Fanastic, always good to see another competitor (if your in NSW), I'm currently in a partnership in a building company (I don't do any of the work I'm the numbers guy) thats local to Sydney, also my family own a building supply yard, so there a few things you should know when taking the leap into a building company, please remember this is as honest as possible, so take on what you read now and see how you can change it and make your business stand out.
I only know how it works in Sydney, it may be different in your own state.
- What 'estim8' stated is correct.
- Mentoring on a business won't help you set it up the same way as others, most of the builders that do well haven't done well for 5 to 10+ years until the big break comes along.
- Highly competitive industry with the minorities in your area.
- Your husband will be taught to go by the rules in business, you wont win all the jobs like that. Though I'm not saying to break the law but everybody bends them here.
- Advertising can be a complete waste if there isn't proof of what your husband has constructed.
- Be friends with everybody in the industry, everybody knows each other, once the business is tarnished, move on to something else.
- Very difficult to recieve funds from clients, even your solicitors would have trouble.
- Clients wont care about how good you are, they want to know how 'cheap' you are, not how much.
- Costs of products to purchase at the start, try to sub-contract them all.
But please don't take this into context start the business up and enjoy it, I always like to see the disaster side to things first so I can weigh everything up.
But the rewards are grand, I know of one builder in particular that has been building over 20 years, he just got his break winning awards just recently for best luxury homes design and now only focuses on building luxury homes, he also takes a sweet earning of $12M a year, from just 5 years ago at $2.5M.
Maybe even be a specialist in a certain area, we know of alot of builders that are evolving there business into this structure to keep a competitive advantage.
One development we looked at quoting had a about 15 builders walk in and quote it, we were second cheapest to the winning builder and mind you he was cheaper by $200k, how can they afford it? The contingency for the build was negative 25% when he took it? I mean if prices of materials swung the other way he would be out of pocket, different if he over quoted the job.
Best of luck, you may have a niche in the market know one has tried yet, but I'll give you a secret for starting up, Granny Flats are huge right now, there is a order of over 100,000 to be built in the beaches area of Sydney (if you here that is), not many people know about this and there fetching profits of about $25K each, and they take 3 weeks to build, I actually know the only agent that is exclusive in selling these flats out.