In the construction industry, safeguarding your livelihood requires careful planning and strategic decision-making. This article highlights some key considerations that may apply regarding the operations of your business, as well as the management of building contracts.
Selecting the right clients can be a critical step in protecting your business. It’s essential to be discerning and focus on identifying your strengths, as well as the market segments that align with them. Accepting projects outside of your expertise can lead to complications and increase the potential for financial strain.
If you suspect that a potential client may present challenges when working with them, it may be wise to reconsider the engagement. Difficult clients can result in prolonged issues, such as delayed progress payments and frequently changing the scope of works. For larger projects, if you have concerns about a client’s financial capacity, do not hesitate to request confirmation from their bank or proof of funds. This proactive approach can help ensure that the project proceeds smoothly.
Having a well-drafted contract can be crucial for protecting your interests. While fostering a positive relationship with your client is important, the contract will ultimately serve as the guiding document in any disputes. Consider seeking out contracts created by organisations with builders’ interests in mind, as they are more likely to safeguard your rights.
A comprehensive quoting template may assist in alleviating potential disputes over costs down the line by helping to identify all project components and minimise misunderstandings.
The subcontractors you work with, and materials used can impact the success of your projects.
It is important to ensure that your clients understand your commitment to using high-quality materials. Using subpar materials may lead to structural failures, increased maintenance costs, and ultimately, client dissatisfaction. By committing to high-quality materials, you can not only enhance the integrity of the project but also build a reputation for reliability and excellence.
When selecting subcontractors, it is essential to build relationships with reliable tradespeople. Consider developing a pre-qualification process to assess their workmanship and reliability. Maintaining a list of trusted subcontractors can help you avoid issues later down the track. Additionally, confirm that your subcontractors have their own insurance, and keep a copy on record, as this precaution may protect you in the event of claims arising from their work.
As business owner, having insurance can be vital to help with unexpected events that may cause financial and physical loss.
Choosing the right insurance for you can be difficult, and time consuming, so it can be crucial to partner with an experienced insurance broker who understands construction risks. Some important insurances to consider are:
Be mindful that your home and contents insurance broker may not be the best fit for construction-related coverage.
Once you have prepared thoroughly, it is time to focus on the build. For projects above a certain value, having a written contract is a legal requirement. It may be recommended to have a written contract for all work to ensure clarity.
When finalising the contract, some of the important considerations include:
Waterproofing is a critical aspect of construction. Paying close attention to this detail can save you time and money in the long run.
Maintaining a clean, secure, and organised site is also essential. A tidy, and well secured site can prevent accidents and theft. It is important to consider implementing a routine for site maintenance and security measures, such as locked storage containers and alarm systems.
Familiarise yourself with and comply with all Occupational Health and Safety (OH&S) regulations. OH&S regulations are designed to protect the health and safety of employees, contractors, and visitors by establishing guidelines and standards that must be adhered to in the workplace.
Conduct regular quality inspections to ensure that subcontractors meet your standards. Address any unsatisfactory work promptly to avoid complications later.
Document and obtain client approval for any variations during the build. This practice helps prevent disputes at project completion. Be proactive about financial accountability; if a client delays or refuses to pay, address the issue quickly.
Once the build is complete, ensure that the handover occurs after the Occupation Certificate or Certificate of Final Inspection has been issued. Check your construction insurance to understand when “Contract Completion” occurs, as there may be a gap in coverage during the handover period.
Positive feedback from clients is invaluable for building your brand and attracting new customers. Consider seeking feedback through a short survey to identify areas for improvement in your service delivery.
Providing clients with a maintenance checklist at handover can be beneficial. This checklist can inform homeowners about regular maintenance tasks, helping to minimise defects in the future. Simple instructions can go a long way in ensuring the longevity of their investment.
Consider offering a scheduled maintenance inspection after a set period, such as two years. This practice can help identify small issues before they escalate and strengthen your relationship with the client.
Lastly, consider retaining a portion of the profit from each project as Retained Capital. This practice can support your working capital, expansion plans, and equipment acquisition. Retaining capital can also help meet the requirements of your Domestic Building Insurer, ensuring you have the necessary assets to support warranty limits.
By thoughtfully considering these aspects of your business, you can better protect your livelihood as a builder and foster a successful and sustainable operation.
