Читать книгу Construction and Contracting Business - Entrepreneur magazine - Страница 9
ОглавлениеThe contracting industry is both huge and varied. All sorts of people and companies call themselves contractors. On one side of the coin are thousands of profiteering contractors who made money off the war in Iraq, who supplied Americans on the front lines with everything from meals, laundry, and housing, to drivers, translators, bodyguards, and garbage collectors.
We also know of the hard-working and talented contractors who were instrumental in making the Apollo missions to the moon such a huge success.
stat fact
According to the Small Business Administration, approximately 10 to 12 percent of businesses open and 10 to 12 percent of businesses close each year. About half of those that open survive for five years; only one-third are still operating after ten years.
These are examples of the far edges of the contracting industry: major companies with thousands of contract employees at one end of the spectrum and the individual specialist on the other end.
The intent of this book is to provide knowledge to either individual entrepreneurs or to small teams of entrepreneurs who want to start businesses providing contracting services to other businesses or individuals involved in property development. These contractors may provide services to individual homeowners; developers of apartment, condominium, or commercial complexes; governments who develop public parks, plazas, and other recreational areas; or developers of residential subdivisions and housing developments.
In simple terms, there are two types of contractors who work with property development. First is the general contractor who organizes a project, hires other contractors to act as subcontractors, and is responsible for coordinating the activities of these subcontractors through the completion of the project. For example, the general contractor may be a home builder who engages the services of excavating contractors, carpenters, plumbers, electricians, and others to build a single home for a client. This operation is usually referred to as a “turnkey” because the general contractor bundles the services of several subcontractors into a single contract with his or her client.
The second type of contractor is the independent contractor. These contractors work one-on-one with their clients and do not work under the direction of a general contractor. Many projects will have both types of contractors working in conjunction with each other. A client may hire a general contractor to build a new home and also hire, under separate contracts, a landscape contractor to plan and install the outdoor spaces, a driveway installer to lay asphalt, and an irrigation company to install an automatic sprinkler system.
This book will focus on those contractors, both general and independent, who provide the services and material required to develop homes, office buildings, subdivisions, and similar projects. If you have the desire to become what we’ll call a “property development” contractor, then this book is for you. We’ll help you determine if you are the right type of person for such an undertaking. Then, we’ll discuss the nitty-gritty of getting started. A lot of time will be spent on how to profitably price your product and service. Troubleshooting problem employees and clients will be another important topic. Finally, we’ll tell you why it’s important to PANIC in order to be successful.
warning
The feds are watching you closely. If you are hiring subcontractors it is your responsibility to pay them in full at the agreed-upon rate. The rates of subcontractors should be factored into the pay applications so that when the client pays you, the money for your subcontracts will be included. Contractors have landed in jail for failing to pay subcontractors in full. Don’t cut corners, or you can ruin your reputation and end up in hot water.
Developing a property can be a very complex and time-consuming undertaking. A wide range of experts are needed for a successful property development project. In general, there are two types of contractors involved with the development process: those who generally work on the inside of a building and those who work on the exterior of the building or on the landscape. Following is a list of contractors found working at property development projects. The list is not inclusive; there are additional contractors who have a special niche in the industry. Some contractors specialize in maintenance and repair, while others work with new construction; many do both.
Inside contractors include:
Architects
Engineers
Interior designers
Carpenters
Plumbers
Electricians
Cabinetmakers
Drywall contractors
Flooring and tiling contractors
Heating and air-conditioning specialists
Insulation contractors
Painters and paperhangers
Security systems specialists
Masons
Outside contractors include:
Landscape architects
Engineers
Grading and excavating companies
Asphalt companies
Lighting experts
Irrigation specialists
Landscape contractors
Surveyors
Deck and patio builders
Painters
Swimming pool builders
Waterproofers
The United States Department of Labor Occupational Safety and Health Administration (OSHA) also adds a number of specialty trade contractors including those that work on mobile homes, those involved with bridge painting, as well as special trade contractors primarily engaged in activities that are clearly linked to specialization in the area of heavy construction, such as grading for highways and airport runways; guardrail construction; installation of highway signs; underwater rock removal; and asphalt and concrete construction of roads, highways, streets, and public sidewalks. You’ll also find specialists in masonry, stonework, tile setting, plastering, and so forth. The point is, contract specialists can be found in almost any possible area of expertise.
Contractors most often, except on very small jobs, will work in teams. For example, a landscape architect will be responsible for the design of the exterior of the property, and an architect will design the building itself. Each may be responsible for ensuring that her designs are properly built. Each may hire other contractors to complete the work. These subcontractors usually work for the architect/landscape architect and not for the owner of the property. They will schedule their work with the architect/landscape architect who, in turn, will coordinate the activities of all the subcontractors.
Another type of contractor is the design/build firm. This type of contracting company has trained architects and/or designers who provide plans for the development, assist the owners with obtaining the required permits for construction, and provide their own work force to complete the actual construction. In some cases, subcontractors may be used for services that the design/build company does not provide. These are usually very skilled services such as cabinetmaking, or work that requires expensive equipment such as bulldozers and backhoes.
Of course, a property owner can act as his own general contractor. However, in order to be successful, the owner must have the time to coordinate all the activities. Typically, he should be on-site daily to be sure that materials are delivered on time and that subcontractors are performing their work according to the plans. It’s also very important that the property owner authorizes all changes in the plans when necessary. (Imagine going on vacation for a week and returning to the project the following Monday morning and finding that your brand-new kitchen was painted metallic gold rather than the soft yellow you thought you had selected.) While creativity can be a plus, making sure everything you do is authorized, in writing, is essential in this industry. This is true whether or not the business or home owner is on the property.
There is nothing worse during the course of a project than having to undo work that has already been done. Imagine you are the general contractor, and the driveway contractor has just completed his work: excavating and grading, installation of a 12-inch gravel base, and then laying three inches of asphalt. Then, the next day your plumber shows up with a huge backhoe and informs you that he must dig a trench eight-feet deep right through your new driveway so that he can install the septic system.
These are nightmare scenarios that have actually happened. Proper time management and knowledge of all facets of the work are vitally important to a successful project. Contractors of all types must know not only their own areas of expertise but also the sequence of the project and be able to communicate with, and understand the basic work of, the other contractors working on the project.
stat fact
According to industry sources, 90 percent of businesses in the U.S. construction industry employ fewer than 20 workers. Small construction businesses are a critical part of a vital economic sector and the U.S. economy as a whole.
The contracting industry is vital to the economy of the United States. During good economic times, contractors are often the engine that keeps a local economy vibrant. In fact, according to the Engineering News-Record (at www.enr.com), the top 400 contracting companies in the United States generated over $330 billion in revenue in 2014. Whenever you drive past a new subdivision, take a look at the number of different types of trucks and vans that enter the development each morning; note the different types of equipment being used by these workers. And think about the families that these workers are supporting. Their work helps support industries like department and appliance stores, grocery stores, and restaurants. During times of economic struggle, the most creative of these companies remain busy and viable with remodeling projects as well as providing maintenance and repair services. However when building and development slow down, the entire economy suffers as many employers lay off portions of their staff.
aha!
If you are currently working for a contractor and plan to open your own business, don’t assume that your customers will automatically move their business to your new company. Most customers are more loyal to a business than to an individual employee. You may, however, serve a niche market and can handle business opportunities in an area of expertise in conjunction with your former contractor and/or other established contractors.
Recent data (according to www.investopedia.com) indicates that in spite of the major recession of 2008–2009, entrepreneurship in the United States is alive and well, and the construction and contracting industries are growing. In fact, half of the top ten fastest-growing industries in the United States, as of 2015, are tied to the construction industry. Not only have construction revenues grown but unemployment has dropped considerably in the industry.
While the contracting industry is not for the faint of heart, for those who have the resources, the talent, and the desire to become a contractor, the rewards can be substantial. Not only financial rewards but also quality of life issues are enhanced by owning your own successful contracting business.
So grab your hard hat, and jump right in to learn what it takes to become a successful and profitable contractor.
The contracting industry is very large and diverse.
Contractors are important and valuable contributors to local and regional economies.
Profitable and rewarding opportunities abound for creative and talented entrepreneurs.
