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The Best Industry In The US  |  Remodeled Construction Image

The Best Industry In The United States
By Matt Stevens
Tue, 15 Mar 2005, 06:57 PST

My 17-year-old child is going off to college. She is starting ask questions about industries and careers. She has made me think further about what construction contracting has to offer her. I have concluded it is the best career a young person could choose. You may not believe it, however the facts will show our business is unmatched. It offers participants long-term tangible benefits. Many people will argue however, let me show you the many virtues our industry has. You be the judge.

Merit Based - the construction industry rewards hard work. There is no substitute. We are all dissatisfied with the work ethic today. When we find it, we reward it. Let me give you an example - a person comes to you (male / female) doesn't speak of English well but has promised to work hard and keep their nose clean. You give them a chance and 1 year later, you are glad you did. They kept their promise. Now, what will you do? Ignore them? Cut their pay? Of course not. You will increase their wages and give them more responsibility. Construction contractors reward merit.

Additionally, the industry is also. Let me show you. What is the best advertising in the construction business? A completed project on time and on budget. This speaks volumes of a contractor's savvy and diligence. Word of mouth travels fast. Excellent contractors have more opportunities for work than their lesser competitors.

Small is Big - Construction rewards the small construction firm. That is they make a higher percentage of profit. This is a variable cost business. In other words, you do not have to have "critical mass" to be profitable. Net profit statistics consistently show that smaller contractors make a higher percentage of profit before tax than their larger brethren do.

Tangible - Our industry erects monuments. Our work is visible to everyone. We can see it for decades after we complete it. Construction people show friends and relatives point out these projects. Unlike other industries, we see what we accomplish every day.

Best Earning Years Later in Life - Statistically, this is difficult to prove. However anecdotally, a case can be made. In my travels working with clients in the United States, A contractor's profitability grows over the years. I have seen increases as either percentage or gross dollars or both. Construction becomes more profitable with experience.

In contrast, the best earning years of most other industries is between 35 and 50. (Professional Sports excepted). The reason for this youthful compensation is energy, the willingness to travel, to take risks and to make extraordinary things happen. Profitable construction is based on consistent and correct processes, somewhat like the manufacturing business. The more consistently a person does the correct things, the better the outcome.

In our opinion, construction contracting consists of two components people and processes. What does an older executive have over a younger one? The knowledge and experience handling people and building projects. (They have the scare tissue to prove it!) My conclusion is a contractor's best earning years tend to be in their 50's and 60's.

No Consolidation - The construction industry is an owner operator business. Efforts to consolidate have shown the power of the small business you cannot beat an owner who is risking his wealth every day. Large firms are at a disadvantage. Again, small is big.

Local - Where can a construction company be started? Anywhere! Construction expertise is needed in all fifty states. It does not need a port facility or wide-open spaces to operate. You can start one where you live and that is family friendly. An important consideration these days.

No college degree needed - Construction people who have worked in the field for several years have the equivalent of a college degree. A majority of construction knowledge is earned while working not studying. Technically, you learn how to install quality work with your own two hands. I strongly believe that someone who has owned and operated a construction business for 20 years has a master's degree maybe even a Ph.D.

No large capital investment needed - Some successful construction firms have been started with no money. Beginning capital is not a major obstacle. This is a cash flow and variable cost business. To start, a person does not have to float an IPO or have a rich uncle. What they need to do is understand the economics and have technical expertise.

Shortage of people wanting to be in it - Industry economists agree that we still have a shortage of people employed in Construction. Conservatively, the number needed is 150,000. As we have learned in our lifetimes, the Demand / Supply curve is very powerful. A shortage of anything drives the price up. Competent people earnings have outstripped general wage increases in other industries. That is job security as well as wealth building. Ask a computer programmer or airline pilot about over supply of people and the effect on wages and opportunity.

Non-Importable - The trend of outsourcing to other countries has grown in the last several years. Take your pick: Computer Programming, Manufacturing or Engineering. Construction is insulated from this problem. Put bluntly, you cannot dig a hole in the Orient and import it into the United States. The majority of labor must be "insitu" or at the project site.

What other industry has all these attributes. The answer is none. Although, the perception persists that our industry does not have much to offer young people. It is not true. Surveys have shown people in construction do not recommend our industry to their children. We must stop this habit. I challenge each of us to promote our industry. Let the truth be told.

About the Author:
Matt Stevens is a management consultant to construction contractors. He has pursued his profession since 1994. He has been active in the construction industry since high school. He works with contractors across the nation.

Taken from: http://www.contractorsblog.com/archives/construction_contracting/