Business management is a phenomenon that should never be taken lightly or for granted. Success and failures of business is almost never because of the business ideas, and almost always because of business management skills or the lack of it. The construction business is no different than most other businesses, but the mere mention of business management skills may have sounded repulsive to the hard hats who prefer to be out in the field getting their hands dirty instead of being in an office ‘pushing pens’.
The whole scope of a construction project starts with a single idea to build something and once the individual who came up with the idea has the means to realise it, a single construction company will be contacted. This contact that will be established and the job awarded provided the price offered by the construction company is reasonable. As much as most of us would like to be able to quote reasonable prices it is not always possible as it would heavily be dependent on the existing resources that the construction unit has and capable of deploying.
For example, a construction unit that owns an excavator would be at a vantage point if compared to a construction unit that did not own one and utilises only excavator hire services to keep their competitiveness alive and kicking.
Although considerations such as buying an excavator for the business may enhance profit in the long run, however, the hefty price tag on these machines puts a financial strain on the business. Therefore, only if the ROI (Return on Investment) is justified within a single financial year, taking excavators for hire on a daily basis would be the better option (there is also excavator rental on a weekly price basis which would make the daily cost of the operations much cheaper).
Apart from machinery, how the management of the company manages their project planning schedule is another critical success factor. For instance, most construction work takes place outdoors and hence, the weatherman might just be the company’s best ally as there will still be construction activities or work that can be done in wet conditions. Managing materials prudently and reducing waste is another small, yet significant if the amount is accumulated over a period of one year.
The two biggest or most crucial elements that construction companies should be focusing on in order to beat competitors is the quality of the work that they do and the price that they are able to offer customers. Quality work and competitive pricing are the best way to go about making waves and building a solid reputation within the construction industry. Keep a ‘lean’ supply of material that does not weigh down the working capital for the company because, as far as a construction company goes, having an adequate level of working capital is imperative to keep projects moving without delays.
Without sufficient working capital a construction company is as good as ‘dead in the water’.