them you have to shell out good chunk of money but if you take it on rent you need to ensure that you have sufficient reserves every month to pay the rental amount. Other than this, buying the right machine is always a challenge especially if you are going for second hand ones.

Running the office:-

You got to pay salary to your team and also meet the office expenses that will recur month after month. This means that you got to have ample reserves in hand. It is to be noted that you do not get a project the next day you set up your office. It takes lot of time to get some small work. So maintain your business becomes a big hurdle.

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Making of a mighty construction company

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Construction is a lucrative business. Although many entrepreneurs start this business as, yet it is only 10% who make it very big in terms business to become brand names. These construction companies do not achieve success overnight but they have done diligent business planning to become ‘Mighty’ in this field. Experts have observed some common traits among these super achievers as:

  1. Clear aims and objectives: They know what they want to achieve and have noted it down and hold onto that vision. They are aware of their mission, vision and values. This allows them to maximize resources of time, energy to achieve big monetary returns in future.
  2. Planning: Construction involves a lot of work and it has to be done with a responsibility. They understand the importance of planning, systems, and processes need to be place in business. They plan their work to perform it systematically and they also work according to their plans to be successful.
  3. Updated: They are aware about the market trends in construction and try to adjust themselves as per the situation. They also spend time with people who will support their ideas and from whom they can get suggestions. They participate in healthy discussions to be successful in their ventures.
  4. Well-qualified professionals: They hire excellent staff and managers for smooth and effective functioning of organization. They pay them well, train them in latest technologies and give them good work-life balance. They also hire the right type of people who will perform their work very dedication. They know that hiring of cheap labour will lead to mediocrity and work will suffer and will lead to loss in the future.
  5. Designing Effective Business Strategy: In order to win over rivals in business, they have make appropriate preparations and checklists. They always provide excellent and superior quality service. Further, they know strengths and weakness of their employees. Employees are informed about their weakness and are suggested to be improved.
  6. Defensive business strategy: The costs cover the equipment, vehicle, labor, registration or business licensing, surety bond, and insurance requires a lot of finance. They do not depend on loans abut have saved enough which ensures that this excess money will help them in difficult times.
  7. Effective sales and marketing: Just providing good services is not enough, as its awareness has to be created. Hence, they hire good sales people. In addition, they also get onto social media such as Facebook, Twitter, and sending text messages to get into business leads.
  8. Business Transactions: While performing different transactions, they are diligent and vigilant. They do not sign on any papers to avoid getting them into trouble.
  9. Customer satisfaction: Since they value their customers, they listen to them, reply to their queries and concerns about product. They try to modify or improve their services to please the customers. This increases their customer base. They value professionalism and empathy which makes them customer loyal and successful in business.

Overall while making a mighty construction business they are aware that is a multidimensional business which requires a lot of planning and detailing to ensure success.

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Water crisis can have serious impact on the construction industry

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This summer has dried up many lakes and water bodies in many parts of the country. Not only US but many countries all around the world are facing severe water shortage and are finding it difficult to sustain. Agriculture sector that depends primarily on rain water is not doing well because of acute deficiency and most likely the prices of agricultural products will shoot up considerably in the coming days. So is it only affecting the agricultural sector in a major way or are there any other industry as well that is being hit hard by this issue. Water which is such an important component in our day to day lives, scarcity of it can affect many industries and some of the most profitable industries can take a backseat as far as their businesses are concerned. One such industry is the construction industry can is currently facing the brunt of water shortage.

Water is required in immense quantity in a construction site. Not just for keeping the employees hydrated but also for other purposes like mixing cement with sand, spraying water on the ground to restrict the flow of dust on the site etc. It is also required to clean heavy equipment and lot of water is required for that purpose. Fluctuation in the price of fuel has a big impact on this industry but shortage of water can have ever lasting impact on many big construction companies. You need fuel to run heavy equipment but you need water to meet every small need of yours which can’t be compensated by any other component. Countries in the gulf are paying a heavy price to port water from their sources to the construction site which is why the prices of the final product is relatively higher.

A big construction company has to spend a lot on aqua and if it is in crisis then they may even experience shutting down of projects. His workforce will need water to drink and if he can’t even provide that basic necessity he will soon find people leaving his company. But the fact is drinking water has never been such a big issue in this country. The construction labors are able to get drinking water while they are at the jobsite. The problem is with water that is needed for construction purpose. There they might feel the pinch and it will definitely pain a lot.

Many parts of Asia and South America, the construction sector has already taken a backseat due to scarcity of water. The government in some countries has curtailed the use of water for construction purposes which had a big impact on the overall sector. Though they understand that the crisis is not going to be forever and till the time it does not rain, the problem might remain. However, once it starts raining, things might come back to normal. But the important part is to sustain till the time it is not monsoon.

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Starting a construction company in another country

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Starting a business in your home country may not be a bigger problem as compared to doing it in an alien country. You know the rules and regulations that is required to follow if you want to start a business in your country but the rules changes when you move out of your country to some foreign location and think about starting your business there. Though it may sound difficult but there are many companies who have managed to successfully set their base in a foreign land and are doing really well out there. Starting a construction company may sound to be a difficult job but as a matter of fact many countries want foreign enterprises to come to their nation and be a part of their success journey. In return you can get to use their resources and also make good money out of the deal.

Before you think of setting up your venture in some foreign land, there are few things that you should know and implement it in your strategy.

Importance given to the construction domain:-

It is important to know the government’s determination and thoughts about the construction industry as a whole. Governments in some countries may focus on agriculture more than anything else. So it will be futile to set up a construction business out there. So try to know the government’s agenda for the nation before you try to set up anything out there. Some countries are rich in minerals so setting up a mining company makes lot of sense. For that you need to have a bit of experience in the mining industry or you know someone on whom you can vouch and can make inroads in that country. Many African countries are rich in minerals and they can prove to be a great destination for mining companies. They can see a lot of potential out there. As far as construction is concerned, there are many Gulf nations where you can set your business and can expect you go a long way.

Employment opportunities to their people:-

Getting permission may not be difficult if you can manage to convince the government that by allowing you to establish the construction business on their land, it will create lot of job opportunities to its people. It will also lead to the usher of other sectors. For instance, you can construct a pharmaceutical company or a commercial complex which will further employ more people. It is a kind of win-win situation for both of you. The government will for sure take this point and you will get the sanction to start up your company out there. You should also consider the taxation laws of the country and check if you can get any sort of concessions on it.

Legal advice is important:-

Every country has its own legal hassles when it comes to setting up a business. So you need to hunt down a competent attorney who can guide you through the different laws and advice you on how to avoid hiccups that may come your way.

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Administrative and finance are two crucial departments of a construction company

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Every company has few very crucial departments without which the functioning of the company is unthinkable. Like ways, the two most important departments of a construction company can unarguably be the administrative and the finance department. It is perhaps after the consultation from the head of these 2 departments that the company can take any major decisions. If either of these departments does not give their nod, there are high chances of non-happening of an activity. If heavy equipment and construction laborers are two vital parts of a construction company on the field then the admin and the finance departments are another two vital departments off the field.

A person who wants to establish his own construction company needs to understand the workings of these two departments thoroughly and once he/she is confident that he/she can take vital decisions after understanding the functioning of both the departments, he/she should go ahead. Rest of the important parts like knowing about heavy equipment, what machine is needed for which purpose can be advised by other professionals but there is no expert per say when it comes to the finance and the admin departments. No one can guide you accurately when it comes to the finance section as they do not know your business plan and the capital you have for investment.

If only someone knows about your business plans, they will be in a position to guide you. This work is ideally done by the Head of Department of the finance section since he/she knows about most of the projects the company is working on. However, if you are the owner of small sized or medium sized construction company then you probably not be able to afford an expert and qualified person who would be heading the finance department. It is perhaps you who have to take the lead and take all the important decisions. You will definitely be having few men working under you but they can only help you with data, the rest will be your call. Therefore it is necessary to understand how both these departments work so that you have a fair idea as to where the company is heading.

The work of the admin team is primarily restricted to taking care of the employees by providing them with all the necessary means that will enable them to work in a safe environment. In case, if the employee has any problem, the first point of contact he will approach is the admin team who in turn will check how to get that resolved.

If there is any monetary involvement in sorting out the problem then they might then get in touch with the finance team and check what can be done. If it pertains to any other issue that doesn’t seek the requirement of the finance team, then the process may become a lot simpler. However, it has been witnessed in most of the cases the admin team has to work in sync with the finance team and vice-versa making them the 2 most important pillar of the construction company.

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Making of a construction company

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It may sound hard to begin a business when you do not have much experience on how to run it. It will in fact be quite difficult for you to sustain the initial few years and this is to be considered the most crucial period of any business setup. It is during this time that you experience too much of turbulence in your business and many people are compelled to shut their shops. But the one who are able to make it through these rough times are the one who are set to make history. The beginning of a construction business is no different and one has to go through the hardships which a person from some other industry goes through. However, what one needs to understand is till how long they have to experience the turbulence before finding the shore.  For this one needs to ensure that he has the right frame of mind and a sound financial backup that will help through his journey of setting up a mighty construction company.

Know how the industry functions:-

In order to run your business successfully, it is quite imperative to understand how the overall industry functions at ground level. Without knowing much about the industry, it will be futile to go any further with your business. It may lead to severe complications that may catch unaware. Things like how you can take a project, what prerequisites are required, the kind of expectation that one can set upon you and what you can do to fulfill those expectations are crucial. Running a construction business is not a easy one and involves lot of technicalities that the one who runs it should understand and also apply it well.

A bit of experience is always helpful:-

A person who knows how to deal with challenges and overcome them is the one who will find his place in the construction domain. Having little experience on how to run the business is crucial. It actually teaches you to deal with different types of situations in an effective manner without ruining your daily affairs. It also helps to learn to maintain good relation with your clients even when you have surrounded with different forms of challenges some thrown by the clients themselves. It is never easy to keep your clients satisfied as they always expect more from you. But to know the way to keep them content is an art that one can learn only through experience.

Have sound financial backing:-

This is perhaps one of the most important criteria one must consider. Every affair of your business in co-related to finance. You get projects keeping into deliberation the strong financial backing you have to complete the project on time. Your clients gives you work after they are satisfied that you have the resource to pay salary to your employees. You have to buy heavy equipments and that costs you a bomb. Therefore having a strong financial backup or some sort of reserve is imperative when you are about to begin a construction company.

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Mistakes a construction company should avoid doing

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Humans are bound to do mistakes in their lives and so do they also learn from it. Mistakes can happen in any industry and in any profession but there are some mistakes that can be avoided and one will never want them to happen. Mistakes are certainly not pardonable in professions where you just can’t afford to make mistakes. Doctors for that matter are bound to make no mistakes. Similarly, we expect the same from a pilot. But there are others industries where a mistake made, may not be life threatening but can definitely lead to severe loses and one can only try to avoid them. Construction industry is one such industry where you commit a major error and you got to be ready to pay a big price for it. There are few grave mistakes that one should avoid making especially when he is part of the construction segment.

Safety of employees should never be compromised:-

You can’t take human lives for granted come what may. People who are working for you are your men and it becomes your moral responsibility to safeguard their interests and their lives. Therefore, you should provide them with all the equipment and trainings that will keep them safe and sound. By no means should the safety of the employees be compromised. This can pose a big threat to the future prospects of the company and if reported to the concerned authority, you may even have to pay the price by leaving the project or by paying a hefty penalty. Also when you know that a job needs the attention of expert workers, you should know deploy men who are not trained for that job. They may end up injuring themselves.

Title should be clean:-

When you take a new project, you should ensure that the title on the property is clean and it does not have any disputes. These things should be done before you take up the work. In case you are a contractor then knowing about the title will help you to determine where you are heading. You should always keep your hands off from any disputed projects as that will lead you to complications. Check with the title company if there is any dispute on the property and if the title owners are the ones you have been informed holds the property. Projects are held up for years due to non-clearance of title and have become a matter of huge concern.

Never miss out on your finances­:-

The financial part of the company plays an important role in determining where the company is heading. Construction companies are known for not able to keep a tab on their finances. Money is needed to buy raw materials, heavy equipment, paying salaries to employees and taking care of other operating expenses but it all should be recorded or else you will not have any clue where your money went and what you can do to prevent unwanted expenses. Keeping a log of all your transactions is the need of the hour for every construction company and it may turn out to be a big mistake if not managed at the right time.

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Performance plays a vital role in establishing the goodwill of a construction company

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A construction company requires businesses to survive and they get their businesses from the reputation they have earned for the last many years working with different clients. In the construction industry earning a goodwill is extremely difficult and it is more difficult to maintain it. One mistake (you do not know if the mistake is big or small) can tarnish your reputation and has the potential to bring down your business to a new low. If a thing like this happens, you will have a real hard time to survive and bring it up again. This sector has less friends and more foes.

Animosity in this industry is quick to happen and can turn real severe with bad results. It is very imperative to have cordial relations with your business clients, with your competitors and with people who want to get associated with you in your business but you want to stay some distance away from them. Oh yes, you definitely want to stay away from some people as you may see them to pose possible complications in your business. However, you still can’t manage to upset anybody or else you seem to be in a position where you would be inviting problems.

We will be talking in length about what one needs to do to establish a good reputation and keep the good name to continue getting more businesses.

Company should have a vision:-

You will get clients when you show them that you are a company with a vision. You need to have the right set of heavy equipment, operators and workers that knows their work well. A good strategy is always important to put things on the right track. The better you lay down the strategy, more are the chances that you end up getting good businesses. If you have your things organized, people will take that as a sign of a serious businessman and someone who is in this trade to become really big.

Track your plans and ensure that they are acted upon in a timely manner:-

Creating a strategy isn’t enough but you got to follow it religiously. If you act upon your plans and implement them, you are getting yourself closer to creating a goodwill that will eventually draw upon more businesses making your company a highly profitable one. There are instances when you see the need to amend your plans. You should be quite flexible with any kind of changes that comes up your way at any point in time. At times, you have to change a part of the plan completely. You should be ready for all the challenges. If you are able to keep a control on these few things, you will see your business is completely in your grasp and your clients will have the confidence to invest their money in your company by giving projects to you.

Take work that requires a sense of responsibility:-

If you take up projects that requires you to show some responsibility and you succeed in completing it in time, you manage to set up a very good reputation for your company. Work like these will take you a long way ahead in life and will help you to establish the goodwill that many companies have only dreamt of making.

 

Make way for new talents in your construction company

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Talents are much needed resource for the growth and development of any economy. So right from running a small grocery store to operating a mighty construction company, the need of fresh talent is highly important. It has been witnessed that companies ideally want to hire experienced people rather than picking up young boys for the job. They feel that the experienced lots know their job well and will fulfill their duties honestly. They for some reason do not have the same faith with the young population. Well this is not a healthy sign because after a certain period of time you will face shortage of employees and will then be forced to hire guys who know nothing about the work you are engaged in. Therefore it makes more sense to hire young talents and train them so that they can become an asset for you and contribute towards the growth of your company.

There are institutions that train the young guns on heavy machinery. They produce competent operators but the only thing that they lack is experience. They can’t gather experience if they do not get the opportunity to work with some company. All they need is a chance to display their talent. They may induce new ways of working that can prove to be beneficial for the company as a whole. So when you see that your company is growing and you need men to work, make way for young talents. Similarly also hire experienced guys but the number of experienced and inexperienced guys should be proportionate.

Since the young guys lack experience, all they need is bit of support and they have the ability to stand on their feet. They need a bit of help from the guys who knows the work and this is how they can mold themselves into a better workforce. Hiring new talents is also beneficial in terms of saving revenue for the company. You do not have to pay more for their services as they are in learning mode. That does not mean that you have got the right to exploit them. The wages should be discussed with them and should be at par with industry standards. You can then check the ones who are performing and should simultaneously increase their wages. Pay them for their hard work. They truly deserve every bit of it.

Being the owner of a construction company, you should give clear instructions to the tenured guys on how they should behave with the new ones. Instruct them to be polite with them. They are bound to make mistakes as they are in the learning phase but that should not give the experienced lots the opportunity to take the young guys at task. Your instructions will ultimately make a favorable condition for your employees. They will regard your values and will hold you high. The policies of the company pertaining to new talents should be crystal clear and you should ensure that they are followed religiously.

Engage with your employees to make a construction company successful

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The success of any business is sheer hard work and the way you engage with your employees. Working hard is just one part of the success story but there is more that makes a business successful. People owning a construction business may understand the importance of talking regularly with the employees. They got to check if the people working in his company are happy working there or do they need any sort of benefits or require any upgrade in the heavy equipment. Not talking with your employees on a regular basis can make them feel that you do not care for them any longer and you only need them to get your work done. That actually puts you in a very negative frame as people may take you as a self-centered and selfish person. Therefore, you should make sure that you come down to meet with your employees at least once in a month and check about their well-being. It is not possible for you to remember each and everybody’s names but try to remember few of them. This might give them the feeling that you indeed care for them.

 

Engaging with your employees can be fruitful to your company in a number of ways.

It sets up a long lasting bonding:-

Setting up a healthy relationship is important for the success of any business. It is very crucial to set up a strong bonding with the people with whom you will be working day in and day out. It may be possible that you would be working from a remote site and would be monitoring their performances from that location but still you will be part of the same team that aims towards taking the company to the zenith. This motive of yours is only possible if you establish a strong bonding with your employees. They are the ones who have the potential to make or break your company. See that all their needs are fulfilled and they return home happily with the enthusiasm to come again to work the other day. If you engage regularly with your employees, it will help in setting up the bonding that is needed for the success of your business.

Employees will be dedicated to their work:-

A person can work hard only when he is dedicated to do so and what will make your employee dedicated towards his work. The answer to this lies again on the way you set up your relationship with them. If you are in good terms with your employees and do everything to keep them happy, they in turn will be more inclined to their job but if you are not good with them, they might act as a troublemaker for you. That is no way going to be healthy for your company and you should avoid any situation where there is any confrontation with your employees. On the contrary, you should seek ways by which you can solve their problems if they have any and try to get them back to work.

 

 

 

 

 

 

 

 

 

 

 

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