Here’s how you can keep your business going in a sector where key infrastructure projects have been put on hold, and sentiment isn’t as positive as it was pre-World Cup 2010.
The Black Business Council in the Built Environment (BBCBE) recently addressed parliament to address a shortage of access to infrastructure projects, delayed payments and deferred spending by government.
The council believes these factors to be the key challenges faced by emerging black-owned businesses in the construction sector.
Add labour matters, safety issues and cash flow conundrums to this list of challenges and it becomes easily discernible that it’s no easy feat to keep new construction businesses going in a post-World Cup environment. So, what do you do next?
You can still build your business one brick at a time
There’s hope for up and coming black-owned construction firms in the private sector. Take it from Simphiwe Majozi and Sihle Ndlela, co-founders of Majozi Bros Construction:
Create your own opportunities
The Majozi Bros founders advise working hard, never taking no for an answer, and making your own luck.
“We launched in the middle of a boom market,” says Simphiwe Majozi. “Then suddenly the market started taking strain and jobs dried up. We realised we could wait around and hope things would get better, or we could create our own opportunities.”
Related: Funding for black-owned construction and engineering businesses
Construction work may be closer than you think
By doing some research, the pair identified an emerging semi-township area where buyers showed interest in building new homes. They decided it was time to evolve – from builders to developers.
“Buy a plot, develop it, sell it. That was our plan. We wouldn’t just be the builders, we’d be the developers. We’d give ourselves work,” says Ndlela. Once this risk paid off, the profits were used to buy their next property.
Embrace opportunities to diversify
Majozi Bros Construction has also recently joined forces with tool hire and sales company Hire-It to establish a Level 2 B-BBEE joint venture (JV) company called Majozi Bros Tool Hire & Sales.
“We have a 51% share in the company and it’s the first black-owned business of its kind in KwaZulu-Natal,” the pair say.
How you can build a sturdy construction business
Like Majozi Bros, you can become a self-sustaining, diversified construction company. But, you’ll need some foundations in place to do so. These elements can form part of the necessary groundwork for construction start-up success:
1. Don’t buy what you can rent
Construction sector experts atFounder’s Guidesay most construction start-ups struggle to acquire the finances needed to operate profitably. This is because of the purchasing of expensive equipment. While starting a construction company requires capital equipment, not all of this equipment needs to be owned by your business in the early stages.
Renting capital equipment is ideal for a construction start-up
Rent the equipment instead of buying it, as it’s far more cost-effective. When renting, you only pay for the gear for the period of time it’s needed. In a start-up, buying everything but only using it occasionally, depletes much-needed funds that can be used in other aspects of the business.
2. Recruit workers that want to work
The faster and more efficient your on-site personnel are, the sooner projects can be completed. Construction staff who are unproductive delay the job and risk your company’s reputation if you don’t deliver within the agreed-upon timeframe. Avoid getting into the risk of paying penalties for not delivering a project on time.
How to find employees that will excel in construction
Review your recruitment process to ensure you can identify productive people. Always conduct research into a candidate’s previous job and speak to their references directly. Managerial appointments can be key in ensuring on-site productivity, because good supervisors will actively monitor everyone on site. They can set a good example for your team to follow when it comes to work ethic.
Related: Significant trends affecting construction for the next three decades
3. Strive for safety – avert risks on site
Protect everyone on site to avoid incidents that could lead to legal ramifications. Safety is a top concern for construction companies of all sizes because a business owner can be held liable. Depending on the magnitude of the incident, a legal claim could potentially close down the business before it even reaches cruising altitude.
Put safety first in a construction business
Avoid accidents that could easily be prevented by improving the safety of your employees and the site itself. Ensure safety equipment is worn and gear is tested adequately before use. There is no such thing as ‘over-cautious’ when it comes to site safety.
As you build your business from strength to strength, it’s advised that you learn as much as you can from other industry players, clients, suppliers. “We believe that information and industry experience is power,” The Majozi Bros founders say. “You can never know too much.”
- Avoid spending money on buying expensive equipment you won’t need for every job.
- Ensure you’re hiring the best workers for the job at hand.
- Prioritise safety to prevent costly accidents on site.