Constr_ction: Is There Space For “U” In This Industry?
One of the reliable arguments often made about business is that you can’t go far wrong by getting involved in construction. Infrastructure will always be needed, there will always be financing made available for big projects, and it’s easy to sell your services as a construction firm; after all, everyone knows what the business entails. So if you’ve been looking to take initial steps as a startup business, it would make sense for construction to appeal to you.
In many ways, the obvious popularity of the construction industry has been a blessing, to the extent that it is easy to ignore the ways in which it has potentially become a curse. Essentially, if you’re looking for a way into construction, you might find that the industry can get a little crowded. Arguably, it is at the point where it is close to saturation, with more businesses fighting it out over whatever contracts are available. So you should have some questions to ask about how you can make a success of a construction business.
What are the risks from a crowded construction marketplace?
To make a long story short, more businesses fighting over a market that remains the same size has one obvious outcome. In order to make themselves stand out and secure contracts, many businesses will drop their quotes to a point where they are almost unprofitable – at least for a firm that is paying the going rate for the right materials and workers, while staying on top of legal requirements. It’s very hard for a business to stand out while also doing the right thing.
What can a construction startup do to avoid this?
The first thing that a new construction business needs to do is realize that there are no guarantees – the idea that construction is an easy industry to make a mark in has to die. It’s going to take work and a fresh, honest approach. Businesses that hire employees and train them properly through companies like Kallibr will provide a better end product than fly-by-night quick profit merchants. That will take more time and investment, so you have to be ready to sacrifice the idea of a fast buck.
How can you protect against being undercut by others?
Simply put, construction has become essentially a buyer’s market. If a stakeholder wants to pay less for a big construction project, then they’re going to be attracted by low bids. Your strategy needs to rely on those projects commissioned by someone taking a longer view, who is prepared to pay what the job is worth. You can gain their trust by compiling bids that underline the quality-first nature of your approach; you secure materials and workers before starting work, and you use state-of-the-art methods to plan and carry out the work.
There is no getting around the fact that construction has become an attractive industry for speculative businesses, and it’s hard to make your mark. But if you are prepared to prioritise building a reputation along with the more literal form of building, you’ll be the go-to company in the field, and will survive when the less scrupulous firms have burned all their bridges.
Categories: Outside Contributors
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