The last few years have put a big emphasis on commercial construction. Urban renewal in areas like Los Angeles opened up billions of dollars in projects on the docket for years into the future. But residential construction still has a long way to go before housing exceeds demand in the state. If you’re thinking about getting into residential construction, here are the risks and rewards you should consider.

California’s Housing Needs
If you had to put a label on the need for new housing in California, it might be something like “stressed and pressed.” Governor Gavin Newsom campaigned on the idea that he would fight to build 3.5 million homes by 2025. Well, it’s 2020, and that is five years away. He argued that California could have a population as high as 50 million by 2050. And while that seems like a long time to go, the pressure to build new housing is already here.

For construction professionals looking into residential development, demand is not the biggest arbiter of their success. There is so much demand that you may have a ton of options to consider. Access to skilled workers and the ability for people to afford the housing that is built makes a more significant difference in how it works out for your contracting business.

Fluctuations in Demand
If you want a sense for how variable the market can be for residential development, just read a few newspapers from the past year. In the summer of 2019, experts were proclaiming that housing was down far below 2018 levels. They hinted that the market was just starting to slow down as people have predicted would happen nationwide. But then in the fall, applications for housing permits positively exploded, blowing away the previous year’s numbers. Demand in construction tends to fluctuate by season, but this is a completely different situation. Residential construction companies have to be able to meet the demand when it comes. This might be cyclical or a constant onslaught.

Varying Housing Types
Part of the reason that housing development seems to be shifting is that it is. With a lot of cities that are already built-up, housing can only go in two directions: up or out. Out is proving to be trickier to manage, with the kind of urban sprawl that makes housing difficult to manage. No one wants Eureka to become a bedroom community for San Francisco. This leaves up. And sure enough, the dramatic increase in housing permits came mostly for multifamily units. This means that if you’re looking to specialize in single family homes, you may want to rethink that idea. By comparison, getting into multifamily housing may be an excellent consideration for long-term viability.

Housing Market Pressure
Of course, there’s what builders want to do, what property owners want to do, and what people can afford. This, plus the general trends of the housing market as a whole, creates a unique set of complications that can spur or stymie the market where you live. Right now, housing prices continue to rise virtually unchecked in many parts of the state. This means that there may be housing available, but most people can’t afford to buy it.

If you live in a particularly expensive region or you’re looking to specialize in luxury homes, you have to keep a close eye on the market. If housing prices plummet, demand for developments in certain areas may also decrease. Affordable housing always has a market, but what counts as affordable changes by the year. Researching these concerns may help you determine the best part of the state for you to establish your business.

The industry for residential housing in California is big but somewhat underprepared to meet demand. If you want to take advantage of the push for housing that people can afford in the state, now’s a great time to get started. Visit CSLS today to find out how you can begin the path to your own contracting business!

When COVID-19 first started to wreak havoc in the United States, many companies made the difficult decision to close up shop or suspend operations. In some states, they were required to do so by law. But now that many regions are starting to open up again, contracting businesses are discovering a new problem. Construction has long had a labor shortage, but now it’s even harder to find people to do the work. Here are a few ways you can help ensure that when you start a new project, you’ll have a better chance of hiring the skilled workers you need.

Keep Tabs on the Employment Numbers
When you look at employment numbers as a whole, you should note that a job isn’t the same as another job. For example, if the United States lost 3 million jobs in one week and added 6 million jobs the next week, that doesn’t mean that the previous 3 million people got their jobs back. In fact, it also includes things like temporary labor which usually pays less and has lower stability than regular full-time jobs. Pay attention not just to the numbers, but what kinds of jobs are lost and which ones are becoming available. This will help you to determine which areas of the industry may be the most difficult to fill in the coming months.

Research the Fields with the Greatest Shortages
The thing about construction’s labor shortage is that it’s variable. This means that some fields have had a significant flow of retiring workers, while other fields have remained fairly stable. This is specific to certain types of jobs, but also regional shortages. That’s why you may occasionally read about workers in the US heading to other parts of the world to help with project backlogs, and vice versa. Figure out which jobs are the hardest to fill in your area. If you haven’t chosen a specialty yet, this might be a useful opportunity to think about future career options.

Plan Ahead for Delays
You probably already know that what used to take a few weeks will now take longer. In fact, lots of people weren’t good at estimating a project timeline to begin with, so now the numbers are really off. If you plan for delays well in advance, that will give you extra time to ensure that you can find skilled workers for every task. Add padding wherever you need it and make sure to schedule difficult jobs in advance.

Verify Financing Before Signing Contracts
The high cost of land for housing and commercial projects in California has long made construction a slightly riskier investment. There’s a chance that a builder, developer or property owner may have an idea but lack the funding to support it. The last thing that you want is to get halfway through a project and realize that the entity that hired you to do the work no longer has the money to pay you. This underscores the importance of vetting clients’ ability to pay before you sign contracts. Unlike many types of public projects, private construction may not have access to guaranteed funding. You’ll want to ensure that they have a high likelihood of getting the financing they need before you start.

Consider Publicly-Funded Projects
A handful of advocacy groups within the construction industry have recommended that state and federal governments consider using construction projects as a way to support the economy throughout 2020 and in the years to come. After all, if a recession causes a significant decrease in new construction starts, then it’s possible that millions of jobs will be lost like at the beginning of the housing crisis. It’s hard to anticipate how governments will respond. But it’s worth keeping in mind that projects with public funding may be more stable than private jobs. This isn’t always the case, but budgets set in advance and a certain degree of public transparency can make it easier for you to determine which public projects are more likely to be safe.

A labor shortage means that you may have an easier time building a career, although you’ll need to make the right choice. To get started, contact CSLS today!

Experts believe that while the first wave of COVID-19 is starting to ebb in many regions, the threat may be around for much longer. If you are headed back to the jobsite, you should know that the virus is still a concern, and not just because people are afraid of contracting it. Here are several ways you can assess your jobsite’s risk and plan to minimize them.

Watch for Regional Spikes in Cases
The number of COVID-19 cases in your local area is most likely to serve as an indicator of what you can expect for yourself and your business. Since you’ve probably been watching this information for months, it’s tempting to let your research fall to the wayside under the assumption that you’ll hear about it if there’s a significant spike in cases. However, the way that people have been inundated with information about COVID-19 may make it easier to tune out such news. Set a reminder to take a look at the numbers of new cases in your area at least once a week. Pay attention to other figures like the number of people who were tested. This will help you determine if a major resurgence is on its way.

Look at the Most Likely Areas for Transmission
There are certain areas of each jobsite where people are more likely to congregate. They typically center around access points, break areas and practical facilities. In some cases, you can set limits on the number of people who can be there at any given time. However, the last thing that you want to do is to start micromanaging people’s use of the bathroom. If you cannot reasonably control who is in a particular space at a particular moment, then you may want to increase the number of facilities or increase the level of sanitation. For example, if you find that there seems to be a long line at a particular handwashing station, you can add a second one several feet away. This will cut down on wasted time and minimize social contact.

Identify Busiest Times in the Schedule
Staggering work times may be one of the best ways to manage risk. This doesn’t mean that you have to have people working onsite 24 hours a day. Staggering the times that people begin and end their shifts by as little as 30-60 minutes may dramatically decrease the risk of transmission, if you can otherwise minimize contact throughout the workday. Make sure that everyone on the jobsite understands the guidelines and can commit to following them. If you’re trying to stagger lunch breaks but workers don’t comply, you still have a higher risk situation.

Avoid Dismissing Reports of Illness
By this point, you have probably seen or interacted with dozens of people who told you that some obvious symptoms they have is an indicator of another illness. For example, you might have someone say that they are sick, but it is just allergies or a cold. Since COVID-19 symptoms can present differently among people, and it’s not always easy to figure out the cause, this may be an indicator for further investigation. Above all, try to avoid developing a habit of encouraging employees to dismiss mild illness. Many cases of COVID-19 have had minor symptoms. This means that someone who does not appear to be particularly ill could possibly make others very ill.

Make a Plan for Necessary Site Visitors
As a business owner, it’s not reasonable to dictate what people do while they are not working. You can make recommendations about what workers can do for their own safety and out of their colleagues. You can also set rules for the types of visitors who are allowed at the jobsite and how they must conduct a visit. For example, you may need to hire inspectors throughout a particular project to ensure that the work meets certain guidelines. When they arrive, you can request that they follow OSHA guidelines to minimize transmission of diseases. This may include things like wearing personal protective equipment or washing their hands when they arrive.

Managing risk is just another day as a contracting business owner. To start building your business, visit CSLS today!

If you do most of your work outside, it makes sense to try to stick to the sun when planning out your regular work schedule. During the summer, this is fairly easy to do. Once winter hits, it’s harder to make enough time in the day with the hours of daylight. Throw in employees who need to battle rush hour and other scheduling concerns, and you might need to completely rethink it. Here’s a few ways you can approach scheduling your workday in your business, so that everyone can get their work done with the least hassle.

Understand Flexible Scheduling
If the concept of “flex time” feels like something more suited to a tech startup, it might need a little clarification. Many people believe that keeping a flexible schedule means that you never know when someone is going to show up or leave. In reality, offering a flexible schedule to your employees usually requires a clearly-defined schedule. That way, everyone knows when they’re supposed to be at work. Giving people the flexibility to determine if they need to show up early so they can leave early can make it easier for them to maintain a work-life balance.

Determine Your Priorities
Before you start changing the schedule, you want to set a few priorities. After all, you may be flexible enough to allow some of your employees to burn the midnight oil. Your customers, on the other hand, might expect communication during normal business hours. Start with the things you need to keep your business going, like sending invoices, following up on sales leads or submitting bids. Make sure you have someone on the clock at the right time who can be responsible for the most crucial daily tasks, even if it comes at the start or end of their shift.

Rethink Your Existing Schedule
If you’re thinking, “My schedule is already flexible because I am literally always here,” it might be time to rethink how you approach your own workday. Burnout is a big deal in construction, in part because people tend to work such long hours. But 15-hour days for weeks on end aren’t a very good long-term strategy, especially for people who have obligations outside of work. Taking this as an opportunity to improve efficiency might be an ideal path to getting the same amount of work done without running yourself into the ground.

Consider Different Scheduling Options
If you’ve ever done shift work, you know that this is a standard in a variety of industries. There’s the day shift, the swing shift that starts in the afternoon and the graveyard shift running overnight. When you’ve got a big push to get a project done and you’re working some long hours, building in two separate shifts for your employees can allow you to stay on schedule. Otherwise, you might consider operating a 12-hour workday where people are expected to show up at a specific time during that interval. Just make sure that your workflow permits having one skilled worker showing up later or earlier than another.

Evaluate How You Attract New Employees
With a labor shortage, you’ve always got to think about how you bring people on and keep them for the long-term. Offering a flexible schedule might be an effective way to entice students or others with limited time to get on board early. Give yourself some time to work out the details, so you don’t have to change the schedule on a whim if it’s not working. In the long run, giving your employees flexibility could open up different demographics of workers who might never have considered your business beforehand.

Keeping a business running is a lot of work, but sometimes tweaking the schedule makes a big difference. These tips can help, as well as a solid grounding in the construction field. To start your career, visit CSLS today!

In an industry that is dictated largely by season and often unpredictable, it’s hard to imagine a time when you’d ever want to decline bidding on a project. However, there are cases when you might get in over your head on a project that has major flaws. When you’re first starting out, you don’t want to be too selective in the kind of work you’ll do related to your business. But there are definitely a handful of red flags you should watch for so you know when to pass. Here’s what they are, and how you can decline projects professionally.

Client Doesn’t Know What They Want
Sometimes, you may get a client who could be good, but they’re too far up the sales funnel. Many people start reaching out to contractors before they have a fully-developed sense of what they want from the project. This can be a problem if you try to push them to commit to details too early. They may decide that they want something smaller, or fail to have the budget necessary for the project they have in mind. Instead, give them a few resources they can use to ideate and get a sense for the total cost, as well as your contact information.

Client Won’t Commit to a Bid or Estimate
There’s a reason everyone in business recommends getting the details in writing. Without them, it’s just your word against your client’s. Clients who push away the idea of a signed contract in favor of a verbal conversation can create big issues for the project. They may fail to understand the details and therefore underestimate costs. They may deliberately confuse the issue in an attempt to get you to do more work than you agreed to do. They could even expect you to change the project halfway through. Make it a regular process to get a signed contract before you start doing any work.

You’re Unsure if the Client Can Pay
Making sure the client can pay applies to big and small projects. When you’re working with property owners who have little experience in construction, get a firm number on their budget before you start planning. If your bid is coming near the top, make sure you put enough in your estimate to cover all costs. Clients may not be able to pay more than their listed budget, and you might have to fight to get what’s owed. For larger projects, ask for evidence that they have the funds to pay you at the right times. If they can’t, tell them that you’ll be willing to start work once they can prove they have funds in place.

Client Asks for Unreasonable or Illegal Terms
There’s a difference between making a stretch to meet the client’s terms and completely blowing away all your boundaries. You want to set a clear threshold between these two so you don’t end up in a situation you can’t manage. Some clients want a rush job that simply can’t be done in the time allotted. Others may ask you to skip getting permits or other required items to save money or time. These requests are not just unrealistic–they also put you at risk. Explain that your processes include adherence to local guidelines, and that you can’t change them without risking liability.

Trust Your Gut Instincts
When you’re trying to get established or you’re stuck in the middle of a slow season, it’s tempting to take any work for the sake of income. But there are instances in which the work is going to cost you more in effort and frustration than the benefit of payment. If the red flags are piling up and every instinct tells you to decline, it’s often best to respect it. Sticking to reasonable business operations will help preserve your abilities for the next project.

Running your own contracting business involves learning when to take new projects, and when to let them go. It begins with a solid grounding in the rules and standards of the construction industry. To start your education, visit CSLS today!

Having a lot more time to think about your workflow outside of the jobsite might make you realize that your workspace isn’t working. And even if it is, it may be a good opportunity to revisit what you’re getting from the space, and what you could have instead. A sudden vacation of a lot of commercial spaces due to COVID-19 has changed the dynamic. It’s also changed the way you think about doing construction, on and offsite. These five aspects can help you determine if you should stay where you are, or consider moving to something different.

Your Workspace Needs Have Changed
It would be hard to find some aspect of your workflow that wasn’t changed by COVID-19, but your workspace may be the biggest. If you were accustomed to doing most of your work onsite and relying on a separate workspace for administrative tasks, you may find that this no longer suits your work dynamic. Many companies are shifting to offsite construction, mostly through the use of modular building practices. If you have discovered that you need much more space than you had before, or much less, it may be time to think about moving.

You’re Overpaying on Your Rental
A sudden decrease in demand for workspaces has led to a drop in prices in some areas. If you are overpaying on the rent you pay for your office or shop, you may be able to negotiate a better deal right now. Do some research in your area to see how often owners raise rates, and how much. It also may be practical to take this information to the owner or property manager of your current space, in the hopes of getting a discount on your next renewal. Keep in mind that if you have an active lease that’s not on a month-to-month schedule, you may have to pay hefty fees to break it early. It may or may not be worth it, so be sure to do the math before you pull the plug.

You’re Barely Making Ends Meet
Getting a big discount on rent for a workspace can be a boon, but you’ll pay for it at first. Rentals usually involve deposits and possibly the first and last month’s rent required in advance. While this might not be a big deal for an established business with a lot of assets, not everyone is feeling that kind of stability right now. In some cases, trying to cut your future expenses may have the potential to sink your business in the present. If your cash flow is running too close to empty, you may be better off waiting.

Pandemic Closures Limit Your Access
Many office complexes and coworking spaces closed during the pandemic, which made it far more difficult for tenants to get in and use the space. And while some landlords compensated by discounting or even canceling the rent, it was hardly the norm. If you were one of the lucky ones who enjoyed unimpeded access to one of these spaces, that stroke of fortune might serve you well in the future if closures happen again. On the other hand, if you were unable to retrieve your equipment or complete work offsite because your workspace was closed, you may need to consider alternatives.

You’re Not Sure What You Need
It’s hard to predict where construction will be in six months, much less in a year or two. As such, it is perfectly fine not to be certain what you need right now or going forward. This is a good indicator that you should stay put. If you can, give yourself the time to think. Revisit the subject in a month, when you have more information.

Finding a great workspace may be easier in the next few months than it will be next year or the year after. If your current situation just isn’t working, your contracting business may thrive better somewhere else. For more information about running a modern business as a licensed contractor, contact CSLS today!

If you look back at the way you thought the year would go in January, it might be hard to imagine a different conclusion. So much has changed in the past few months that the whole world seems almost unrecognizable. Yet, work will continue, and over time, you’ll find ways to get back to the jobsite. Here are five things you can expect will be significantly different, so that your contracting business will be better prepared.

Long-Term Changes in Demand for Projects
Industry experts have wondered regularly over the last couple of years when the backlog of construction projects would finally ebb. While it seems that 2020 has tipped the scale as they predicted, most people did not anticipate the way the demand for projects would change. In most instances, the predictions included a general decrease in demand for all projects, not a sharp decline in certain areas.

In this case, demand for commercial construction, specifically hotels, hospitality and retail spaces, has significantly dropped. Large hospitality industry stakeholders like Airbnb have seen a huge decline in demand and revenue. This means that while construction may see an increase in certain kinds of commercial and residential projects, there will probably be a notable decrease in demand for projects like these.

Adaptation to Remote Work and Project Management
Although it isn’t usually possible for construction-related businesses to do all of their work offsite, you’ll probably observe an increasing reliance on remote work. This may also be a good time to re-examine your project management practices. If you’re in the habit of keeping an eye on people as they work, this will probably have to change. Instead, you may find more opportunities to give your employees greater freedoms to control their own productivity. You may also discover developments to the modular construction segment of the industry. In fact, that may offer new career fields or an expansion of existing ones.

Heavier Reliance on Technology
Just like you can plan to spend more time off the site going forward, you can expect to use more online or virtual tools to collaborate and communicate. This isn’t necessarily a bad thing, of course. Using tools to get certain aspects of the job done more quickly increases your efficiency and may also improve your income. However, not everybody in the industry is excited to grab the latest app or device. This means that you may need to do more work to persuade subcontractors, clients and employees to get on board.

Increasing Project Delivery Times
Ultimately, one of the biggest hurdles that contracting business owners and clients alike will have to accept is that projects will simply take longer. The need to invest more time into safety, coupled with the importance of reducing the number of people on the site at any one time, makes it harder to accomplish more in one day. You may be able to minimize the worst of it by scheduling separate shifts. This may not be possible for all projects, or for all regions of the state at any time of year. If you want to reduce overrun in your project timelines, you will need to add in these factors and adjust your commitments as needed.

Greater Attention to Site Cleanup and Sanitation
Dropping work equipment and leaving debris at the jobsite was neither a clean nor sanitary practice. But now more than ever, people are putting their own lives at risk if they fail to clean up after themselves and ensure a sanitary workspace. The level of risk in any given area is going to depend on the state of the virus at the time. However, contracting businesses should prepare to clean and sanitize equipment and protective gear after each use. They will probably also need to provide PPE like masks and gloves, and additional hand-washing or sanitizing facilities.

COVID-19 has changed the world, and in many cases, your contracting business. The way you move forward helps determine your future. To start on your career path, visit CSLS today!

If your goal has always been to become an independent contractor, the independent part might be one of the most appealing aspects. You get to set your own hours and run your business in your own way. In an economic downturn where the whole industry has been turned on its head, you may need to collaborate. Here are five factors that can help you decide if forming a partnership would be a better path forward.

Related Fields
In order to form a partnership, you need to have someone whose skills and services relate closely to yours. If you’re finding that there are too many contractors and not enough jobs in your own field, you may want to find someone whose services and products are in an adjacent field. For example, if you find that you’re hiring the same subcontractor every single time you have a project, this might be an indicator that you have two businesses that could work well together. Be wary of duplicating your own skills, though. Unless you have more work than you can handle, doubling the paycheck obligations may not be enough.

Working Relationships
As a general rule, business partners get together as a result of a long-term professional relationship or other type of relationship. This means that you have to have somebody in mind before you can form a partnership. Advertising that you’re looking for a partner may take a lot longer, and it would be harder to tell if the people who are interested would make a good candidate to partner in your business. Think about the people that you have a good working relationship with, who aren’t employees. If you don’t know of anyone who meets this requirement, it might be time to beef up your networking skills.

Financial Stability
In the middle of an economic downturn, no one may truly believe that they are financially stable. But the last thing that you want when you start a partnership is for one person to be on great financial footing while the other is inches from disaster. This kind of imbalance can create a lot of conflict in the partnership, that may ultimately cause it to fail. Make sure that you are forming a partnership so that you can both help each other, instead of one person providing financial support to keep the other one going. A slight imbalance is manageable. But unless you have so much work and stable funding guarantees, you’re probably going to struggle to support two on the money that used to support one.

Balance of Skills and Services
Similarly, you want to confirm that both professionals have at least a moderate wealth of skills and services that they can provide. This depends greatly on the field you’re working in, and the nature of the industry at large. But typically, you both should have a variety of advantages that you can bring to the table. Don’t forget soft skills and other needs for business administration like sales and marketing. Ensuring that you can split tasks in a way that feels even to both of you will help to guarantee that everyone remains satisfied with the partnership going forward.

Collaboration
Ultimately, not everyone is cut out to be in a partnership. Sometimes, you can end up in a partnership with someone that is simply unsuited to work with you or vice versa. In other cases, you are just better off working by yourself. Think about the way you collaborate. If you can set aside your individual ambitions and work together to reach a consensus almost all of the time, then you will have a much higher chance of a successful partnership. By comparison, if you have a difficult time conceding the point to others, that may be a sign that you will have a lot of conflict in a partnership.

Forming a partnership is one way to run a contracting business, but you need to be sure you can do it right. To start on your career path in construction, contact CSLS today!

When you read about consumer or business confidence, it feels like it could mean a variety of things. What does it mean to be confident in a particular aspect of the economy? How does this data change the way that you make decisions for your contracting business? And what if people turn out to be wrong? With this information, you’ll understand what confidence means in finance and how it may affect your contracting business.

What Is Confidence?
If confidence feels like a somewhat nebulous standard of measurement, that’s because it is. Confidence is the way that people feel about themselves or some aspect of their world. It is not always an indicator of the way things actually are. However, finance experts use confidence as a way of determining what may happen in the future. People make decisions based on the confidence they have in certain aspects of the economy. For example, contractors look at their existing and expected sales and profit margins as a way of determining how confident they are in their own fields for the next several months or longer. It’s not a certain way of predicting the future, but it helps complete a more robust picture.

What’s the Difference Between Consumer, Investor and Contractor Confidence?
Now that you have a general idea of what contractor confidence means, you should know that there are indexes meant to measure confidence in other aspects of the economy. For example, you may read about increases in investor confidence in a thriving stock market, or decreases in consumer confidence based on rising housing prices. While you must keep in mind that confidence is highly subjective and heavily dependent on specific measurements, it can still give you an idea of what people plan to do with their own money. Specifically, if confidence in the economy starts to drop, you’ll notice that people will become more reserved in the types of financial risks they are willing to take.

How Does Confidence Affect Your Business Right Now?
At the moment, contractors are reporting lower levels of confidence in their ability to continue to grow sales and keep their profit margins high for the near future. As a business owner, you can imagine what those kinds of concerns may do for the way that you run your business. If you’re worried that you won’t be able to get enough sales this year, you might limit your overhead as much as you can. You may decide against hiring more workers, and if the trend continues, you may have to consider laying people off. This can affect the way that your business runs. That might mean that you have a simpler workflow, or it could mean that you have fewer services you can offer and more limited selection of projects.

How Can Low Contractor Confidence Change the Construction Industry?
Confidence in one aspect of the economy can change on a dime, but it depends heavily on the pivot point. Once people are worried about the future of their contracting businesses, they may make decisions that affect their ability to continue the business long-term. If these changes happen at the same time as lenders tighten loan requirements, or at the same time that a lot of other industries are noticing a drop in sales, there may be broader effects. Ultimately, part of rebuilding the economy after an economic downturn or recession lies in establishing confidence once again. After the last recession, it took a few years before the construction industry was able to run at levels even close to where they were before the housing crisis.

Contractor confidence may not mean a lot to you yet, but it poses serious long-term effects to your contracting business success. For more information about starting on a construction career path, visit CSLS today!