Being a contractor is one of the most rewarding and interesting jobs to have this year. Despite the economic problems of the construction industry because of the pandemic, the industry is recovering this year. This means that there is a growing opportunity for people who want to join the industry this year.
The industry is expected to grow by about 1.8% this year. You might think that’s only a small amount, but that’s roughly above the average for many trillion-dollar industries. Moreover, the Biden administration has recently agreed on a $1.3 trillion infrastructure bill to improve many government infrastructures, including roads and railways. This opens up more jobs and businesses for the industry.
However, despite the positive progress that the industry is making this year, sufficient knowledge is still required when starting a firm. If you’re planning to start a construction firm, there’s a couple of things you need to know to succeed.
Excavation Projects are Important
Construction firms tend to shy away from excavation projects because of the hassle they pose for very little pay. However, the sector earns a decent chunk of its revenue from such projects.
There are many important projects that your firm can gain by being in the excavation market. Site prep, compacting, and lifting are just some jobs you can gain a decent amount of revenue. It’s worth investing in a small excavator because it can certainly speed up the entire process. The faster you are in doing these projects, the more revenue you can get.
Jobs are becoming quite rare for many firms, but diversifying to excavation can gain more jobs than average. This will help your company to thrive in the industry.
Another sub-sector you should consider entering is the modular construction market. Modular construction is becoming quite famous nowadays because of how efficiently it can build structures from the ground up. This also means less manpower needed to build a particular structure which can then translate to fewer expenses.
It’s estimated that modular construction can shave off 30% to 50% of the overall building time of a particular structure. That means that a house that takes six months to build will only take three months. That’s a huge difference and is one of the reasons why modular construction is becoming such a big market.
The market’s estimated value is around $112 billion and is expected to grow by 6.5% in the coming years. So it might be worth entering this market as a start-up, given that you have a couple of million investment.
A Focus Into Residential Projects
Many new construction firms are creating a profit from residential projects since most of the revenue comes from that side of the industry.
The demand for new homes is growing because home prices have been soaring high for the last few years. As a result, experts in real estate say that building a home nowadays might be cheaper than purchasing a home in the market. This shifts the revenue in the construction industry towards residential projects.
As a construction firm, you should take full advantage of this. Consider offering residential home building from its excavation into its furnishing. You can even offer modular construction to make the building process much faster. All of these things will make your company look attractive in the eyes of clients. However, you do have to spend a decent amount of investment on training your employees for such projects.
Price Increase in Material Costs
You should also be aware of the price increase in material costs. Because of the pandemic, the material is becoming significantly harder to ship. As a result, many construction firms struggle to find cheap enough materials to sustain their projects, while other firms have decided that it’s better to let the client shoulder the cost.
As a new firm, it might be better to let your client shoulder the high cost of materials instead of searching for cheaper options. However, if you can be creative enough to use other cheaper materials, then feel free to do it, as long as your client agrees to it.
Need for Laborers
Lastly, your laborers are going to be crucial to the growth of your business. Currently, it’s hard to find the necessary manpower to finish projects because of the pandemic. This is why you should invest as much as you can into your laborers. Losing a couple of them can mean the end of your company, so make them stay in any way you can.
It’s important to know all of these things when starting a construction firm. You can outmaneuver your competitors and make your way to success in no time.