Budget overrun is a frequent problem for contractors. You bid on a project, your bid is accepted, and then it’s a race to try to keep your costs down. There are several things that can make you spend more than you expected, and some of them are easier to account for than others. By planning ahead, you can minimize the likelihood that you’ll need to adjust totals over time. Here’s a few areas to focus on.

1. Don’t Skip the Details
Like guessing how many candies are in a jar, rough estimates of your project costs are bound to be wrong. Sometimes, a quick back-of-the-napkin tally can be off by hundreds or even thousands of dollars. Instead, make sure that you’re giving enough time to investigate the costs you predict for each stage and line item for the project. Confirm that prices on materials or equipment rentals haven’t gone up. Double-check that you haven’t missed a digit and made an $8,000 item look like it costs $800. The more investment you make in the original estimate, the less likely you are to make a mistake.

2. Overestimate, Don’t Underestimate
When you’re trying to establish your contracting business (or get a leg up on the competition), it’s tempting to say that you can get it done quicker and cheaper. But if this requires you to skip sleeping or force your employees to work much longer days, it’s not a realistic goal. Whenever you can, overestimate how long you think the project will take. Give yourself a margin of 10-20% on materials, in case you need more or they’re harder to get. It’s always easier to show a client that it cost you less than to ask for more money.

3. Budget for Non-Project Business Costs
There are a lot of expenses you have to pay to run your business that do not fall within the confines of the project. If you’re not budgeting for them in your estimates, they will come out of your profit margins. You may have a variety of bills that are not related to the specific project, such as:

• equipment maintenance and repair
• training and certification
• administrative expenses
• insurance

Take the total costs you expect for these and other concerns, and divide them by the size of the project. For example, if you have a project that’s going to take about a month, you’ll divide the total by 12 and add it to your bid.

4. Plan for Bad Weather
Earthquakes. Wildfires. Landslides. Huge snow storms. California has a lot to contend with when it comes to weather. Depending on the season, you might need to budget extra time in case you lose a day due to one of these events. Check weather patterns by the month and keep close tabs on the forecast. Giving yourself a few extra days’ worth of labor costs on the project will help you come in under budget and on time.

5. Negotiate and Approve Budget Changes Early
Every now and then, even the most careful planning will fail to return the right numbers. A sudden loss in supplier could force you to find someone else at a higher price. An unpredicted weather-related disaster might set you back several weeks. As soon as these events become clear, you should act quickly to renegotiate. Waiting until the end of the project runs the risk that you’ll have to fight to collect the difference from an unwilling client. The earlier you get started, the more likely you are to get the go-ahead to continue with an adjusted budget.

Earning money with your contracting business starts with a budget that you can stick to over time. The more accurate you are from the beginning, the less you’ll lose profits because you went over by too much. To start building your career as a contractor, visit CSLS today!

There’s nothing like a little competition to get businesses working harder to build bigger and better. And the competition between hotels and short-term private rental companies like Airbnb is anything but little. Airbnb, which began as a way for owners of existing properties to rent them out for money, is now delving into construction. Hotels are streamlining and expanding to compete. Here’s how the battle could affect your contracting business.

Private Rentals Increase Demand for Renovations
Airbnb boasts more than 5 million homes available to rent in tens of thousands of cities worldwide. The business concept bursts with income potential. If homeowners have a decent living space in a high-demand area, they may be able to secure hundreds of dollars a night for the days when they aren’t occupying the house. Make a few minor upgrades, such a mid-range kitchen or bathroom upgrade, and Airbnb hosts can increase the price significantly. It’s changing the way that people conceive of the purchase and ownership of residential property, which may have long-term effects for construction as an industry.

Real Estate Investors Spur Demand for New Housing
If a person making a few renovations to their own home can make it much more likely to land a healthy income from short-term rentals, you can imagine how quickly real estate investors got involved. Across the country, investors are looking for existing homes or units to buy and fix up so they can rent for a higher price. They often have more access to capital for renovations than private homeowners, which allows them to hire contractors to do more extensive work. This increases demand for a variety of fields in construction, as well as other industries. For example, property management companies are expanding to specialize in short-term rentals through sites like Airbnb.

Hotels Attempt to Compete
The industry really feeling the pinch from such an influx of private rentals is undoubtedly hospitality. Hotels are trying to stay in the game with new buildings, specifically bigger ones with better features. Hotels now have to compete with possibly tens of thousands of private rentals within a 20-mile radius. The only way they can realistically do this is by building better and faster than they ever have before. Hotel chains are emphasizing modular construction especially as it allows them to expand and get to completion weeks or months earlier.

Cities Try to Curb Airbnb Real Estate Investors
Overcrowded and underhoused cities in California have been looking at this battle with wariness. A market that encourages investors to buy up and renovate units even in high cost-of-living regions like the Bay Area could dramatically cut down on the available housing. Some experts estimate that Airbnb alone accounts for a 10 percent increase in rent in New York City. Cities like San Francisco and Los Angeles have already set limits on the ways that people list properties on sites like Airbnb. But elsewhere in the state, the push to build housing for people to live (and to rent when they’re traveling) increases demand for new housing starts as a whole.

Both Sides Emphasize Speedy Completion of Projects
If this feels a little like an arms race, it is in a way. Everyone wants the best of the best and they’re not afraid to pay for it. For contracting businesses looking to take a piece of all this investment money, the focus must remain on efficient processes and good results, with a little extra fact-checking along the way. If you can spot an investor with a good plan, you may be able to take part in projects that open doors for you.

The battle between private rentals and the hospitality industry is only beginning to heat up, with lots of potential effects for construction. To find out how you can take advantage of increasing demand in this industry, contact CSLS today!

You read a lot about construction’s labor shortage and ways that the industry is trying to get around it. Although new approaches like automation and modular construction can decrease the numbers needed for a particular project, eliminating jobs isn’t sufficient. In order to survive the thousands of professionals who retire from construction each year, the industry needs plenty of skilled tradespeople ready to replace them. Here’s how the industry, with help from local governments, is trying to ensure this happens.

Education Programs
Whenever you read anything about the labor shortage, you may see an emphasis in skilled workers. After all, if you need an electrician or someone who can fix an elevator, you can’t just grab the first person who walks by. After decades of demeaning skilled trades as beneath the hallowed halls of academia, colleges are realizing that they need these programs more than ever. States like Illinois are investing millions of dollars into training and apprenticeship programs that will help interested people develop the skills and experience they need to meet the demand. Here in California, colleges pursue grant money to help them create certificate and non-certificate programs to get students involved.

Improved Working Conditions
When millions of people in construction lost their jobs with the housing crisis, the professionals who remained were left with a particularly complicated situation. Once housing and urban development began to rise again, they needed a lot of skilled workers in a big hurry. They’re still working on this. The industry has been in a period of rapid growth for nearly a decade and it’s so far behind.

By this point, the problem is not so much that people left the industry to do other jobs. It’s that a diminishing pool of new workers came to replace them. Employers are starting to seriously rethink what they need to do to get people to start in the industry in the first place. This means higher pay, better benefits, safer working conditions and a higher degree of predictability in employment.

Expansion of Modular Construction
Modular construction is one way that construction business owners have found can streamline the jobs they have into something that Millennials and Generation Z actually want to consider. Let’s face it: There are parts of California that are a positive delight year-round, but there are also plenty of places that are simply nasty in winter, summer or both. Modular construction has the benefit that so much of the work is completed offsite, in controlled settings. This allows employees to keep a schedule that works better for them, in a place not governed by weather and daylight, possibly closer to home. The use of technology to get work done faster is an added bonus.

Changes to Zoning Regulations
The thing about urban sprawl is that it affects where people live, as well as their jobs. Jobs in construction still operate mostly from the site, which means that distance plays a factor. If you knew that you would have to commute 100 miles each way to do your job, you might consider a different industry. And if you don’t live anywhere near the places where contracting businesses are thriving, you’ll either have to move or find a way to commute. As a way to combat this, cities are looking at their existing zoning regulations and trying to find ways to make different methods work. Flexibility opens up more options for housing, which can positively improve the choices you have for where you live and work.

The construction labor shortage is likely to continue for several years to come. This means that if you get into the industry now, you’ll have a lot of opportunities to grow. To get started, contact CSLS today!

Working in construction is full of risks. Even if you ignore all the safety concerns (which you shouldn’t), there are all kinds of risks you take in your business each day. Although you want to minimize the effects of taking chances, this can sometimes make you too eager to avoid taking risks at all. Here’s how to know that your contracting business is too risk-averse, with some ideas on how you can branch out.

You’re Stuck Using Old Technology
There have been tons of innovations in the construction industry in the past 10-20 years. In fact, every year reveals a huge introduction of products on the market, from sustainable building technologies that save you money to tools and apps that make your job easier. It’s all very exciting but also terrifying, because when you adopt something brand-new, you’re putting your business success on the line. Sticking to the things you picked up years ago may feel safer, but it’s more likely to render your services obsolete. Instead, you should invest some time to test out new technologies and research the latest innovations. If you get a chance to try them out, you may feel more comfortable putting a few of them into your workflow.

You Consistently Bid Too Low
It’s easy to understand why many contractors bid low on a project. They’re worried they won’t get it if they bid the price they actually need to receive. The problem is that this can be risky no matter how you look at it. Bidding low may help you secure more work, especially when business is slow or you’re still trying to get established in your area. But over time, razor-thin profit margins will make it harder for you to grow and improve. Bidding the lowest often gets labeled as the safe bet, when it’s actually one of the most-effective ways to kill a budding business. Research competitive rates for similar projects in your area and use those numbers as a jumping-off point for your own bids.

You’re Usually Taking Someone Else’s Lead
Let’s face it: Construction as an industry is not particularly bold when adopting new innovations. There’s some wisdom in it, too. If you’re too quick to take risks on the latest gadget or building concept, you might find out that it was a big waste of money. But refusing to take the lead on changing practices that aren’t working for your business may cause you bigger issues down the road. Keep in mind that everyone makes decisions differently, depending on their goals, the local economy and what’s available to them at the time. Even if your long-term mentor with 40 years of experience goes in one direction, you don’t necessarily have to follow. Being willing to experience things for yourself and make your own decisions is a huge reason to start a contracting business in the first place. It’s all right to let yourself do just that.

You’re Not Practicing Risk Management
Part of being risk-averse is a serious desire to avoid unexpected harm, which makes sense. If you don’t know what the risks are, you’re more likely to feel stuck in neutral. Risk management is designed to help you bridge the gap between never trying anything and jumping the gun on every project. If you’re not evaluating your business practices for the level of risk they represent, outside of safety, you’re missing a big opportunity to guide your decision-making in a better direction. Sometimes, just knowing what you can expect and what is likely to happen will help you feel easier branching out from your comfort zone.

Starting a business is a risky venture, but there are lots of ways to make it work. By finding a balance between risky and risk-averse decisions, you will have a higher likelihood of a sustainable business. To learn more about what it takes to run a successful contracting business, contact CSLS today!

It’s going to happen eventually, and it might even happen a few times a year. You end up in a dispute with a contractor, subcontractor or client. Some disputes are easy to resolve, while others might put a halt on the project. Since time is always money for your contracting business, trying to avoid disputes is one of the best things you can do to keep the work going. Here are a few tips you can use to get everyone back on the same page.

Keep Communicating
Communication is a big key to keeping a disagreement from becoming a formal dispute. Without it, what you have is two parties who are left trying to make decisions independently. This means that you have to work together on a regular basis before you start the project, in order to hammer out the plan and confirm that the specifics will meet everyone’s requirements to proceed. You need to keep up this communication throughout the project, possibly as often as every day. Even if you feel like the other party is acting unreasonably, be sure to focus on professional interactions. Maintaining an open path to discussion increases the likelihood that you’ll find a fair compromise.

Get Details in Writing
Having a phone conversation or a meeting in which you discuss specific aspects of the project is often a requirement for construction work. It also can be insufficient. Both sides may think that they remember what they agreed to do. Without documentation, it’s your word against theirs. If your previous contract didn’t include enough details to proceed, now’s the time to try to fix that. Follow up a verbal conversation with an email or other written record to show what you discussed and confirm that everyone now understands what is going on.

Address Inconsistencies Promptly
Contracts often include a lot of jargon or vague terms that could be interpreted in a variety of ways. It’s tempting to ignore them and see if they actually become a problem, but this can make the situation worse. Disputes are more likely to cause bigger issues over time, particularly if some aspect of the initial plan led to work that’s no longer meeting the requirements of the project. To avoid investing too much time going in the wrong direction, carefully analyze all the terms in the contractt. Ask questions or clarify if something seems unclear or likely to cause problems.

Solve Problems for the Future
When you first start a contracting business, it may feel like you are reinventing the wheel every time you begin a new project. Although this should dissipate in time, your approach makes a big difference. Getting through a tough dispute should prompt you to evaluate what you could change to avoid the problem in the future. Some issues are truly not of your doing, but there are ways you can minimize their effects. If the dispute is related to design, which is an increasingly common issue in construction, revising the way that you create and collaborate about design could pave a smoother path for the future.

Consider Mediation
Many contracts stipulate that relevant parties will attempt to negotiate a satisfactory arrangement before escalating the dispute. While getting together and figuring out how to move forward can often solve the problem, it isn’t always effective. In this case, you may want to hire a mediator to ensure that each side can communicate their concerns. Having an objective third party might be enough to get everyone on the right track. It may also save you the time and effort spent bringing it to arbitration or litigation. In those cases, you’ll need to hire a lawyer to advise you of your rights and obligations.

People are human, and sometimes they disagree over the details of a construction project. Learning how to navigate disputes is part of keeping your business afloat. To begin building your construction career, visit CSLS today!

It’s no secret that the construction industry produces a lot of waste. When you do any kind of demolition as part of your business, you’re much more likely to be taking tons of the debris to the landfill. If you’re starting to feel like this is just a part of your business, there may be another way. Here’s how you can evaluate your company’s waste production, with a few ways you can cut down on the excess.

Measure Waste Production
Figuring out how much you’re sending to the landfill might be easy or difficult, depending on the work you do and how you dispose of waste. Take a few months or even a year’s worth of projects and evaluate how much waste you create. Since about 90 percent of construction waste is through demolition, the amount of debris you’re dealing with will be much higher if you’re taking down buildings as well as creating new. Consider the mass and weight of the waste you get from a project. If it’s materials you bought, see how much of your purchase becomes waste. This will help you figure out how to cut back.

Consider Ways to Cut Back
Efficient construction processes are good for virtually everyone. When you look at how you waste time, energy or materials, you have an opportunity to cut down on unnecessary expenditures. You might be obtaining materials from a source that uses much more packaging. You could be cutting or shaping materials in a way that creates too many leftovers you can’t use. Cutting down on the supplies you buy because you’re using them better saves you money and space in the landfill.

Make Sustainability a Priority
The best product is one that lasts longer without needing to be demolished or rebuilt. While using sustainable materials is an important part of construction, sustainable construction is another way to keep debris out of the landfill. Once a building is a few decades old, experts have to evaluate the benefit of keeping the building upright compared to replacing it with something better, safer or more efficient. If you look at these aspects in your construction practices, you can consider adding new approaches that improve them. You may be able to build something that will last decades longer without needing complicated or expensive retrofits.

Look for Recycling Options
Reclaimed wood sounds like a fashion trend for high-end homeowners, but reuse is a good practice for most fields in construction. In many cases, you can take materials you remove and sell or donate them to organizations that repurpose them. There are rules for the ways that you can recycle debris, as well as the types of materials. For example, people can recycle concrete as long as it doesn’t have other elements like wood, paper or trash. Look for recycling centers near the jobsite to make transport that much easier.

Use Recycled Materials
For the greatest efficiency, you may be able to recycle and reuse some products while you are still on the jobsite. Concrete has been a nightmare for decades because it’s heavy, bulky and hard to reuse. Yet, people are finding new ways to work with it. With the right equipment, you can pulverize concrete into pieces that you can use as road base or to make new concrete. This dramatically cuts down on your material purchases and the energy spent shipping them. Since materials like wood and metal already have healthy markets for recycling, you can also look for supply companies that sell recycled materials.

Dealing with waste is just one part of running a contracting business. To explore our courses and find the construction field that’s right for you, contact CSLS today!

Construction workers need to drink water throughout the day for their health and ability to do their jobs well. The problems are that there are so many ways this can go wrong on a construction site. You expect the taps to be working, only to learn that they’ve been stopped by another process on the jobsite. You bring in water and it gets contaminated by accident. Keeping drinking water safe is important, but sometimes easy to forget. Here are a few tips to make sure that you and your employees have safe drinking water wherever you are.

OSHA’s Standards for Drinking Water on a Construction Site
The way that people get water while they’re working in construction has some conditions. The Occupational Safety and Health Administration says that workers need water that is:

• potable (i.e. safe for consumption)
• in a container with a lid that can be sealed tightly
• held in a container that is not used for anything else
• dispensed through a tap, not dipped

This might be easy to meet if you are working on a site with existing construction and functioning taps. If you’re going to use a cooler with a tap and have your employees use disposable cups, you must provide a sanitary place to keep the unused cups and dispose of the used ones.

How to Protect Access to Drinking Water Onsite
Since people can easily get sick or even die without water, you have to treat it like you would any other gear you bring to protect yourself. This means you must think about it in advance and have a plan in mind. For each aspect of the project, answer the following questions:

• How will you get water each day?
• How easy is it for your workers to get water when they need it?
• What happens if that access changes?

Workers may have different levels of availability depending on the job they’re doing. If anyone has limited access, such as having to walk a long distance or regularly interrupt their work, you might need to think of an alternative.

Providing Backup Water Sources in an Emergency
There are times when you’ll forget to bring the water, or there is some reason that you can’t use the water onsite. For example, the city of Poway recently had to put homes and businesses on a boil order because of backflow into the water supply from recent storms. If something like this happens to you, you will need to have a backup. Keeping a spare supply of water in your vehicle might be all you need. Locating alternative sources of water nearby, even at a local convenience store or grocery, also may be able to provide for you and your workers until you come up with a Plan B.

Water Consumption Recommendations for Construction Workers

Anyone in any job needs to drink about 64 ounces of water per day. Positions that require a lot of heavy labor or working outside in the hot sun usually need more. For example, if you’re working in the Mojave Desert and it’s 115 degrees outside, your workers may need to drink as much as four cups of water per hour that they are operating outside. In this case, you will need to keep a supply of fresh, cool water and encourage everyone to drink water several times per hour. People who are engaged in work might not think to drink until they are extremely thirsty, but this can be dangerous in hot weather.

Safe access to drinking water is a cornerstone of your business’s ability to function. Without it, everyone’s productivity may decline sharply. To learn more about ways you can run a contracting business, contact CSLS today!

The construction industry has been booming ever since the world started to rebound after the Great Recession. The year 2020 brings several changes that contractors should keep in mind while they grow their businesses. With a greater emphasis on technology, the widespread acceptance of the design-build approach, and an increasing importance of hiring skilled labor, you can see that there are new avenues of the market to explore or continue developing.

1. Labor Shortage Continues
   As members of the baby boomer generation continue to retire from construction, you’ll continue to see labor shortages particularly in expert fields. The economic crash of the late 2000s drove millions of workers out of the construction industry in search of more reliable jobs. Ten years later, those numbers still haven’t recovered. Companies will try to meet their needs by working to secure contracts with a smaller pool, usually in the form of higher pay and increased benefits. They will also look for ways to bypass certain types of labor they can’t secure, such as the use of drones or other technology.

2. Modular Construction Increases
   In the name of efficiency, modular construction will likely keep increasing in popularity. Businesses are finding that they can complete projects earlier and at a lower cost if they can produce certain aspects of the building offsite. This allows them to control the conditions and often create more usable products in the same amount of time. Less work also makes it easier to work with a limited labor pool. Improvements to modular construction to make the buildings competitive with site-built construction will help to persuade more people to give it a try.

3. New Construction Slows
   When the economy started to rebound, this led to a flood of new construction projects. The smaller pool of qualified workers and construction businesses meant that some regions saw projects booked years out. In certain parts of California, this might continue for some time. Otherwise, you can plan on a gradual slowdown of new starts in residential and commercial construction. This is mostly tied to a decrease in demand, but also relates to a rise in tariffs and trade disputes with countries that provide a large amount of manufacturing.

4. Technology Takes Prominence
   The use of technology has been one of the best ways that contracting businesses can get work done without having to track down experts who are retiring in droves. Even if you weren’t an early adopter of drones, AI or automation, there’s good reason to get in now. At this time, technology is rapidly expanding in various construction fields but also changing quickly. This means that you’re not likely to see tools and devices taking over jobs as much as enhancing your work or making it more efficient. Getting on board now may make the difference between staying current with your competition or falling behind.

5. Design-Build Is Here to Stay
   Involving contractors in the design stages of a project has been the norm in some construction fields for years. At the higher levels, particularly for government-funded projects, people have been slower to accept an approach that combines the design and bidding parts of the process. This is changing, as more organizations realize that they can save a lot of time on a project and promote greater accuracy by getting the contractors who will do the work on board at the beginning.

The year 2020 is going to be an exciting year for the construction industry, full of opportunities for contractors with the right skills and experience. To start building your career as a licensed contractor, visit CSLS today!

It happened in New York, and it could happen here in California. Dozens of inspectors went to various construction sites and found tens of thousands of violations. Many of them were related to safe practices and working conditions. Although you’re not likely to encounter an unexpected inspection during the course of your project, there’s good reason to be prepared. Here’s how you can ensure that everything is in order.

What Are Common Construction Violations?
The Occupational Safety and Health Administration (OSHA) keeps a list of the most common violations each year. Many of them, like communication about hazards and respiratory protection, apply to a variety of industries. For construction in particular, fall protection, scaffolding and ladders top the list. So besides making sure you’ve always got the right building permits for the project, safety needs to be your first priority when it comes to avoiding violations.

Who Can File a Safety Complaint?
Although contractors in New York were surprised by these unexpected inspections, California contractors need to be prepared at any time. Almost anyone on the jobsite can file a safety complaint to Cal/OSHA. This includes workers and employers. If someone sees a lack of safety procedures or dangerous activities happening at a particular site, they can call Cal/OSHA or email their complaint. The person who files the complaint is kept confidential so that they don’t face retribution.

What Happens if a Worker or Inspector Files a Safety Complaint?
Safety violations happen on occasion. There are a lot of rules to follow and in some cases, workers may not know that what they are doing is incorrect or risky. When someone files a complaint to Cal/OSHA, the department will follow up on the information they receive. If it appears to be accurate, they may issue a citation to the business. In order to clear the citation, businesses must post the citation for three working days or until it is corrected. They also have to submit proof that they fixed it and post that in the work area, as well.

How Can Contracting Businesses Avoid Violations?
In the short-term, there are many things that you can do to avoid having to deal with safety violations. Cal/OSHA publishes a variety of guides for construction businesses to follow. These include:

• learning safety regulations based on the task
• providing personal protective equipment to employees
• posting guidelines in a place that employees can easily access
• reporting serious workplace injuries or deaths as quickly as possible

When implementing a new program, business owners may want to use a safety checklist for each part of the jobsite. Having a site manager or other person in an overseeing capacity complete the checklist will help to confirm that the safe processes are not just understood, but followed consistently.

What Can Businesses Do to Prevent Unsafe Workspaces?
Ultimately, unsafe construction sites tend to be a combination of lack of information, limited availability of safety equipment and minimal incentive to follow the rules. Businesses may be required to send employees to regular safety training, to teach or reinforce safe procedures. Providing time each year for workers to get a refresh helps to ensure that they remember what to do.

Avoiding injury isn’t just about avoiding fines that may come from serious safety violations. As a contractor, you’ll often be as involved in the daily tasks of a project as any of your employees. Attention to safety can help keep you off of Cal/OSHA’s list, but it also protects you personally.

In construction, California businesses are always on show to prove that they provide a safe workplace. When you know what to do, you can avoid injury and violations that slow down your work. To begin building a safe contracting business, visit CSLS today!