Operating A Successful Commercial Construction Business

Published: 02nd August 2009
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Not everyone has what it takes to start and run a business. A large amount of time has to be devoted in the beginning and throughout the first few years; some beginning business owners work late into the night to get things up and keep them running. One of the sectors this has never been more true is in the commercial construction sector.

Commercial vs. Residential Construction

Although many think, "construction is construction" this isn't true. The two main types of construction are commercial and residential, and there are differences. Residential construction deals with housing developments, single-family or multifamily dwellings, town homes, apartments and modular housing.

Commercial construction, on the other hand, is aimed towards schools, roads, office buildings and shopping centers. Some may focus on large, multi-unit residential projects, but they are the minority. The materials, construction methods and required skills differ between the two, making it unusual to find a construction company that does both.

Operations of Commercial Construction

Most commercial construction businesses have a general contractor. They're responsible for the whole project, from start to finish, making sure that the building project is finished in a timely manner and within budget. Because there are so many skills needed in a complete building project, many companies hire subcontractors such as electricians, painters, excavators, etc, all working under the general contractor.

A large part of operating a successful commercial construction business is the bidding. Although some companies are contacted directly as the single bidder, this is often not the case. Normally, you will have three or more commercial construction competitors, all bidding on the same project.

When figuring your bid, keep in mind overall cost of labor, equipment use and time involved. This is not the time to be overly optimistic. It's better to finish early rather than late and under budget rather than over, so be realistic and, if possible, give yourself a little bit of padding.

The second largest part of being successful in commercial construction is making sure you hire the right subcontractors. Although they are business professionals in their own right, it's always best to create a list of questions to ask them during an interview process. Keep in mind that, like in every sector, there are legitimate and shady subcontractors. The end result will either help or hinder your reputation, not the subcontractors', so make sure they follow your personal and company philosophies.

Since you'll be working with those subcontractors and may very well have several of them, it's always best to put their work scope in writing. Make a list of the specific tasks each subcontractor will be completing, as well as the expected time frames. Not only will this make it easier for the subcontractor to accurately price their services, but it will also give them a clear outline of what you expect and when.

Remember that, depending on the contract, you may be responsible for obtaining the necessary building permits from the local authorities. Making sure you know which permits you'll need, and when, is your responsibility, so keep yourself informed. Inaccurate or untimely requests for the permits can cause a delay in building, as well as a serious cut to your reputation.

Once you've done a few projects, you'll start to learn which subcontractors are worth hiring and which have good prices. You'll realized that there are different types of building contracts, what they are and which works best for you. During slow times (because you won't always be busy), take the opportunity to further educate yourself and your employees. The keys to operating a successful commercial construction business are recognizing opportunities when they come, and being able to turn stumbling blocks into building blocks.Pulliam Construction Company, Inc. dba PCCi is a full service general contracting firm with a focus on Federal contracting work. PCCi has performed numerous projects ranging from a simple tenant improvement up to detailed ground-up construction. PCCi takes great pride in our engineering, construction management, and self performance abilities. Visit online today.

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