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The construction industry is one of the most booming industries in India. The sector contributes towards 8% of the Indian GDP (at constant prices). Not to mention, with the Make In India project, 100 Smart Cities and 500 AMRUT Cities will look to invite investment of 2 Trillion Rupees over the next five years. Also, there is an estimated investment of USD 650 Billion in urban infrastructure over the next 20 years.
Being the second largest employer and contributor to economic activity, after the agriculture sector, the construction sector accounts for the second highest inflow of FDI, after the services sector, and employs more than 35 Million people.
Today, there is a need for re-generation of urban areas in existing cities. There is also a need for the creation of new smart cities to meet the demands of the ever-increasing population and migration of people from rural to urban areas. That means future cities of India will require smart real estate and urban infrastructure. This is where your business can come forward and make an impact.
The construction industry constitutes big and mid-sized companies, small and medium contractors and construction equipment manufacturing companies. This means opportunities are available in plenty for your business to make a contribution to the industry. In If you want to know about how to start a business, then click here. With this article, you can gain tips on how to run a construction business.
Educate Yourself
To successfully run your construction business, you need to educate yourself about the various norms in the industry and stay up-to-date with its changes. It is no longer enough to just be good in your trade; you need to excel. Expand your knowledge by involving yourself with the people you work alongside, like the manufacturers, dealers or third party suppliers. Ensure that you get a clear understanding of costs, potential hazards and the level of training required for different designations. You need to be a better leader to your employees and always stay one step ahead of them. Learn to take better management decisions and handle conflicts effectively. After all, if you prove yourself to be a good leader, the more likely your chances of working alongside the best in the industry.
Make performances breed rewards
Money is not the only motivator. You need to look at different ways to motivate your workers by generating performance-based reward programs. Set up construction-based goals and make sure the reward at the end of it is well worth their time. Generate bonus programs and be generous with it. Encourage your team to come up with ideas for these reward programs, so they can work towards something they look forward to.
Allot job responsibilities according to your employees’ skill sets, as this will help you reap the most out of their talents. Make sure you stick to fixed work hours and do not encourage late working hours. Do not allow working late or working overtime decide who works hard. Rather, let results speak on their behalf.
Assemble the right team
You can never singlehandedly run a construction business in an effective manner. You need quality and skilled people working under you, or with you. If your business requires a big team, then train them effectively so they can unleash their potential and contribute to your business better. Put time and effort into finding the right people with the right skills. Training construction workers on the job will help them learn the tricks of the trade sooner and better. Adopt the right tone while talking, as this will help you get work done faster. Maintain healthy relationships and pay your workers well.
However, note that if you have more employees than the work at hand, things will start falling apart. No matter what type of construction business you are in, if there is less money to pay salaries and meet the material costs, it is difficult to move on. So, be wise and do your math well.
Price effectively
Ensure you price every job well. Involve the actual costs you incur at the time of production and at the beginning of the job. Take into consideration the material costs, if any additional equipment is required, and labor charges. See to it that you make a good profit before taking on more business.
Check your Accounts
It is humanly impossible to do the right thing all the time. Hence, be wise and take professional help when needed, especially when it comes to accounting and finance. Your accountant can help you sort out your finances and also keep you up-to-date with your financial decisions. Share your construction-related plans with him and go over your annual operating expenses. Identify and prepare a strategy that will address any excess costs. Avoid mistakes that will cost you dearly and increase your chances of success with maximum returns.
Manage Finances
As your construction business grows, the need for additional finances will also grow. You will need to borrow finance from outside sources so as to never run out of capital, especially when you need it the most. You will need capital to procure equipment, machinery, tools, vehicles and other construction materials. If you are running your business on a small to medium level, see to it that your business plan reflects most of the predicted, unpredicted costs and profits.
Business loans are designed to give you the ultimate ease and convenience in smooth business banking. You can find a dedicated Relationship Manager with Kotak Mahindra Bank who will help manage your funds and guide you to the right products and services.
Read Also: How to Finance your business
Build strong contacts
First impression counts. If you keep your clients happy, you will end up reducing your marketing expenses and in turn, increase your business volumes and upscale your profits. Look at building long-term relationships with your clients, not just one-time jobs. Similarly, avoid clients who don’t pay on time and don’t keep up with your terms and conditions. Doing this will help you steer clear of unnecessary losses in the long term.
Promote your business
Build a website in order to accentuate your business and reach out to the masses. Set up your social media pages to build traffic and to let the world know more about your construction business, the clients you have served, work done etc. Hire a team to manage your digital platforms exclusively, and if possible, a separate team to handle social media.
Ask your clients to write their experience of working with your company on various structural and construction-related jobs. Put these up as testimonials on your website.
Steer clear of these mistakes
It’s not possible for everything to run smoothly at all times. You will encounter a few hiccups every now and then. Hence, here are few mistakes you must avoid in order to run your business smoothly:
The key is to thrive rather than merely survive. The more the demand for new houses, renovation of homes, structure remodeling and other construction activity, the more the construction industry will keep booming. There are a dozen new opportunities for you as a business owner. Stay tuned to this page for our next article in the series.
Read Also: Business Strategies to Boost Working Capital
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