The construction industry provides the opportunity for great profits...and major risk. How can you be successful in this industry?
- Know the technical details of construction. Usually this requires at least 5 years of a broad range of construction experience.
- Know your numbers. You need to understand your costs and profitability at all times. This requires that you have an excellent accounting system designed specifically for construction, and that you understand and are comfortable using it.
- Keep up with technology. There are now mobile apps that can be used on the jobsite to improve your project management, access potential customers, and more.
- Develop standardized procedures and checklists for quality control.
- Watch your stuff. Construction theft directly impacts your bottomline. There are simple methods to take to reduce this theft, including low-cost remote cameras, inventory control, and marking equipment.
- Make it green. Green business practices reduce waste, can save you money, and make your business more marketable.
- Standardize your bidding process. A 2012 benchmarking study showed that construction firms submit 5 to 20 bids a month (with about a 10-20% win rate). If these bids are done manually, each one will take 3 times as long as using software or standardized spreadsheets (under 10 hours versus 30 hours).
- Be properly insured and maintain a safe workplace.
- Know and follow the rules for using independent contractors. In California, any non-licensed construction worker is automatically an employee.
- Use change orders - and charge for the changes. Before agreeing on a contract price, set the expectation that the contract price will be adjusted based on any change orders submitted.
- Market your business beyond referrals - through websites, networking organizations, jobsite signs, business cards, customer testimonials, and advertising (online or print).
On the right side, you will find resources to help you with workplace safety, environment compliance, green practices, and construction project management.