Construction and Contracting Business. Entrepreneur magazine
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.
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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.
Becoming a contractor is a unique endeavor because contractors work out among their fellow citizens, unlike most retail or professional businesses who draw customers to their establishments. Contractors, on the other hand, spend most of their time away from their office or their home base. Typically they are working in apartment buildings, client’s offices, or on the property of real estate owners.
Contractors Are Important to Their Communities
Contractors do much more than develop property. In many ways they improve their clients’ and communities’ quality of life . For many clients, their homes are their castles, their property, their domains. They spend countless hours in and around their homes and feel it’s important to be comfortable with their surroundings. Of course they all have their own individual likes and dislikes. While one may require a quiet but colorful garden for introspective thought, another may need a high-tech “great room” for entertaining friends and family. For many businesses, image is an important factor in their success. Perhaps a large fountain with multicolored lights is what they need, or a comfortable meeting room with the latest in high-tech communications devices. Most municipalities have specific requirements and standards for the design of subdivisions, park land, and urban spaces. Creative contractors meet the varying needs of all these groups, completing their work in ways that will improve the health and welfare of the community.
Contractors also improve and ensure the safety of their clients. Proper design and construction of the spaces that people use for living, working, and recreation ensure a safe environment for these activities. Contractors must be knowledgeable about local building codes as well as industry-accepted methods of installation.