It seems like every time you start a project, something else breaks. Equipment is expensive, and whether you rent or buy, you still need to ensure that everything you have is ready for use. Equipment maintenance takes time and doesn’t bring in the big bucks, but there are plenty of good reasons to make it happen. Here are a few tips to understand why regular maintenance is important, and how you can set a reasonable schedule to track it.

Make Maintenance a Priority
When you get into the busy season, it can be difficult to imagine having spare time for equipment maintenance. You may be running almost nonstop from dawn until dusk, and you need those tools and machines sometimes on a daily basis. Paradoxically, this is why upkeep is so important. If you can’t think of giving a day toward maintenance, you definitely can’t afford to lose the machine for a week or more. If you’re running on tight margins, paying out for repairs will cut into your bottom line much more than scheduled upkeep. When you make it a priority in the first place, you can avoid the bigger issues that cut into your project timelines.

Document Your Equipment Upkeep Needs
You probably keep some kind of inventory for supplies. Your equipment needs the same level of attention. Tracking the state of your assets is a good business practice, no matter what industry you’re in. If you don’t have a lot of equipment, you might wonder what is the point of documenting the fact that you have a drill. The benefit of documentation is that you know what you have, and you can make a plan to maintain it from there. Write down:

• all of the equipment you own for your business, including administrative tools
• when you bought it
• how long it should last with good care
• frequency of upkeep
• the last time you maintained it

This will give you a single point of reference for planning.

Research Maintenance for Rented Equipment
With such a robust market for equipment rentals, you may not have much owned equipment at all. You still have to keep track of it. Rented equipment can save you a lot of money, but only if the tools are in good shape. When you research rentals, follow up with the company to find out when the tool or machine was last maintained. If you’re keeping the equipment for a longer duration, find out if upkeep is part of the service, or if you’re on the hook to do it before you return it. If a company can’t show you how often they attend to their inventory, look elsewhere.

Balance Work and Downtime
It can be tempting to do it all at once, but you need to find a balance. Try to schedule major maintenance, upgrades or repairs for the slow season, usually winter. Otherwise, book a small amount of time each month to inspect your equipment. If you have to send something away for maintenance, mark it as unavailable in your inventory. It’s not a bad idea to build some redundancy in the system, particularly for smaller items. If you have a bunch of hand tools that run on batteries, make sure you have enough batteries to go around.  

Make Equipment Maintenance Efficient
Since asset management applies to almost any business, there are a ton of tracking programs available. If you have an app or software for your inventory, it may have classifications to help you manage your equipment as well. Many systems also let you track how you use tools. You can set up a system that uses barcodes that your employees can scan every time they pick up a piece of equipment. This will help you track which tools are getting used more often, which may indicate a need for inspection more frequently. It can also make it easier to identify when a piece of equipment is having problems, because people aren’t using it as often as they should.

Equipment maintenance is important for your business success, even if it feels like something you can put off. Making it a priority helps you finish projects and avoid expensive repairs. To start building your career in construction, contact CSLS today!

When you put in a bid for a project, you generally expect to prove that you can actually do the work. But since you have so much riding on every project you do, you should probably be doing the same thing for your clients. Every contractor has a horror story about a client that seemed legit and then bailed on the bill at the end. If you don’t want this to happen to you, there are a few things you can do to follow up on a client’s ability to pay. Here are some things to ask for, and ways to request them without alienating prospective customers.

Set a Pay Interval You Can Manage
It’s really tempting to let clients pay you whenever it suits them. If you do this long enough, you might go out of business. Companies that have a lot of overhead may teach you that it never suits them to pay you in a timely manner. Instead of catering entirely to their preferences, find out the regional billing standards for your industry. Depending on the project, you might charge the full price upon completion, or bill with 30, 60 or 90 days to pay. Don’t let this aspect of business administration slip through the cracks. You don’t want to discover that they had the money when you did the project, but spent it by the time you billed them.

Know When You Can Ask for Financial Verification
There’s basically two times that you can ask for proof that a client has funds sufficient for the project: at the beginning, and if something happens during the construction process. The latter can create a sticky situation, so it’s better to find out about this before you start ordering materials and scheduling hours. This is also a good opportunity to ask about timelines. If the property owner’s ability to pay is contingent upon them securing a grant or other public funds, make sure they got it and will have the money ready before you start.

Get Evidence From the Start
Beyond feeling comfortable that the client will be able to meet their end of the deal, the kind of evidence you collect depends how far you intend to take it if the client doesn’t. Usually, you can ask for verification of ability to pay in the form of a loan, offer of credit or a bank statement showing sufficient funds. If the client fails to do on your initial request, it’s probably best not to do any more work until they can provide evidence. If you bill for portions of the project in stages, send invoices on time and track when they are paid. In the event that you have to pursue someone to get the rest of your money, these records will be necessary.

Avoid Project Scope Creep
Of course, there are instances when everything checked out at the beginning, until the project exploded in scope. This underscores the need to give a clear estimate before signing any contracts to provide service. If the client changes their mind about something and requests a change, clarify those changes in writing and have everyone sign a new contract. This helps avoid confusion at the end, especially if the alterations mean the total is higher.

Choose a Reliable General Contractor
At times, part of your work might involve subcontracting to another general contractor. As a general rule, the general contractor for the project is the one who has both the right and the responsibility to verify a client’s ability to pay. And typically, you’re going to wait to get paid until they do. As a result, you’ll do better to work with general contractors who have experience and the savvy to know how to follow up with clients for this information. That way, you’re less likely to be left on the hook for your expenses if the project fails.

Keeping the income flowing through your contracting business is the way you succeed. That takes clients who can pay for the services they request. For more information about starting a successful business in construction, visit CSLS today!

Starting a career in new home construction can be easy or difficult, depending on the timing. But even if you stay out of this part of the industry, the sale of homes (and property in general) can affect the kind of business you get and how much people are willing to pay. This guide identifies the construction fields that are often affected by the strength of the housing market, as well as a few tips to keep your business’s demand steady.

Interest Rates and Construction
In order to see how the housing market can affect construction, it’s important to understand how the economy influences both. When housing prices rise largely unchecked, as they did in the middle 2000s, the Federal Reserve may raise interest rates. This makes it harder for buyers to qualify for loans, and those who can won’t be able to buy as much. That slows the market, which can cause home values to plateau or even drop. This isn’t necessarily a bad thing if it happens in small increments, unlike the huge housing crisis of 2008. As a business owner, you should keep an eye on the strength of your target market. If prices are running high or starting to drop, you need to plan for a slowdown in business.

Indoor Renovations
When it’s a seller’s market, homeowners have a lot of potential buyers for any given property. This means that they are more likely to request renovations as a way to secure a higher offer, not to get someone in the door in the first place. People don’t feel so bad paying $20,000 or $30,000 for an upgrade to the kitchen if they think it will get them $50,000 when they sell a few months later. You can make this a reasonable transaction for you by verifying that your clients have the means to pay before you start the job. This way, when you come to collect payment at various stages of the project, you’re more likely to get it.

Landscaping and Exterior Renovations
Like kitchen and bathroom renovations, roofing is a field commonly affected by changes in home sales. Since this tends to be one of the most expensive home improvement projects, especially using materials like metal, homeowners tend to save it until they absolutely must get it done. You just want to make sure that they’re ready to pay when they ask you to take it on. If you’re in a luxury market like outdoor pools or exotic landscaping, it might also be worth picking up a few lower-end specialties. When values fall and homeowners have to pay cash, they often make less-expensive choices.

New Construction
Have you ever driven by a new development with a handful of half-finished houses just sitting there? There were quite a few of these about 10-15 years ago. When the housing market corrects, it can be harder for everyone to get funding, not just homebuyers. Developers faced with the prospect of no buyers may not want to invest another dime into completion.

If you’re subcontracting for a developer, it’s worth investigating how well they know the local market and how new home sales are doing generally. If the whole thing fails after construction begins, do you still get paid? The last thing you want is to sign onto a project with a bunch of buyers that fail to get loan approval, or do work that stops halfway through from lack of funding.

Commercial Developments
All of this can spill into commercial developments, as well. A development or revitalization of a city usually involves creation or renovation of shopping, dining and entertainment outlets. If people aren’t buying homes in a newly-developed area, there will be less demand for commercial spaces in the same region. Keep track of the market in any given area, and as you would for a residential developer, make sure the person hiring you for commercial construction is likely to pay.

A strong housing market can be a great time to work in construction. Knowing what to do when it isn’t helps you stay on the path during every season. To find the licensing program that meets your career goals, visit CSLS today!

Traffic in California is a problem. Even people who live out in the middle of nowhere understand this. A large population with limited housing options that are generally too expensive creates a level of sprawl with huge commutes and a heavy dependence on personal vehicles. Yet, this situation isn’t intractable. Construction business owners do have ways to cut back on consumption and traffic without having to bring all your tools and supplies on public transit. Here are a few things you can do.

Analyze Vehicle Use
In order to see how your vehicle use contributes to congestion, you first have to analyze what you’re doing. When you go to a construction site, ask these questions:

• Do you often find a lot of parking?
• How much of it are you taking up?
• Are there enough spaces for other contractors needed for the project?

Next, think about the vehicles you choose. Trucks and vans are great because you can store a decent amount of materials and equipment. How many do you really need for the job? Finally, look at the time of day you go. Construction work outdoors often follows the light, which means you may get an early start, especially in the winter. If you’re waiting until rush hour to get on the road, you may be making traffic (and resulting emissions) worse.

Carpool to Construction Sites
The simplest solution is to carpool, although this isn’t always simple as it sounds. If you have five people in your business and you take five cars to every jobsite, it stands to reason that you can do fewer. Some cities in California have implemented policies that require contractors to handle employee parking, as a way to avoid taking away a limited number of free spaces for the public. This practice aims to discourage contractors from leaving this situation to chance, and encourages carpooling. If it’s an option for your business, it is worth seeing if you can make it work.

Streamline Construction Processes
The idea of having work be relatively close to your home, or live close to where you work, sometimes feels like an artifact of the last century. When millions of people live 50-75 miles away from work and that may be true in most parts of California, sometimes the answer is to rethink your processes in general. If you live a considerable distance from most of your clients, you may want to try limiting commute time. For example, you could look for subcontractors closer to the jobsite. If they don’t have to drive as far, it will help cut down on the total traffic.

If you have a warehouse or other facility where you can work near home, you might see which processes you could bring in-house instead of onsite. Modular construction and 3D printing are making it much easier to bring a nearly-finished component to the jobsite for construction. This cuts down on the length of the project and the number of days you need to be there.

Rethink Your Business Location
Some people thrive with a long commute. They say it gives them time to think and unwind from a long day. But if you’re already working 10-12 hours a day on a project, an extra hour to and from can really cut into your leisure time. If this is starting to feel like a fact of life and you hate it, it may help to explore other regions to look for clients. Depending on where you live, it may or may not include moving your home to a different place. But you might find that there is just as much work in your field in a closer place that isn’t the center of a huge metropolis.

Traffic is a big part of living in California, but it doesn’t have to be a nightmare for your business. More importantly, you can make changes to improve it. If you’re ready to discover other benefits of being a licensed contractor in California, contact CSLS today!

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!