Are you planning a construction business?
Now seems to be the time to start one.
The Philippines is enjoying a real estate and construction boom. And this is not expected to end any time soon.
The boom is attributed to several factors.
A growing national economy would naturally have demand for new and better buildings and infrastructure.
The government has not relented its efforts to stimulate economic growth by increasing expenditures, especially in infrastructure building.
Robust remittances from overseas workers continue to spur real estate purchases and construction initiatives by their families.
A report from BCI Asia published in 2013 said that civil construction works on roads, bridges and facilities will drive much of the momentum for new construction projects.
However, if you are new in the business, you would need to get ready instead of just plunging on.
Here are some tips that will help you prepare for the tough construction business, adapated from conststudy.com.
1. Market your business. You cannot expect clients to come to you if you are new and have no track record to speak of. Build a network of contacts which might include the residents’ association in your village or subdivision, the parents association in your kids’ schools, a civic or religious organization (think Jaycees, Couples for Christ, etc. Take every opportunity to hand over your business card. An online site will also be a good idea.
2. Prepare your accounting system well in advance. Don’t be so preoccupied with making money that you neglect to record business transactions. Hire an accountant as soon as you can afford one. But if not, save all your receipts in separate folders for each job and print or download your checking and credit card statements at the end of each month.
3. Under –promise and over-deliver. It may be tempting to promise your customer the moon just so you can bag a project. But how dangerous is that? Your business is only as good as how well you satisfy customer expectation. So, make only promises you can keep. Tell your customer a price change may occur from the time estimates are made to the time construction gets going. Give construction schedules a reasonable allowance for acts of God and other unforeseen events.
4. Always be studying. Not only in construction but in every field, owners and managers need to update their technical and managerial knowhow. You may not have need for computer-aided designs while you’re just beginning and your projects are small, simple structures. But what about in the future?
5. Save. There is always a peak season and a slump season in business. So save for the time when your telephone won’t ring asking for a price quotation.
6. Invest on equipment and keep well-stocked. You must have all the right tools and materials and parts accessible. Constant trips to the hardware store and to the home depot will slow you down.
7. Save your old estimates. You will likely have repeat customers and having your old files handy will allow you to bid the job without having to measure and compute as well as allow you to keep your pricing consistent.
8. Hire good people. You need a good crew from engineers to foremen to carpenters to other skilled workers.
9. Define hourly labor rates. Create labor hour sheets with hourly charges and material charges. This will help you estimate jobs easily. You can also present these directly to the customer, with all your overhead and other expenses built right into the price.
Photo: from https://farm2.staticflickr.com