You’ll learn the pros and cons of being a speculative or spec builder (as opposed to a contract builder.) If you’re not familiar with those terms, a spec builder is one who will select a site, choose a design, build a home and then sell it to a client. A contract builder is a builder that you hire to build a home for you. By the way, spec building is how I suggest you begin rather than building a home for somebody else. I’ll explain why later.

I’ll begin by showing you how to be one of the best spec builders in your area, even if you’ve never before built a home. I’ll expand this information by discussing points that are unique to spec building. Next I’ll discuss points that are unique to contract building, and points that pertain to both spec and contract building.

A Word Of Caution

I want to stress that when starting your construction business, you must separate your business from your personal life. In the early 70’s I was in real estate commercial sales. I barely survived a major recession. Almost everything I owned was in my name and most of it was repossessed. Had I known then what I know now, I’d have retained that large home, that Mercedes and that airplane.

In the construction industry there are many things that can happen to you, some of which you have absolutely no control over. According to the 2008 Annual Report by the National Center for State Courts, in 2007 Americans filed over 90 million lawsuits, more than a third of which were civil cases. This does not include the volumes of legal disputes that were settled before a lawsuit was ever filed. Based on the sheer number of legal disputes that arise, in and out of court, one could say that most Americans run the risk of being involved in a legal dispute at some point in their lives – for many people, more than once. This is especially true for those who work in professions with high lawsuit vulnerability such as doctors, dentists and, yes, especially builders! You should invest in hiring professionals to help you protect your assets. It’s easier than you may realize. This is one time you can’t procrastinate. I can tell you some great horror stories but I don’t want to scare you this early in the game. Anyway, don’t live in fear of what might happen. You only lose if you don’t play.

I. Speculative Building

A. How To Be One Of The Best Spec Builders In Your Area

Before you buy a lot, before you buy any house plans, the first thing I want you to do is put together your success team. I call this the Henry Ford philosophy. If you read about Henry Ford, you’d learn that some people considered him to be illiterate. He once sued a Chicago newspaper that wrote an article claiming he was illiterate. In the lawsuit, Henry Ford emphasized that he didn’t need to know everything about everything because he hired experts to assist him in all that he wanted to do. This left his mind free and clear to do all the things that he really knew how to do. Well, I’ve learned from that philosophy myself over the years. I realize there is not enough time in this life to do everything. I now hire experts to assist me in my decision-making, and it has been a positive factor in my success building homes.

Your success team should include the following:

1. Real Estate Agent

2. Landscape Architect

3. Artist/Architect

4. Kitchen/Bath Designer

5. Interior Designer

6. Lighting Designer

I’ll discuss each of these team members in detail as we go through the course. Don’t be concerned. When you start out, you don’t need the best. These team members are more affordable than you could possibly imagine.

B. Obtaining Your First Loan

Let me tell you a story. And the further you get away from this story, the harder it’s going to be to borrow money to get started.

Let’s assume that you’re gainfully employed. If you’re not employed, but instead are self-employed, then you have to have a high credit score or produce tax returns for the past three years to qualify for the loan. If you currently rent a home or apartment and you want to build a home for yourself, you’re a prime candidate to borrow money to build a home – for yourself. So, you get the money. You build a home. You put it on the market during construction. You sell it. You go to the bank. You borrow money under the same premise. You get the money. You build a home. Put it up for sale. Sell it. Do it over and over again and pretty soon you walk into the bank and the banker looks at you and says, gosh, you should become a home builder. And you are.

Now, that’s the easiest way to get started. Most every builder I know got started in the industry this way. This method will also provide you with the least risk. Why? Because if you don’t sell the home you’ll simply move into it. In turn, this will make it easier for you to sell because a home that is furnished will normally sell faster than an unfurnished home. You’ll eventually sell it and can start the process again. The bad news is that you may be moving a lot. I remember one couple that wanted to own a home free and clear. They used this method on five homes, plowing their profit back into each home. Their sixth home was constructed completely from cash. They owned it free and clear and got out of the construction business. They simply wanted to do what it took to own their home free and clear.

The further you get away from the above scenario, the harder it is to get the initial loan when you’re just getting started.

For example, let’s say that you currently own a home and you want to borrow money to build another home for yourself. A banker will generally be negative. They tend to look at the downside and might comment something like this. “That sounds real good but you currently own a home. What are you going to do with your current home?” Your response is, “I’ll put it up for sale during the construction of this new home and then I’ll sell it.” The banker comments, “That sounds pretty good, but what if you don’t sell your current home?” The banker generally looks at the downside – that is you’re going to be stuck with two house payments. If you’re able to show you can afford two house payments, you may very well get the money.

You always have to have a successful conclusion to your story you tell the banker. Never look at the banker and say, “Well gosh; I’m only borrowing 70% of the appraised value. If the bank had to repossess the home the bank would have a bargain. The bank could sell the home, and make a good return on its investment.” Never use this kind of logic on a banker. Bankers don’t want to be in the homeowner business. Never imply or even think in your mind this will happen.

Source by Thomas R .Harrison

Would your construction company focus on demolition? Would it become an expert road building company? Will you be delving into excavation? Are house constructions and renovations your expertise? These are the things one must think about when buying heavy equipment. Without answering these questions, it would be impossible to buy correct equipment for your company.
The construction industry is not an easy place to stay. Being new to it is even harder. However, being successful is the hardest part. One of the things to be considered is the equipment for this type of industry. If you are going to invest in some heavy equipment for a construction company, it is best to know its strength and weaknesses. Its capabilities can help you decide where to focus on.

Would your construction company focus on demolition? Would it become an expert road building company? Will you be delving into excavation? Are house constructions and renovations your expertise? These are the things one must think about when buying heavy equipment. Without answering these questions, it would be impossible to buy correct equipment for your company.

A fork lift is great in heavy duty lifting but it will not find its use in a demolition type of Construction Company. A crane can do well in building construction, demolition and excavation but it would be too big and too impractical to use when building a house. A situation may come when you would be stuck on what kind of specialty you would want to delve in. You might want to be own a demolition/road building company. It might be even more appealing to you to become a company that can do all of these things.

Being a new player in the playing field of construction, one must always be focus on investment and on revenue. Buying the correct equipment is part of this. Heavy equipment is a huge investment that pays off a lot if it is used efficiently. A stagnant, unused and rusting Boom truck becomes unproductive. It means that you are not getting your money’s worth. It means that you are getting poorer. It means you chose the wrong equipment to buy.

Another way of insuring that you bought the correct heavy equipment is to buy the ones that can be universally used, the ones whose versatile nature enables them to be used in all aspects of construction. They can be used in excavating a site, building a house or demolishing a building. These types of heavy equipment are the best kind of investment when starting a construction company. In this way, you can accomplish many jobs with just a couple of machines. It is another way of finding your feet. They can help you find your bearings and even strengthen your company.

A compact track loader is an example of this adept machine. Its versatility is astounding. It can do excavation jobs, digging jobs and loading jobs with ease. It can be used during excavation, demolition and construction. The compact track loader does not need much maintenance. It only needs a good operator and a great owner that pays its fuel and oil bills. For extra income, a compact track loader can be rented out or leased for a period of time. This way the company can earn some extra cash whenever this powerful yet versatile heavy equipment becomes idle. A compact track loader is a great heavy equipment to buy when starting a construction company.

Source by Karl Real

Big construction projects and the companies associated with these are always in need of heavy machinery and equipment for its smooth operations. With the costs of these machines and equipments sky rocketing, it becomes difficult for companies to purchase all of them. However hiring or leasing these equipments is a more feasible option and more than often these companies indulge in leasing these heavy equipments.

Cranes are an integral part of a construction business. Ranging from tower cranes to mobile cranes there are many types of cranes. Depending upon the necessity, there could be more than one variety that is required for a particular project. In such a scenario it becomes difficult to purchase all the models. Hence hiring heavy cranes is a simpler solution. There are many other advantages associated with hiring heavy cranes which are listed as below:

• Easy and stable flow of cash can be maintained as there is no need to block a large part of the investment in cranes.
• There is easy up gradation of models and variety of cranes as the supplier can be asked to supply the model as per requirement.
• With fierce competition, crane hire companies also provide customized payment options to their customers. This facilitates the construction companies to work out their payment and working capital modules.
• Hiring cranes can be more beneficial than taking bank loans for their purchase. Also the crane hire companies provide more flexibility
• As the cranes are under lease, their maintenance, repair and operations are handed by the supplier company thus easing the work load of the construction companies.

With these advantages at hand, it is prudent to hire heavy cranes than buying them and blocking your money. moreover the crane hire companies take regard of quality and service as this is their business and to build reputation, they have to be in the books of the construction companies that could provide them business by recommendations.

Source by Jim Johannasen

You’re probably not going to believe the story that I’m about to tell you, but it’s what makes America great. You can come to this country, learn a trade within a short time and become a millionaire in less than five years.

I’m not going to tell you his name, because that’s not what’s important here. The fact that you can do what this man did is really what this story is all about. He wasn’t the smartest person on earth and he didn’t have a pleasant personality. He could barely speak English and he rented a room from one of his relatives.

Here’s how he became a millionaire and you can do the same thing also. He advertised in the local newspaper and the fourth person that he worked for, was a multimillionaire. He was fascinated with the multimillionaire and asked him as many questions about how to acquire wealth as he could think of.

We can stop the story right there, the point of this article, is to actually ask other people, how they become successful. If you’re working for someone who is a little more successful than you are, it wouldn’t be a bad idea to start asking them for some advice.

The story that I told you, isn’t entirely true, but I’m sure that it has happened to more than one person in America. The main point that I’m trying to drive home here, for contractors who are struggling is that you need to start asking other successful contractors about their success.

This is actually one of the methods I use on a regular basis. I have learned valuable information from homeowners that I was working for. One housewife and the mother of four children that I was working for, helped me solve a problem with the gas company.

I learned a little bit more about the power of persistence from this woman. It wasn’t the last thing that I learned from her, because I chose to ask some excellent questions. If you really want to be a successful contractor, you need to start asking questions to successful people.

What do you have to lose, if you’re not a success will as you want to be? Just do it and within a short period of time, you will start to see your attitude in life changing.

Source by Greg Vandenberge

I’m going to share a story with you today about someone working in the construction business. This contractor wasn’t any different than you and me and didn’t really have any special skills that were out of the ordinary. He had a high school education, read the newspaper every day but rarely read any books. Tom’s business skills were nothing to write home about either, but he landed a million-dollar client that changed his life forever.

He was about 25 years old when he met a real estate professional named Brian on his way up. Brian told him that he was going to make a lot of money in the real estate business and Tom could do all of the remodeling work for him. Brian needed someone he could trust and Tom was going to be that person.

Brian made a lot of money in real estate and sent a lots of business Tom’s way, but that wasn’t the kicker. Brian ended up starting another business that made him a multimillionaire with in five years. It wasn’t the money that Brian made and it wasn’t really the work that Brian sent Tom that was going to make Brian into a million dollar client.

It was the people that Brian met, once he became a multimillionaire. Brian recommended his friend Tom to plenty of other multimillionaires. The fact that Brian thought so highly of his remodeling contractor, presold most of his friends, before Tom ever arrived at their homes.

You never know what’s going to happen in the construction business, but you need to be ready for it when it does. Tom could have easily told Brian that he was too busy many years ago and his life would have been a lot different. Sometimes opportunity only knocks once and you better be paying attention, when they’re standing at your door knocking.

Source by Greg Vandenberge

Not much more than 40 years ago, engineering and construction firms had dedicated in-house departments that did all of their design and drafting work. For firms that were not large enough to enjoy in-house drafters, the work was routinely contracted out. Blueprints were created by hand using pencils and geometric drafting tools; the older generation of architects and engineers will fondly remember their T squares. For those who were not professionals in this era, it is still easy to imagine the immense amount of time, manpower, and money that went into creating drawings and blueprints, even for relatively simple works.

All of that changed with the introduction of computer aided design. CAD drawings had the distinct advantage of being able to expedite and even automate many aspects of drafting that otherwise took entire departments days to complete. A single person using the software package could create these drawings by themselves in many cases. While drafting departments slowly disappeared from the construction industry, a growing CAD library and technological advances ultimately benefited construction firms.

Thanks to the digital age, CAD drawings and even extensive works can be communicated between professionals around the world. Construction drafts became quick and flexible, enabling the industry to advance with the changing times. A feasibility study, experimental plans, or a change order could be conducted on a time scale that meets today’s business and industrial needs.

Let us take a moment to explore the uses and potential of CAD drawings and the benefit of a CAD library for the construction industry as a whole.

Computer Aided Design Features That Drive Industry

Computer aided design now contains many more features beyond mere digital drafting. Today’s software is capable of generating a three-dimensional rendering of a structure or building of any size or shape. This virtual model can be manipulated and viewed along any angle rather than having a series of drawings drafted from different perspectives. Virtual structures can be used to conduct feasibility studies and any other number of useful calculations to determine the risks of a given draft. Finally, all of the properties and dimensions on these drawings are easily modified to allow for experimentation, revision, and optimization. The full list of the features is awe-inspiring.

The library holds all of this information digitally. A worldwide file standard allows CAD drawings to be living documents that can be used as a basis for communication for sales, marketing, and the advancement of the industry as a whole. Drafts and plans are not stored away in a filing cabinet; instead, it can be freely used in future work.

Computer Aided Design’s Many Uses

Computer drafting software can be effectively used in many roles at any end of the design and manufacturing process. Virtual drafting allows for an open environment for ideas to play out without the need for creating a series of prototypes or expending any tangible resources. CAD drawings are used in modeling nearly any industrial product, building, structure, or system that could be conceivably used in the construction industry. However, computer aided design’s usability goes much further.

CAD drawings assembled into a library are an excellent tool for product lifecycle management, to name one particular application. The library houses an easily maintained record for document management and revision control. Any change in the planning phase or a work change order can be readily tracked along with the impact that change may have on the entire project. As the project moves from the design phase to prototyping and eventual construction, computer aided design drawings document all of the vital specifications in detail. All of these elements are stored within a CAD library to allow easy reissuing of old design elements.

Anatomy Of Computer Aided Design Users

Another way of understanding how computer aided design is used and how it has advanced the industry is to look at how many different people can utilize CAD drawings in their job functions. Architects use drafting tools to construct buildings, civil engineers use it to design bridges, and mechanical engineers can design industrial equipment. Engineers in all professions utilize this tool in the process of creating conceptual designs and corresponding scheduling and process control in the manufacturing step of industrial products. City planners and artists can use this virtual space to layout design elements and evaluate the aesthetic and utility of a particular layout.

Ultimately, these drawings and access to extensive resources in a comprehensive CAD library have been essential in advancing the construction industry.

Source by Greg A Palmer

In uncertain economic times, anyone planning a new construction business should make sure they get started on the right foot by developing a branding strategy to help sell themselves and their services. A professional graphic designer can be of great help here in getting you set up with a good quality business card, logo and letterhead.

Let’s take a look at your logo design, one of the key elements in branding your company. The right logo can really define you as a professional, and make you stand out from your competition, so it pays to have some ideas in your head early on. Your logo will be the first impression of your business that your customers get when looking at your business card so it should convey something about your business – both the fact that you are in construction, and the values that are important to you. The obvious choice for a graphic logo is a tool or piece of equipment related to construction. But think outside the box, and away from the dodgy clip art of the 90s. A silhouette, cutout, or even just some elements from a piece of equipment might be enough to brand you as being in construction – leaving a lot of room for your designer to convey other information about your business and your values.

Color is also an important element. Think about what feeling you are going to give by the use of different colors, and balance this with the need to catch attention – but not be garish. Sometimes a bright color can work very well if it is matched with simple design elements so that your business card is not too busy, for example. At other times, it might be better to use more quiet, calm colors – this really depends on your knowledge of what your local market is looking for and expecting. Of course it is up to you whether you decide to challenge or conform to those expectations!

Whatever design you settle on, always remember that your branding is critical in allowing you to be seen as a professional in the same league as the major corporations. There are two kinds of small businesses – those that are around to put in the minimum to make money, and those that care about the quality and professionalism of everything they do. Which way would you rather be perceived?

Source by Royce Starlin

If you’re planning on building hotels, strip malls and hundreds of homes, right off the bat, you might need a lot more capital to start a construction business. If you’re planning on starting a construction business and working your way up, by working on smaller jobs and then advancing to the larger ones, you might not need a lot of money to get your construction company off the ground.

I started my construction company with less than $500 worth of tools. All the tools that I owned had already been purchased and I was using them daily. I had a saw, drill, hammer, tape measure, wheelbarrow, ladder, trowels, shovels and a stapler. I had a few more tools, but these tools were enough to build my first 16′ x 16′ room addition with a wood shake roof.

The money that I made from my first job, allowed me to buy more tools and do more advertising. After my first job, I did other jobs like it, home repairs, bathroom remodeling, installed doors and windows, roofing, siding, decks, patios, concrete, and skylight installations.

The construction business doesn’t require a lot of capital and most of us have already bought the tools that we need. If you think about it, all you need is a contractor’s license, a place of business, a vehicle and your tools. You’ve already got the education and know how to do the work, so what are you waiting for.

I don’t know how many people I’ve met, who told me that I was lucky. I always seem to get luckier, the harder I work. It never made much sense to me, why someone wouldn’t want to start their own business and make more money, especially if they already have the knowledge, experience and know-how. Remember that starting your own construction company, doesn’t require a lot of capital, most of the time. Start small and work your way up and soon you’ll have the money to do bigger and better jobs.

Source by Greg Vandenberge

It doesn’t matter whether you’re just starting out as a contractor or trying to expand your construction company, these four steps can help you develop a more successful construction company. Usually successful companies make more money and deal with fewer problems than unsuccessful ones. Let’s get started and I hope that you can use at least one of these four steps to increase profits.

1. Raise Your Prices: I’m not kidding around here, if you want to make more money, you need to charge your clients more money and this usually means that you’re going to have to raise your prices.

2. Hire Cheap Labor: If you have someone working for $12 an hour, could that person be replaced by someone working for 8 or $10 an hour. Hiring cheaper labor has made a lot of contractors extremely wealthy.

3. Organize Your Building Materials: Spend some time working with different building material lengths and sizes. In the home framing business, different sized lumber makes all the difference in the world.

4. Shop For Bargains: Make sure that you’re getting good materials for low prices. During tough economic times, this shouldn’t be hard to do, unless you only have one building materials supplier in your area.

Running a successful construction business is going to require more than these four items I listed above. If you’re serious about increasing sales, finding new clients and living a better life, I suggest that you start reading books on sales, psychology and personal development. Success starts with you.

Source by Greg Vandenberge

Are you in the construction field? Are you a trades person, a general contractor, an architect, an engineer, a carpenter, a surveyor, an electrician, a landscaper, or even a construction equipment sales rep? Have you ever purchased construction leads from internet sales lead generation websites?

If you have ever purchased construction sales leads from such websites, I’m here to tell you that you are paying too much and you can “do-it-yourself” cheaper. Here is how these sales lead generation websites normally operate:

• A customer is searching for a trades person online to complete a project, be it a home-improvement project or a commercial project.
• He finds a website that deals with construction trades and ends up filling out a form detailing what type of project he needs completed.
• That information is worth money. The website packages that information as a construction sales lead and sells it to a trades person; sometimes the same construction lead is sold to multiple trades people. The sales lead is worth money and normally is sold for between $5 and $50. So, these sales lead generation websites could potentially make up to $150 from just a single internet searcher, if that info is old to three people, that completes their online form.

Now, this sales lead may be worth buying if it can generate new business. But, you can generate these leads on your own much cheaper. To do that you must first understand how these lead generation sites generate the visitors to their site in the first place. Most of the visitors to their sites get there via paid ads on internet search engines like Google, Yahoo, and MSN. They purchase “keywords” that show in “sponsored results” section of internet searches. For example, they may purchase the keyword “Houston general contractor,” and a link to their site is shown every time someone searches for a Houston general contractor. They pay only when someone clicks on their ad. Do you want to know how much they pay? It costs just pennies per click. The person visits their site and it costs them just a few pennies. The person completes their form and that information is re-packaged and re-sold to construction trades people for $5 to $50 each.

Now this sounds like a rip-off, doesn’t it? It’s a system that I like to call “sales lead arbitrage.” They purchase the original lead for pennies, then re-package and resell it for multiple times the original cost.

The good news is that you don’t have to purchase leads at this marked-up price. You can purchase keywords on internet search engines yourself and pay just pennies for construction leads. The most popular tool for placing search engine ads is Google’s AdWords program. The only requirement is that you must have a website to forward the search engine ad clickers to. If you don’t have a website for your construction business it would be well worth the investment to create one. These days, you can hire a website designer to create a professional looking site for under $100.

Source by Tino Toskala