Software & Hardware [top]
Like most other businesses, the construction industry as a whole continues to undergo significant transformations on the technology side. Internet and digital applications, wireless systems, even nanotechnology, are impacting the entire realm of building functions - from project planning, design and materials procurement, to coordinating operations on the work site.
All this certainly should make for easier work processes and higher-quality projects. But from the perspective of some pundits, the construction trades need to develop better ways to coordinate a veritable glut of software, devices and equipment.
At every turn, there's software
For an industry that in the end relies on hands-on skills and workers who don't mind hard labor, contractors, business owners and management personnel have access to hundreds of computer programs to make life easier. Even so, change can be slow in coming. In a recent survey conducted by Centric Software -- a global corporation dealing in enterprise software solutions -- 87 percent of respondents reported using three or more tools per project, with 26 percent using more than eight. E-mail, spreadsheets, telephone calls and contractor reports were the most common methods of information delivery and task execution - not always the best choices.
While many did use some type of software, a whopping 72 percent of participants said less than half of their programs can share data. The end results typically were a greater chance of error, lower productivity and inflated costs. Not surprisingly, 90 percent of those surveyed indicated they would be interested in a unified system.
Fortunately, there are solutions to this challenge. Dashboard technology automatically monitors and interprets data across various project components and from normally incompatible tool sets. The amassed information is then available in an integrated format. The following list describes several categories of software that specifically target the construction industry. Keep in mind, though, most experts stress that inter-program compatibility is key for optimal value.
- Pre-integrated business applications. Software firms are designing programs that do everything but make lunch, allowing even small-business owners to maintain full control of every phase of a project. Some of the more comprehensive models include tools for proposal drafting, choosing subcontractors and suppliers, managing project execution, achieving consistent forecasts, and streamlining revenue collection. Costs in this program category fluctuate a great deal, but many average around $700.
- CAD and CAL. CAL (Computer Automated Layout) programs supplement traditional CAD (Computer Automated Design) software. CAL provides the additional ability to interpret and print the wall framing layout for any structure - including placement, dimensions and measurements of framing components - onto a rolled tape, according to the blueprints, for direct transfer to the wall plates. Prices for this software vary wildly, but can start under $200 depending on the program.
- Trade/subject-specific applications. A number of software packages are tailor-made for various specialists, such as commercial builders, HVAC contractors, plumbers, electricians and masons, to name a few. While some stick to completing the job, others also include project management capabilities. Narrower programs focus on building codes, calculations, legal issues, energy design, estimates and other construction related topics. Expect to pay upwards of $200 for programs in this group.
- Internet. For business owners who like a little help, an increasing number of firms are offering step-by-step online project management. For a monthly subscription (some under $150 per quarter) and, usually, a small start-up fee, users have the benefits of integrated software without the expense, as well as a cookbook approach to processes.
Beyond the monitor
The business of building runs on more than slick software. Several established technologies have found new uses on construction sites - and one is making sure those structures last forever.
- Laser technology. Lasers have become increasingly prevalent in the field, especially for large-scale commercial contracts. Besides facilitating processes such as leveling, plumbing, squaring and aligning, it likewise has applications in pipe installation and excavation; rotary lasers are particularly suited to interior construction. For safety purposes, construction lasers are low-power, and accuracy fluctuates across models. Read the manufacturer specifications with care, and go for equipment with leveling accuracies measured in arc-seconds. Cost for this state-of-the-art tool ranges dramatically, from less than $200 into the thousands.
- Wireless technology. The PDA (personal digital assistant) has become a common sight, not simply in the office, but on the job. A handheld computer that stores and organizes data, PDAs can partner with cell phones and other wireless gadgets to provide true mobility. Some examples: Data can be synchronized between the PDA and desktop computer through wireless transmission or cable, so changes in project plans or scheduling can be sent in seconds. Supervisory professionals also may electronically access - from the field - information on government regulations and standards, audit forms, checklists and much more. PDAs come stripped or fully loaded, with prices up to $500 and more.
- Nanotechnology. Nanotechnology, the subject of a slew of sci-fi films, is the engineering of functional systems at the molecular scale. In the construction industry, the term applies mainly to the stuff that goes into buildings; hence the term nanomaterials. In addition to creating longer-lasting products, experts point out that these materials also reduce building maintenance and energy costs, as well as contribute to a cleaner environment. Products already utilizing this technology include self-cleaning glass, with a nanoparticle coating dirt won't cling to; solar-collecting fabric, a revolutionary building component that converts solar radiation into electricity; smog-eating concrete, with a finish that destroys pollutants coming into contact with the surface; and nanocomposite steel, which resists corrosion more effectively than conventional steel, thus reducing installation costs up to 50 percent, according to the research.
Sales & Marketing [top]
Today's construction companies turn to multimedia to build up business in a thriving industry. From radio and television commercials to online advertisements, professionals in the field continue to hammer away at unique marketing approaches.
At last count, the nation housed approximately 818,000 construction establishments, with 7 million wage and salary jobs and 1.9 million self-employed and unpaid family workers, according to the U.S. Department of Labor. As competition grows, construction businesses across the country look to beef up their sales strategies.
Bid search engines offer construction outfits one avenue to help stir up more profit. Web sites, such as National Contractors.com and BidClerk.com, let building professionals enter an area code or state and view upcoming projects planned for that region. Obtaining this information earlier allows the construction company to personally contact the developer before any shovels ever break ground. In fact, some development-focused Web sites even provide online bidding forums, allowing the visitor to vie for the job with a click of a mouse button.
Other building-focused Web sites bring the work directly to the construction firm via e-mail leads. The contractor simply registers with the site, providing a company profile. As developers submit request for proposals (RFP) to the same site, it sends the project info to the vendor(s) most appropriate for the job.
Such referral services essentially play the role of the middle man, allowing construction companies to pick and choose their work. At the same time, this virtual networking makes it easy for developers to reach dozens, if not hundreds, of qualified builders in a matter of seconds. A number of these sites also include the latest news circulating around the industry.
Cyber Selling
With many key players in the development arena logging onto the Internet to recruit building specialists, online advertising helps construction firms stand apart from their competition. Many industry-focused sites offer design and placement of banner ads starting at about $1,200 per month. Ranging in size and content, these ads usually link directly to the construction firm's Web site or e-mail address, if available. Other online marketing options include video streaming ads. These usually consist of a 30-second video that showcases the construction firm's services, latest projects and accomplishments.
The E-Mail blast represents an ideal tool for contractors looking to reach many target clients in a single swoop. Online magazines geared toward development sometimes offer this service. For usually less than 50 cents per e-mail address, the site company will send to its subscribers a digital advertisement that highlights the client's construction profile.
Raising the Roof on Sales
Aside from utilizing the World-Wide Web to spread the word about services, many contractors also rely on construction marketing firms. These public relations insiders provide a wide range of services such as new market assessments, customer satisfaction studies, strategic planning, marketing training and seminars, pricing studies, telephone/mail surveys, personalized press releases, brand awareness campaigns, presentation development and more.
Nonetheless, not all firms have the funds to outsource marketing. With nearly two out of three construction establishments in the U.S. employing less than five people, small businesses truly make up the lion's share of the industry. For this reason, software companies sell packages designed to help scaled-down firms. Construction marketing software lets contractors establish an elaborate campaign in-house. Some of the more sophisticated programs include features like newsletter formats, project literature templates, marketing handouts, open-house materials, client letters, thank you letters, customer postcards and updates, etc. This software tends to include project brochure features that detail company history, awards, projects, personnel background, and client testimonials all in a professionally designed packet. These programs usually start at less than $150.00.
In Clear View
In the construction industry, the site truly plays the role of the showroom - the crew's services and job performance on display for all to see. This, however, only lasts as long as the project time. Then, it's onto the next workspace, so to speak. With construction firms rarely associated with an anchored office setting, marketing insiders stress the importance for companies to brand their operation wherever they find themselves. Vehicular signage allows professionals in the industry to advertise on the go. Magnetic decals represent one of the most popular forms. These removable signs can be placed on any metal surface and are shaped to fit the body of the truck(s) or car(s). For heavy machinery vehicles that experience a lot of wear and tear, adhesive vinyl signs offer permanent placement. Most sign companies provide graphic support to help the client design a catchy logo. Still, the less cluttered the message, the more effective -- according to marketing insiders with The Outdoor Advertising Association of America Incorporated (OAAA).
Customer Service [top]
Crackerjack technology, brilliant marketing strategies and skilled, reliable staff work together to build an organization - but that's only part of the process. An operation is only as solid as its customer base.
Most experts emphasize that good communications, in-depth knowledge of client needs and quick response to their concerns are paramount in maintaining healthy consumer relations. As in the case of most businesses today, in the construction industry, the best customer service strategy employs a mix of cyber-tools and personal attention.
There's a program for that!
Customer service starts the moment a potential client knocks on the door and ends long after product delivery. Components include information management, response to service requests, problem solving and quick resolution of problems and complaints.
A successful consumer relation strategy involves a genius for multi-tasking. As such, a number of industry professionals rely on software to get them started. Customer relationship management (CRM) programs, typically designed as integrated solutions, help monitor any transaction that directly involves a client, through and beyond project completion.
Here is a rundown of various software products available in today's market. These range from very simple to highly complex, and pricing follows suit.
- Online support. Customers can access Web help centers 24 hours a day, seven days a week, thus reducing the costs of operating a company call center.
- Communication centers. These applications bundle a full menu of capabilities, including e-mail, voice mail and the Web, allowing customers complete access to the service provider.
- Customer data base. When issues arise, service agents can refer to comprehensive client information files, including transaction history, payments, marketing efforts, special communications and more. Often, these programs synchronize customer data with other information sources, providing a continuous update on client particulars.
- Service contracts. This software can generate contracts customized to a particular project, reducing costs by applying precise informational parameters to specific customers, sites and warranties.
- Administrative operations. By automating routine office tasks such as invoices, reports, scheduling and notifications, these programs enable construction company owners, especially in smaller firms, to wrap up projects in a timely manner - a major factor in customer satisfaction. Other functions include the printing of mailing labels, envelopes and forms for specific client or prospect lists, and maintenance of appointment and contact logs.
Customer care on a personal level
These days, technology clearly is making the mechanics of customer relationship management a lot easier. But communication centers and data bases can't deliver the same punch as high-quality products and personalized attention to the fine points. Research has shown that a few tried-and-true tactics (really a matter of common sense) make current customers happy - and brings new ones coming in.
- Deliver a finished product. Nothing pleases customers more than coming out of a final walkthrough with no problems to complain about; so be meticulous about the finishing touches. One award winning construction firm does this by conducting a 600-point inspection a week before closing. All items, without exception, must be fixed prior to final inspection. As a result, their customer satisfaction ratings average around 90 percent.
- Finish projects on schedule. Putting off a closing can wreak havoc for customers. To avoid this unpleasantness, it's a good idea to give clients a range of expected closing dates, with the final date set six weeks before project completion.
- Stand behind the product. Housing market research suggests customers make the most referrals during the warranty period. To optimize this opportunity, maintain and improve consumer confidence by promptly addressing concerns and complaints. They'll likely share their satisfaction - or displeasure - with potential referrals.
- Pay attention to details. Review customer records and transactions before a face-to-face or telephone conference. This is an ideal time to refer to data (e.g. figures, dates, financials) compiled through CRM software. Having in-depth personal knowledge at your fingertips speaks volumes about professionalism in other areas.
- Ask "buyer-focused" questions. Customer-satisfaction surveys are standard tools in the industry. Even so, experts point out that many address only what the builder wants to know. Besides questions regarding operations (e.g. deadlines, warranties, quality control), some firms now address more subjective perceptions - for instance, whether buyers feel the company has treated them fairly, or if the firm has met the consumer's goals.
- Reward employees who strive to satisfy. A sizable number of construction firms are considering client satisfaction when it comes time to hand out employee bonuses. One New Jersey outfit, for instance, bases monetary rewards on a performance rating sheet, with customer satisfaction survey results comprising 30 percent of the total point count. An Illinois company offers profit sharing, adjusted according to customer satisfaction ratings.
Staffing & Employment [top]
What type of construction business do you have or want? – Painting? Asphalt, Cement & Masonry? Basement Refinishing? Roofing? Window & Insulation Repair & Installation? General Repair? New Construction only? The list could go on and on. Except for the skilled trades where a government agency or entity requires licensing (i.e., electrical, plumbing, HVAC, etc.) most people who start a construction small business are “generalists” who can and will do almost anything for a customer. Most, though, like to specialize and when the economy is good the construction small business can pick and choose their jobs. But, when the economy tanks, most small construction business owners will do just about anything to keep their book of business as robust as possible. The point in listing a number of the business possibilities/ markets is that each one will have its own personality, which will begin to define the numbers of and types of people resources you will need to make a go of a construction oriented small business. As an aside, carefully investigate local licensing requirements, as in addition to a general business license, most construction or contracting businesses need specific licenses to operate legally. Also, a surety bond is not something many business owners think about, but in almost all cases, construction businesses need construction bonds in order to operate legally. Finally, depending on the nature of your work and whether you employ workers directly, you will need several types of business insurance. Consider getting general liability insurance as well as vehicle and property insurance. This will protect you against claims for personal injury and property damage, and cover the costs of legal proceedings. Most States also require businesses to carry specific insurance, such as workers' compensation, unemployment and state disability insurance. And, you will probably want your construction business to be a Limited Liability Corporation to protect your personal assets.
In all likelihood, if you have chosen a construction specialty/niche for your small business, you are the trade/subject matter expert in the technology and techniques required for your new small business. So, as you add staff to your LLC, you will be the teacher and quality control/subject matter expert. When you get those larger jobs or ones that have tight completion deadlines, it is highly likely that you will need people working for you, at least on a temporary basis. The things to look for in filling these human asset needs are: ability to learn quickly, reliability/dependability (on-time and not absent), ability to do the manual work as well as possibly some of the skilled work that needs to get done.
If you are NOT the subject matter expert, and are instead the financier, accountant, marketer, grant writer, etc., then you will have to recruit or develop someone with the technical expertise your chosen business requires. For instance, if you want to become the “top dog” in converting basements into rental apartments, your creative and marketing contributions may be the key to success of your small business and not the hands-on work of doing the renovation or construction. In other words, you are the “idea” person and that’s what you most enjoy doing. There are many local trade schools that specialize in construction related skills and knowledge endeavors which will probably have students or graduates with the talent, knowledge and skill your business will need. A quick internet search on “trade schools near ‘____’ (fill-in the geography or zip code)” will give you a great starter list and each institution’s website will regal you with the latest cutting edge training being provided to students in unique, new areas. If you are acquiring someone else’s small business because they are retiring or getting out, it is very common to include as part of the sale/purchase negotiations for the business, an assurance of technical knowledge and help for a defined time period thus allowing you to continue to operate the business while you find the new technical expert you will need.
Will you need help in your home office answering the phone, designing proposals, doing billing, estimates? If so, consider hiring someone you know who may need a little extra work on the side of the job they already have, or perhaps it is your spouse who would like to be of assistance (they tend to work a little cheaper). Also, a consideration is to call a local high school or college in order to hire someone into more of a co-op position that for which they may gain some college credit.
If the economy is booming, your only ready source of highly skilled help might be enlisting someone to give you a hand as a second job. If the economy is tight, there are usually good skilled trades people willing to work on a job specific basis. The key point is to make sure you are well connected to the sources of finding good skilled trades people. It is much easier to find general laborers to help, especially if you are the on-site skilled person doing the work which requires expertise.
To meet your employment needs, particularly in today’s environment, it is probably best to minimize the number of full-time “employees” on your payroll. Not only do you have a number of tax obligations (social security, Medicare, unemployment, etc.), but legislation requiring paid benefits continues to place the burden of things like medical insurance, paid days off for sick leave, paid holidays, etc., squarely on the backs even small business employers. Part-time and seasonal workers are a smart way to go.
How do you find the talent you need? This introduction has given you several suggestions. If you need more ideas, please refer to the Human Resource information found for suggestions. This information provides ideas on where and how to recruit the talent you need.
With today’s social media, using your private list of key contacts by simply letting them know you have a specific need for an employee or part-time/project specific person will probably satisfy your talent needs faster than you can imagine. If you use your search engine to query “employment agencies near {zip code}” not only will you get names of a variety of hiring agencies (aka “headhunters”) who can relatively quickly provide you with suitable candidates (either “permanent” or temporary) at a reasonable cost, but you will also see a number of boards on which you may post your “opening” at virtually no cost. If you use this tool, be prepared for an avalanche of candidates—the point being, be selective.
Billing & Accounts Receivable [top]
The U.S. Department of Commerce reported in a recent news release that construction spending nationwide topped $1,180.2 billion in January. But despite this astronomical figure, those in the business of building don’t always pocket the money due them as speedily as they’d like. Too often, the accounts receivable column bleeds red, long after a contractor has billed the customer.
The good news is – employing certain tactics can go a long way toward stabilizing cash flow, ensuring that business owners have money on hand when they need it. Experts suggest the solution rests in organized accounting practices, efficient invoicing and attention to last-minute details.
Taking Matters into Account
Simply put, good record-keeping serves as the foundation for a robust accounts receivable column. The process begins with getting a clear read on overall revenue patterns – for both income and expenses. Unfortunately, harried business owners – especially those with small or medium-size construction firms – sometimes place accounting chores last on their to-do lists. This habit can contribute to stunted or erratic cash flow.
To avoid shortfalls at critical operational points, industry analysts offer these basic guidelines:
- Take control of fiscal issues. Construction business owners should feel confident they are generating reliable financial data, safeguarding assets and complying with regulations. And while no employer likes the thought of dishonest staff, accounting systems should be tamper-proof to prevent deliberate or inadvertent misappropriation of funds. Business management software packages and Internet subscription-type programs usually provide safeguards against prying eyes.
- Assure that records track every step of business functions in separate, detailed categories. These include, among others, contract information; billing history; revenue receipts; and operating expenses.
- Abide by a single accounting system. The most straightforward are cash and accrual. In the accrual method, receivables are tallied when the contract is signed or services occur, no matter when the contractor actually receives payment.
The cash method, on the other hand, counts revenue only when money changes hands.
Percentage-of-completion and completed contract methods also are common in the building industry, and as their names suggest, involve receipt and posting of payments based on a project’s progress. Of course, each of these systems yield different outcomes at tax time.
Smart Billing Means Faster Collections
Research shows slow, erratic and incomplete payment for finished jobs is one of the most common – and distressing – issues plaguing today’s construction companies. In the case of the small-business owner, a couple late checks may be all it takes to shut down operations. For this reason, an increasing number of industry analysts are stressing that pre-emptive measures are critical to a thriving accounts receivable columns. Procedures such as those listed here are simple, comprehensive and easy to put into place.
- Utilize a solid automated billing system. Software should have the ability to: consolidate all customer fees and transactions into one invoice; integrate with existing programs and files; provide billing formats that can be customized according to client; and allow the business owner to review and revise invoices before delivery.
- Request a deposit. Asking for a share of the money up front has become a standard practice in the construction industry, and with good reason. Besides covering start-up costs, the revenue can go directly into other company expenses, which contributes to a steady cash flow.
- Try the “pay-as-you-go” approach. Setting down a series of deadlines and payments over the course of the job, in the original contract, allows the business owner to stop work (thus extending the terms) when a client fails to meet his obligations. The consensus among industry insiders is that by a project’s completion, a very small balance of monies owed should be outstanding. Some contracts leave as little as 5 percent of the total cost.
- Allow for changes. An initial written agreement always should include a policy statement regarding subsequent modifications in design, labor force, cost and materials. By the same token, when a client requests a variance from the original contract , the savvy business owner will put these terms in writing, too (the law, in some states). Include all new costs on the statement, and then bill immediately.
Collecting Every Cent
Proverbial wisdom dictates that collection of the final payment on a finished construction project begins when a potential client walks through the company’s door. A business owner’s open, cooperative attitude, meticulous verbal and written communications, and consistent, understandable billing processes can assure happy customers who are more likely to settle their accounts.
That said, the last 5, 7 or 10 percent of a debt can go unpaid, regardless of a contractor’s degree of professionalism. While industry insiders concur that this remains a thorny issue, some suggest that a formal project wrap-up, in the form of a punch list, offers a decent chance of getting every last penny into accounts receivable. Builders use punch lists when projects are in move-in condition (or a garage, pool, shed, etc. is completed), with floors covered, walls painted and appliances installed. The process involves checking off every item that meets customer specifications, as outlined in the original contract and in subsequent documents. The idea is to address and resolve issues – such as missing hardware and uneven carpeting – that if left unattended, may prompt disgruntled customers to withhold final payment.
Once the client signs and dates the list, the contractor or his crew should return within the next few days to make necessary repairs. While the procedure does not guarantee that final check, it does increase the likelihood.
Vendor Relations & Purchasing [top]
The rumble of a bulldozer motoring over mud and rock plays bass to the shrill of rotary saws. A framer pounds out the backbeat with a hammer, seemingly keeping time in this symphony of metallic melodies. At first glance, it appears to be just another day at the construction site. For those in the business of building, however, much work must take place back stage to coordinate such a performance. Most importantly, contractors and subcontractors need reliable vendors. If for only this reason, construction professionals should fully know their suppliers and work to establish strong vendor relationships.
Time is Money When Waiting for Vendors to Deliver
Usually faced with tight deadlines for completion, crews generally do not like any surprises when it comes to material delivery. With weather and other uncontrollable factors a constant risk, contractors receive little wiggle room in terms of scheduling. According to a report from the Construction Contractor’s Digest, an online industry resource, contractors lose upwards of 30% time during a project. Even more startling, ¾ of this lost time is the direct result of material logistics.
When selecting a vendor, professionals in the industry should hold a good turnaround record as high – or sometimes higher – than cheap prices. Low-cost materials don’t make a difference if they’re collecting dust at the vendor’s storage facility rather than being put to use at the project site. Contractors need to remember that much of their reputation hinges on their ability to complete work in a timely manner. While larger vending operations might charge a bit more, their numerous warehouse locations make it more likely products will arrive faster – a value in itself. In addition, consumer loyalty goes a long way in a vendor’s eyes.
When a contractor repeatedly places big orders with the same materials operation, that supplier is more likely to be flexible with scheduling, and willing to bargain. More importantly, with national and foreign demand for materials ever growing, it’s never bad to get on a distributor’s priority list.
Vendors Set Up Shop Along the Internet Highway
The minute contractors win a bid, they must start planning. To help expedite the process, many material vendors now offer online catalogues through their Web sites. In most instances, these virtual warehouses allow the construction professional to browse through page after page of supplies. Visitors can pick and choose what they want to add to their shopping cart with a simple click of the mouse key. Some sites keep credit card information and the transaction history of repeat customers, letting the contractor make purchases on the fly without the hassle of order forms.
In addition, these online stores tend to let contractors edit their orders up to a certain time. Just like bricks and mortar hardware outlets, these sites hold frequent sales, and specials based on bulk purchases. Essentially, they serve as the perfect solution for construction firms and contractors lacking the time, or just not wanting to go through a sales representative.
Not Wasting Inventory Equals Purchasing Clout
No doubt, the construction business is one of measurements and numbers. Poor math could lead to big financial problems – particularly when figuring out how much supplies is needed for a job. Since each project requires different types and amounts of materials, contractors must constantly estimate what it will take to build a structure. As is so often the case, many construction businesses end up with leftovers at a project’s end. To chisel away at some of the fiscal waste, certain software companies now offer programs that calculate order volume based on individual projects. Manufacturers commonly sell materials like lumber and steel in standard lengths, with pricing based on size. This software helps contractors to mathematically determine how to get the most for their buck, allowing them to bid more competitively.
Some vendors have incorporated similar concepts on their Web sites to bolster consumer relations. When dealing with aggregates like concrete and asphalt, no formula is set in stone. But to make the purchasing process a bit easier, certain distributors now provide material calculators. Basically, the contractor enters in the width and length of the floor plan, coupled with the thickness of the foundation mold. The calculator then crunches the dimensions and returns with an order size. These free tools definitely help, especially first time contractors and folks new to the construction field.
Construction Insurance [top]
Construction firms often must brace for unexpected hitches when it comes to completing a project. A job's expedition can change with a few drops of rain or a stubborn piece of equipment.
Similarly, owners in the business face a truckload of insurance risks that can determine the fate of their entire operation. Historically, coverage focused on the obvious setbacks - an injured crew worker and property damage. But in today's lawsuit-happy marketplace, firms need more protection to ensure longevity.
Insurance companies offer a broad selection of plans designed to safeguard construction operations of all sizes.
Builders Risk Insurance
This type of policy, sometimes referred to as Course of Construction Insurance, covers against damage to a specific development and related building materials (Often defined as those pieces slated to become a permanent part of the structure). Builders Risk usually goes into effect from the start of work and continues right up to the project's completion. Coverage limits vary based on the overall cost of the project. Generally, these policies pay for damages up to the completed value of the structure. This excludes land worth. While some might confuse builders risk with property insurance, the two actually are quite different on paper. As where property insurance policies tend to only cover the owner and mortgage lender, builders risk is a shared plan. Specifically, it protects all involved in the development - the owner, architect, contractor, subcontractors and lenders. On average, builders risk covers against fire, vandalism, vehicles, aircraft, explosion, wind, theft, lightening, and hail. Still, a general Builders Risk policy does not cover damage to equipment or tools.
Property Insurance
According to insurance experts, this coverage has changed quite a bit during the past few decades as we've entered into the computer age. Database information, digital designs and much more can be hacked into with a few clicks of a mouse button. For this reason, insurance providers offer plans that place a value on intangibles like research, development information, etc. Premium terms and conditions most always vary depending on the property type and worth.
Contractors Equipment Floater Insurance
This insurance type covers mobile equipment that moves from one job site to the next on a regular basis. Equipment Floaters usually protect against fire, theft, vandalism, lightning, explosion, windstorm, earthquake, collapse of bridges, flood and collision.
Contractor Equipment Insurance
Many of the tools used in the construction industry come with a fairly steep price tag. It's not uncommon for a piece of machinery to cost upwards of several thousand dollars. Contractor Equipment Insurance covers damages against higher-end property. Items tend to include loaders, graders, bulldozers, cranes, forklifts, power shovels, backhoes, compressors and more. Under certain polices, the covered equipment can be owned, rented, leased or borrowed.
Workers Compensation Coverage
Workers compensation coverage is a must - literally and figuratively. In an industry where operating heavy machinery is all in a day's work, construction firms need to select a solid policy. More importantly, owners and managers should know exactly what such a policy provides. Some insurance firms offer extended benefits through there workers comp plans. Sometimes these include loss control services, risk management services, surety bonding, monitored claim handling, client education on how to avoid workers comp fraud and more.
Contractors Professional Liability Insurance
This coverage, also known as design-build errors and omissions, safeguards against expenses often accrued when defending design-related litigation. Many industry insiders urge general contractors to obtain some form of this coverage. After all, they usually are the "key players" plaintiffs want to pursue in structural design lawsuits. In other words, lawyers know general contractors likely can afford a heftier settlement than a single sub-contractor! Claims range anywhere from: The contractor partook in improper screening and hiring processes when selecting subcontractors - therefore resulting in flawed craftsmanship, to unapproved changes to the overall design at some point during the project. Clearly, these are issues the architect or structure designer could not control, resulting in the claim ending up at the general contractor's doorstep. Contractors Professional Liability Insurance tends to come in two forms: permanent policy and project-specific policy.
Contractors Pollution Liability Insurance
It's not uncommon for crews to rupture a sewer main or gas line while digging on a job site. Other than slowing down work and usually the flow of traffic, such an incident also can have costly environmental repercussions. Imagine paying the price for contaminated soil disposal or remedying an oil spill from an older piece of machinery.
Pollution claims are fairly common and can be extremely pricey to resolve and defend. Contractors Pollution Liability coverage provides insurance against just that: the financial loss and liability related to pollution from a covered project. These plans usually include coverage for third-party claims over related bodily harm and property damage. Moreover, they often cover all property damage and cleanup costs related to the environmental damage. Such policies tend to come in two forms: One or multi-year project terms.
Keyman Insurance
Smaller construction firms operating on the experience of a key person should definitely explore this insurance option. Keyman coverage compensates a business for financial losses stemming from the death or extended absence (injury/illness related) of a vital role player. It's important to note that Keyman Insurance does not pay for the actual losses related to a person's incapacity, but instead provides the business with a fixed monetary sum. The policy holder usually selects the amount of money to be paid to the business. This coverage is designed to allow employees, and the business as a whole, to continue to function for a period of time while addressing the absence.
Since there appears to be some similarities in the many construction insurance packages offered, it's always wise to seek out a knowledgeable agent before making any final decisions. Having too much or too little coverage can be a costly mistake.
Construction Communication [top]
Better Communications for the Project
Construction workers need to be ready to move from one job site to the next in a moment's notice. The old adage, "Go where the work is" holds true in this particular industry. In fact, a single firm might have several crews working at multiple locations. For this reason, keeping everyone on the same page sometimes presents a real predicament for managers and foremen. An increasing number of today's firms have stashed away their walkie talkies and other clunky communication devices, opting for more-advanced high-tech products. The result is a smoother operation and better productivity.
GPS Grade Control System
Improved communication starts with reducing confusion. In the past, if a machine operator needed a question answered or project specs; they might phone the main office or radio someone else on site. Today, however, global positioning system (GPS) technology allows workers to access vital data in mere seconds. Equipped with a small screen, GPS Grade Control Systems let those conducting earthmoving and fine grading view the design in the cab of the machine as they work. More advanced versions of these devices show in 3-D, comparing the blade position to a three-dimensional digital site plan. The device then signals the worker to raise or lower the blade based on the design requirements. Certain versions of GPS Grade Control Systems even let workers create flat, single and dual sloping planar designs (roads, highways, driveways) right at the job-site. More technical designs can be uploaded to the device after creation with a flash card.
By literally drawing out the plan for the machine operator, these systems decrease - if not eliminate altogether - time spent phoning the main office for related project information.
Fleet Tracking Systems
In the construction industry, a business is only as capable as its machinery. Using wireless communication devices to pin point the location and operation status of each machine can help increase productivity and diminish excess costs.
Fleet Tracking Systems, which pair the technology of global positioning systems with wireless communications, let construction firms keep a close eye on machinery and coordinate crews. Specifically, owners can use this service - in part with smart phones, laptops or any other portable devices with Internet access - to view the exact location of a vehicle, determine if the vehicle's ignition is currently running, locate travel direction, road speed and more. Some advanced fleet tracking software also sends automatic alerts and updates via email or mobile phone. This includes engine hour reports, special conditions alerts (temperature, oil pressure, etc.), stop and idle time reports, boundary alerts (if vehicle goes beyond allowed limits) and more.
In turn, more and more construction companies are using fleet tracking technology to help improve equipment utilization, combat theft, cut back on fuel usage, better predict maintenance and set up more practical field logistics.
Push To Talk (PTT) Cell Phones
In the past, construction workers often talked to each other over the interference and static of a two-way radio. With a pager hoisted to his front pant's pocket, yesterday's crew member had very little options in terms of job-site communication. However, today's major wireless providers cater to the industry with a number of construction-specific innovations. Cell phones equipped with the Push-To-Talk feature allow the user to talk to multiple workers (must also have PTT-enabled mobile) with a mere press of a button. Modeled after the walkie-talkie, the PTT phone is ideal for instant real-time communication and offers much improved reception compared to its less reliable predecessors.
With the steady rise of mobile phone usage at construction sites, wireless providers have embarked on a marketing campaign focused specifically on the development industry. First, they've created more durable phones able to withstand the wear and tear of inclement weather and heavy industrial work. To accompany these heavy-duty models, wireless providers offer a range of services for real-time data sharing. Certain cell plans allow the user to access the firm's information networks, work orders, as well as view and edit management calendars. Other capabilities include the ability to check inventory and send photos of site work for instant approvals.
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