Formation of construction firms has always been easy but ensuring their survival has always been the difficult part. Many construction firms have been formed over time, gone over the rigid process of certification from the government, obtaining health and safety permits but collapse within five years due to lack of a sustainable market among other factors.
The research is conducted to determine all the factors and questions to be raised before setting up a construction firm in North Dakota. What are the challenges present in those areas and what can be done to ensure that the firm maintains its operations and becomes successful in the long run.
Among the questions raised during the research, include:
Who are the major competitors in the area of North Dakota?
It is crucial that during the fact-finding mission, to identify the major players in the industry and the level of threat they pose to the continued success of the business. It shall be paramount the number of competitors present, there level of sophistication in dealing with complex constructions and which market have they mostly dominated to avoid offering unnecessary competition while failing to tap into the market that does not have competition (Entrepreneur Press & Kuehn, G 12).
Who are your customers?
For a business to thrive, let alone a construction firm, it is paramount to determine who your likely customers are. This will help the firm be able to design its projects to suit their customers. Failure to determine ones customers is one of the crucial reasons that have led to many firms collapsing. Another important fact that is noted concerns the presence of competitors, why should such customers go for your services instead of those offered by competitors. Do you offer better construction terms than the rivals, such as providing quality construction work at a cheaper fee. Customers will also want to determine the level of competence you have. This is an area where a lot of mining takes place, bombs used in the process resulting to grounds constantly shaking. Customers will want quality houses that will last for a long time without certain pillars breaking or the house wearing out (Entrepreneur Press & Kuehn, G 14).
Do the members of your team have a high level of innovativeness or are they just textbook material?
One of the reasons that lead to businesses failing is due to lack of innovation. Times are changing and customers require firms with fresh ideas on constructing houses and buildings. North Dakota due to its rich oil fields has grown to a business harbors, external investors are investing into the area and would therefore, need construction firms in the area. It is pivotal that your firm be innovative, creative, be able to come up with new construction ideas to have an edge over other firms. Construction firms fail after some time when they fail to have new ideas for the ever-dynamic industry.
Does your firm have enough finances to start an operating firm in an area that has a high demand for houses?
One of the major factors likely to affect a business when starting up is the lack of finances. Construction unlike other normal business such as starting a retail shop requires a lot of initial capital to start up. Starting a firm in North Dakota means that many people will be seeking your services and should the firm not be able to handle a strenuous clientele when starting up, it may not build up a good reputation for itself in future. Starting up a construction job means, a lot of capital is invested into building materials, expert advice and labor required for the job, all this is quite expensive especially when starting up as the firm has to pay for permits and licenses required by the government to operate (Demkin and American institute of Architects 52).
What kind of construction works is required in the area?
Taking note that analysts are not sure of how long the oil reserve will last means that the great majority may not want houses that will cost them millions only for their source of income to dwindle over time or stock prices to lower resulting to oil prices going down and subsequently, salaries to be cut back. From the research, information on the type of houses needed by most workers in the area should be determined to avoid relating with the wrong market that would prove dismal to the business.
What are the legal matters required?
It is important that you assess the legal matters related to starting a construction firm, all the necessary licenses and permits required to operate in the area of North Dakota. One may seek the services of a legal expert to define the necessary legal requirements that the firm may seek not only to start a construction firm but starting it in that area. Every country in the United States has their own laws, rules and regulations that have to be have to be met when setting up a construction firm. Tax requirements have to be met, deductions to be met by each employee is noted to facilitate easy operation without interference from the law for lack of compliance.
What is the most convenient place to start construction of houses for workers?
During the research, it was noted that employees, especially those working at the oil mines, only get up to four hours of sleep every day. They therefore prefer sleeping in their cars to get the most out of that time. This means that, they do not have enough time to travel long distances to reach their homes. The firm will have to choose a suitable site to build homes specifically for such workers. Such areas should be safe from the constant explosions in the mining areas, should not be more than ten minutes away when driving and should be located in an area that has good infrastructure. Roads should not be terrain but smooth and accessible to make it possible for first transportation to those areas.
Are there auxiliary services within the area of construction?
This is another major factor that should be analyzed. The firm is only engaged in construction and may require other services such as transportation, banking, and hospitals. Such services are important to the firm as they provide services that the firm requires in order to continue with its operations (Demkin and American institute of Architects 54).
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How much are you likely to charge for construction of houses?
Due to the high demand, existing rental houses are very expensive making many residents not look for housing apartments. The core of the business is to make profit to ensure its survival. The firm should however, analyze the fee likely charge residents to encourage them to seek alternative housing with your firm instead of their cars. The fee should be affordable and within the current earnings of the employees.
What are the considerations for the management of the firm?
Despite the firm containing highly qualified engineers, it requires proper management to ensure it is successful. While the engineers are working in the field surveying the land, and carrying out construction, managers will be in-charge of the daily running of the firm, establishing contacts and seeking investors vital for the continued growth of the business. This shows that for the firm to become successful, it must have a management structure to oversee all its operations and evaluate whether they are feasible or not.
Before setting up the construction firm, it is important to consider all these questions to ensure the success of the firm.
Reference
Demkin, A. J. & American Institute of Architects. The architect’s handbook of professional practice. John Wiley & Sons. New Jersey: 2008.
Entrepreneur Press & Kuehn, G. Start your own construction and contracting business: your step-by-step. Entrepreneur Press. 2007.
World Bank. World Development Indicators 2006. World Bank Publications. Geneva: 2006.
