Home – New Forums Starting your journey Starting a Residential Building Company

  • This topic is empty.
Viewing 4 posts - 16 through 19 (of 19 total)
  • Author
    Posts
  • #1136306
    NathanBoxa
    Participant
    • Total posts: 34
    Up
    0
    ::

    Bump, sorry for bringing up an old post. Business setup is taking time.

    Since i made my first post ive registered a Pty Ltd Company, become a member of the HIA, set up a business bank account and have the Certificate of Eligibility for Home Warranty Insurance.

    Ive hit a bit of a wall in which direction the business will be heading. I hope to just work on Extensions for the first few jobs, but as im a builder i don’t really handle the planning of a project. I realise i can, but waiting on council approvals takes too much time and the cost for me at the moment is too high.

    This affects what i should have as a trading name. As i cant really advertise as an extension builder when i wont be doing the design side of things. So i feel ill have to advertise as “Something Builder” instead of “Something Extension Builder”

    Any advise or options would be appreciated, as i would like to start marketing soon.

    ps the course i entered keeps getting delayed due to lack of numbers, so i plan on operating wile refreshing my building knowledge.

    #1136307
    DANKS
    Member
    • Total posts: 134
    Up
    0
    ::

    Have you thought of just building a house or two on the go and approaching an estate agent to try move it for you while you in the middle of building?

    #1136308
    NathanBoxa
    Participant
    • Total posts: 34
    Up
    0
    ::

    Pay stages for a house are well beyond what i can afford, although an Extension or Bungalow are.

    #1136309
    smallbuilders
    Member
    • Total posts: 1
    Up
    0
    ::

    Hi NathanBoxa

    I have presumed you will be in small builder in residential construction and targeting project work valued less than $500k.

    1. I often say that you should have cash or credit of at least 20% of the contract value. There are several reasons for this, these are a handful.

    a. In project work, you will be out of pocket from the moment you commence work up until you receive your final payment.

    b. Your progress claims can be 50% of your contract value, depending on how fast your job progresses.

    c. This can cover costs that are payable before your progress claim like labour, material that is cash on delivery, contractors that are on short payment terms (which is often the case in residential work) etc.

    2. It is helpful to leverage off third party service providers. This helps you focus on your strengths. Another option is to enter into cost plus contracts. This is quite common practice where works can be difficult to estimate. Or even to make provisional sums for works which can be difficult to estimate.

    3. It is illegal to contract on a “pay when paid” basis under the security of payments law. You should have proper contracts in place with all your project relationships, including subcontract agreements. It is legal to contract on 28 day payment terms, but one thing to be aware of is that smaller contractors may be reluctant to accepting this. Payment terms beyond 14 days can be a stretch for small contractors who rely on the income they personally derive to live on. Also, if these relationships with contractors are relatively new, then they may also be reluctant to contracting with you or they may bump up their prices to cover their risks.

    4. I would not recommend competing simply on price. The construction industry is known for business failures, with recent reports showing over 20% of insolvencies coming from the building and construction industry. Many many builders work from home, particularly when they first start. My best recommendation is to keep your costs as low as possible for as long as possible.

    I work with small builders everyday. Apart from using a system like Small Builders Software, you can join an industry association like the Master Builders Association.

Viewing 4 posts - 16 through 19 (of 19 total)
  • You must be logged in to reply to this topic.