How To Start A Construction Business: Public Versus Private Sectors
When starting a construction business, you may want to try to maximize revenue by taking jobs for businesses, private individuals, and the government
. Keep in mind, however, that there are specific skills, challenges, and benefits involved with working with each of these groups. In the long-run, companies that focus on developing expertise with one sector over the other often are more successful.Working With Businesses
Working for real estate developers or other businesses on construction projects can lead to a lot of repeat business if you can make their short list for local vendors. This ongoing relationship can make communication between your company and the client much less of a headache, leading to less paperwork and greater trust between you and them. However, businesses who do a lot of construction work will also be serious about keeping the cost of that work down. They may try to work with a few companies in order to play them off of each other with competitive bids. They may pressure you to match prices given by others to win jobs. Once any one business represents a large portion of your revenue, you are in danger of giving them the power to dictate the prices you can charge to a certain extent.
Working With Consumers
Building homes and other structures directly for the private owners of the property can be rewarding work in the long-run. The personal experience of helping a client achieve something they are invested in more than financially can be a great benefit for you and your staff. The flip side to this is that these clients will be more demanding of high quality and may make unreasonable demands just because they are so personally invested in what is being built.
Working With the Government
Doing jobs for the government, whether local, state, or federal, may be the only source of revenue left during some down-times as the government attempts to spur business investment through investment of its own. For this reason alone, it may be necessary for your firm to learn the ins and outs of the sometimes very complicated bidding and application process for government jobs. However, look out for when the government project has an unreasonable budget set by lawmakers who knew little of the actual challenges that the contractors would face. Protect your company from bearing extra costs that may come up in these cases, but do your best to make sure the budget you agree to is a fair one in the first place.
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