It is not easy to operate a construction company. There are many pitfalls and ways to lose money, but if you follow some basic steps, you can not only live but be very wealthy. Many successful construction contractors have learned that there are things that you absolutely must do and you must acquire or gain some skills to do this in a highly competitive industry. In this article, I summarize what is the importance of a successful construction contractor.
The Most Important Factor: Experience Hand
Do not consider building a contractor unless you have at least five years of extensive (general, non-specialized) building experience. The only exception is if you intend to specialize in one area and one area only. This is called niche. Niches can be very profitable, but they can go, change or replace technology, new products, industry changes, or social changes. The best chance for success in the main contractor business is to gain experience in doing everything. This general experience has many benefits. It enables you to identify and hire competent individuals, ignite incompetent people, evaluate good work, and identify bad work. Probably the most important thing you give is the ability to become a technician to become a manager. The best experience comes from small and medium-sized construction companies that require you to be involved in all trades. Larger companies tend to get stuck in the compartment. It's okay if your business model is a slice, but if you start a general entrepreneurship business in just a few niche, you will not succeed if you do not take up your weaknesses.
The Second Most Important Factor: An Outstanding Accounting System
If you do not have a reliable accounting system, the construction company will fail at last. This CPA has witnessed too many times as I say. Reliable accounting systems allow you to assess whether you get a job without a job at work. The intestinal system is dangerous and risky. A reliable accounting system helps you identify the things you do well done on each job and the errors you make. Numbers do not lie. Unfortunately, my experiences show that most construction contractors pay little attention to their accounting system. There is a fear that proper accounting will set the business up for higher taxes. Thus, cash received and cash disbursed for work do not occur to avoid tax. What a mistake. I do not care how big your desire to work for any job, if you do not count each penny, you can certainly be sure you are flying blindly and losing money for any job. You go out of business and suffer from your family life. If you decide to start your own business, you must act as a professional business owner and create a reliable accounting system.
The third most important factor: effective management
If you have industry experience who for many years (at least five years) forge the construction business from all sides of the job, you can better get the technician to the leader. Effective management requires the company to conduct reliable procedures in many ways. Well-defined work product processes as well as accompanying task-specific checklists allow employees to perform the job in each job. The workpiece process for the workspace and the accompanying checklists on the workplace must provide you with all the important tasks. This eliminates the human error and makes corrections before the task is officially completed. This is the # 1 management tool of the owners of a construction company. Each task and every task needs to work out a process. This process must be written in writing and stored for each task in binder, along with the task checklist. The task checklist must be set to a calendar. The binder of your work must include:
1. tab – A signed contract and a copy of the changes.
Table 2 – Budget for Work. Budget for any change.
Table 3 – Accounting for Revenues and Expenditures. The revenue section includes the contracted bid price, the funds received as a deposit or the completion of the project sections and the funds received for the change orders.
Sheet 4 – Summary of Task List.
Sheet 5 – Task 1: Process Component and Checklist.
Table 6 – Task 2 – Process Component and Checklist.
Last Tab – Customer signs a completed job posting letter and a standard recommended letter signed by the customer listing the customer's name and contact information, and gives permission to use the marketing recommendation and prospective clients as a reference. You can copy a copy of each recommended letter to a separate binding material that will take you to each prospect. This advisory binder can be the only one that separates you from the competition. It ensures the prospects that it takes customer satisfaction very seriously and can be the maker of the difference. It allows viewers to have access to previous clients to obtain references. It also shows that the company is very organized and works well. Finally, read the picture before and after each job in this binder.
Fourth Key Factor: Strong Business Partnerships
Co-operative, competent subcontractors with many years of experience are stable in the key position. Each job is a team effort and a network of competent individuals / companies available at each workplace and who understand the process of the business, all work is done much more efficiently. Efficiency and Competence = Profit in All Work
Fifth Key Factor: A Probation Process
You may be the most skilled and successful construction company with stable talented subcontractors and still leaving business without a vigorous process of bidding for each job . You can lose the shirt if you miss a job. How is this done? The most common reason for underestimation is not the homework, rather than the failure to check audits and the duplicate control of each cost of each task, rather than the homework, or the verified estimate. The devil is in any construction work in the details. The bidding process is very similar to your business plans for every business. Each task must determine, all costs and all costs must be checked and checked twice before bidding. Where many construction contractors are wrong, incorrect estimates of the costs of the tasks. These improper estimates are caused by erroneous assumptions and the associated costs, which is the result of an inadequate control and re-verification of all tasks and costs. This is an impeccable process, but you have to get the offer. The assumptions about each task should be checked once, but at least twice. You know the rule: measure it twice to cut it once. This ad is especially true of the bidding process.
The sixth most important factor: Marketing
Everyone in the construction industry understands the importance of referrals. Most of the prospective customers come by means of a referral. But the links are not enough. What should be part of the marketing tool belt?
first You must provide an active web site that includes customer recommendations at the top and center.
2. Join a network group.
3. Join a non-governmental organization.
4. You must provide valuable help to non-profit groups in the local community (one or two may be sufficient).
5. You must have a regular bidding process that is not reference-based
6. You must have a very straight forward mailing.
7. You must have a business card, fixed, on-site signs.
8. Advertise on yellow pages or local newspapers.
9. Client Customer Service Binding (referenced above).
Seventh Key Factor: Maintain Technology and Replace Equipment Mounting / Devices
Upgrade equipment and tools to stay technologically alive. This not only improves efficiency, but also improves the quality of each job. Old tools and tools need to be replaced so that each task can be done efficiently and timely. You will know when new equipment and devices arrived when old tools and devices begin to break down at a speed that causes repeated delays. If failure of equipment / tools can cause cost overruns and may result in late completion. No matter how good your job is, the missing end dates are bad for your reputation.
The eighth most important factor: renting to your weaknesses
No matter how much experience you have and how well you are skilled there are things we all do well and do some things badly. More than not, the things we do well are the things we enjoy and the bad things we hate. Owning a skilled business is to hire people who have strengths in areas where the business owner has weak points. For example, one of my clients was almost out of business because he did not like to call the claim. Will I give it a counsel? Hire someone who is a collector. He picked up the counsel and eventually became a collector of his partner. His business is now blooming. Borrow to your weakness and pay attention to business growth.
Ninth Key Factor: Document Failures and Errors
This should be included in the Job Process / Task List stack. You have to learn from mistakes. Errors should not be considered other than experienced experiences. Describe these bad experiences and paste them into your session and job list binders so that you do not repeat them again.
Tenth Key Factor: Change Orders
Most contracts include a language for change orders. Changing your orders is caused by a number of factors that go beyond this article, but let me just say that you have to pay every change order as if you were calculating your job. Next, it processes the change order (lists each task and assigns a completion date for each task) and enclose a task checklist for each new task that originates from the change order. Finally, the client must understand and sign the change order or will not collect his full-time price. Many construction contractors are unfortunately doing a bad job of managing change orders. They are reluctant to emphasize the client and think about it to avoid confrontation. Those? The change assignments do not happen at the beginning when they bid for the job. Customers will only receive the price they have given to them and are included in the contract. Before starting the bidding process and signing the contract, it is necessary to examine the reality of the change. If a customer understands from the beginning that orders change frequently, and that the change order increases the cost of the job, it will be less shy when meeting with the customer when it occurs.
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