The three Ps in the construction industry are planning, planning and planning.

New businesses are taking root, spurred on by ongoing growth in construction and development. It’s wise to consult an industry specialist on what to expect and how to overcome any challenges, before investing heavily in a new company, advises Roelof van den Berg, chief executive officer of Gap Infrastructure Corporation, a leading infrastructure developer in Southern Africa.

These are his top five challenges that small businesses and entrepreneurs in construction should watch out for:

1. Forecasting and budgeting

Calculating total project costs is a monumental task and it is easy to underestimate labour, material quantities and equipment costs during the planning and budgeting phases. Appointing a skilled project manager, experienced at calculating and setting up material lists, and who strictly regulates store levels throughout, is the solution. “Spending time and money on planning is the key to a successful project,” says Van den Berg.

2. Project location

Not all projects will be ideally located – close to suppliers, subcontractors and the necessary labourers and workforce. Doing research before accepting a contract, especially projects in rural areas which are not close to cities and suppliers, is vital, as prices can easily double due to transport costs for machinery, materials and workers.

3. Supply-chain instability

Global supply-chain disruptions have resulted in higher prices and difficulties in sourcing the right materials and equipment. “New contractors should consider how any material shortages will affect their workflow and be ready to seek for alternatives – if you keep searching for a solution, you will find one,” declares Van den Berg.

4. On-site security

Construction sites are filled with expensive tools, machinery and materials. Secure storage on site and appointing a security company to patrol after hours are very important. Prioritising and allocating the necessary funding to security will pay off in the long run.

5. Don’t quit attitude

“More than 90% of new construction companies in South Africa fail within the first 24 months, despite having the relevant skills and resources to make it work. Those with resilience and a ‘don’t quit’ attitude generally succeed,” notes Van den Berg.

“Always remember that in the construction industry, a better tomorrow is just one certificate away.”

As the industry picks up steam, there are opportunities for new construction companies. Success can be achieved if small businesses take care, perform the necessary risk management to overcome challenges and provide high-quality work to clients.

Full acknowledgement and thanks go to https://www.gic.co.za/ for the information in this editorial.

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