Any start up business has its own challenges, the biggest challenge is to develop a strategy to overcome them. Knowledge of the likely challenges one would face in a business is the beginning of successful strategy to win market share. This article looks at some of the common challenges that start up contractors in Malawi especially contractors in the MK 5 Million Category and MK 15 Million Category face.
Inexperience
The challenge of inexperience is double faceted. Firstly, most if not all clients require an experienced contractor to undertake their projects and there are no or little deliberate arrangements to accommodate inexperienced contractors. This is evident in most bid documents as it is stated clearly that as part of the Qualification Criteria the contractor must have undertaken a specified minimum number of projects of similar nature so that his or her bid can be considered responsive. Secondly, it is lack of prior experience on the part of the owner of the contracting firm. This makes it difficult if not impossible for the owner to take control of the operations in the firm as he or she relies on the expertise of the employees. If some foremen or site agents note that the owner (in most cases is the managing director) has no experience on a particular project they capitalize on that weakness to siphon money by lying about some requirements or activities.
Lack of Capital or Assets
Lack of capital or assets is one of the drawbacks for start up contractors. If you have no capital or assets it is difficult to access loans, advance capital, performance bonds, bid securities, insurance, procure or hire plant/equipment.
Poor Negotiation Skills
In construction, negotiations are part of the game. There are situations in which the contractor must negotiate for a better deal. Time and again moments arise when the contractor has to negotiate or let the clients do things their way.
No comments:
Post a Comment