This is the time to get into a construction trade. Whether you are seeking to become a licensed general contractor, start a construction management firm, or develop a specialized trade in carpentry, plumbing or electrical, there is work for you. Even better, thanks to freely available tools and a wide array of third party services (of which Google My Business is not the least) all it takes is a few lists in online directories, a Facebook blast, some positive reviews that build on word of mouth and you can go from zero construction leads to hundreds of thousands of dollars in jobs in a year or two.
This is especially true when you specialize in remodeling and renovation. House values are going up, making it hard to buy new property. On the other hand, property owners are seeking to renovate, upgrade and overall improve their stock.
Construction Industry Forecasts
In our forecast for 2016, we note that the blog at Constructionomics and others forecast that demand in the construction sector grew at the end of 2015 and is only projected to continue to climb.
Employment development departments (EDD) for cities across the country project strong growth in jobs for construction trade workers, stronger than other business like computer jobs.
Check out this data point from the Bureau of Labor Statistics:
[tweetthis]Construction is projected to add 790,400 jobs by 2024, according to the BLS.[/tweetthis]
Are you noticing these trends in your part of the country?
- Not enough workers.
- Contractors are booked up for months, sometimes a whole year!
- Customers can’t get companies to call them back.
Important Trends for Contractors to Follow
Now, as a general contractor, you have to know a lot about many aspects of construction, from business to regulations to knowledge of how various trades operate.
The list of things you need to be aware of as a general contractor is a bit lengthy and often includes the following (at a minimum):
- changes to building codes
- workforce and wage trends
- state contracts and procurement
- ongoing compliance requirements for licensing
- workers’ compensation
- environmental regulations
- safety and health regulations
However, for specialty trades in construction, your expertise is very specific. Because subcontractors re in demand you could cash in on the current renovation boom by getting licensed in a specialty trade.
Every aspect of a home requires a specialist from fencing and landscaping to drainage to siding, heating, plumbing and more. In fact, if you specialize in one area, say plumbing, it can pay for you to go back and develop an expertise in a second sub specialty, like HVAC (heating, ventilation and air conditioning). Especially if it’s getting harder to hire others to work on your team, you may want to consider doing the task yourself.
Easy Way to Keep Up with Building Trends
So, how do general contractors stay in the know with what’s going on in the building industry?
Joining local or national associations is one way. Organizations like the following:
- Associated General Contractors of America
- Associated Builders and Contractors Inc
- State general contractors or builders associations
All are a great way to stay apace with state and national regulations and trends, as well as build your professional network. You can learn about market trends and certifications such as green building design that will help to grow your customer base.
Also be sure to check out our roundup of the top business blogs and sites for general contractors so you don’t miss out on the news that will affect your bottom line.
Biggest Trend: Subcontractors are in Big Demand
For workers, the pay is not bad, averaging $27 hour in some parts of the country (with higher hourly for electrical trades) (and this is something that will affect your bottom line as a general contractor hiring a team to do client jobs0.
A plumbing contractor in Seattle was recently interviewed in an article about how hard it is to find subcontractors for jobs. According to him:
““It’s getting hard to find good people because demand is so strong.”
Becoming a Licensed Contractor
What about getting your contractors license? We’ve detailed the benefits for general contractors and other construction trades of becoming licensed, from establishing trust with an increasingly savvy public to being in compliance with the law. As you might notice from checking our the requirements for becoming a licensed contractor in each state, this varies.
The basics involve completing the required application and possibly exam, paying appropriate fees, and getting bonded, which requires credit and insurance. (See our tips for raising the business capital you need to launch your construction, remodeling or other service-based company.) In terms of the learning curve, some specialties have formal trade school education and certificate programs (links), but others require you to learn as an apprentice on the job.
Besides good pay and steady demand, the fact that you are working outside an office and tend to have a bit more flexibility in your schedule than a straight 9 to 5 type of gig can be a good thing.
Use This Tactic to Build Steady Cash Flow
However, if a flexible schedule is not what you are looking for, a great way to build a steady income for your business is to enter into a property maintenance contract. As a general contractor, a plumber, or an electrician, for example, you can approach residential complexes, shopping malls, office buildings and more and provide repair, maintenance and servicing of all of a clients properties in a particular geographic area.
Need to build a team? You can instantly build a large staff of subs and personnel to maintain the contract. Just post an ad. See as an example, this ad for general contractors below from Craigslist. You could modify it to recruit subcontractors:
We are looking for licensed, insured and bonded General Contractors to service, maintain, and repair several properties throughout Hood River, Wasco, and Gilliam counties. All vendors are responsible to provide their own materials and tools, as they will be working as subcontractors. The volumes of work are very high. Please call or fill out the Vendor Application.
You can create a form on your website and take applications without having to talk and follow up only with those that look promising.
Don’t wait too long, though! As we said, building trades are in demand.
This is a great way to switch into more of a management role (a plus if you are seeking to get out of the day to day trade work and have more time to attend to other parts of your life, like family).
How Cashing in on the Trend is Different for General Contractors
Of course what’s good for construction workers, like higher hourly pay, more opportunity, and the ability to negotiate better working conditions and terms given the shortage of qualified people is different for managers and business owners.
Bottom line is, for general contractors, cashing in on the trend means being savvy about building steady income (from monthly retainers to service commercial or residential property) to gaining additional certifications, taking on apprentices, and being creative about attracting quality subs and staff who will do good work that keeps your customers coming back over and over again.
If you are seeking to become licensed, be aware of industry trends and plan accordingly!
[tweetthis]Following critical trends is a big part of building a successful general contractor business.[/tweetthis]
Let us know in the comments below how you are cashing in on the uptick in demand for construction jobs (especially for remodeling contracts) in 2016!