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Office Contractor business.
Here is a terrific business opportunity that will appeal to entrepreneurs with a renovation or construction management background. Big profits can be earned operating a contracting business that specializes in office renovations. Having operated a contracting business for many years, I always found that the commercial jobs or office renovation contracts generally produced the highest profit margins, often two times that of residential renovation jobs. The higher profit margins were usually attributed to a few factors including less changes along the way (completion on time), a less competitive marketplace, and a higher grade of products used in finishing (increased average sale).
To truly succeed in this segment of the construction industry will require patience, as often jobs are not put up for tender or bidding and are awarded on the basis of a referral or having completed past contracts for the client. However, once again patience can be rewarded with profits. You can market the service by establishing alliances with commercial property management companies, moving companies that specialize in office relocation, commercial building cleaners, and real estate and insurance agents. In most cases you will find it to be financially beneficial to hire subcontractors to complete the work as opposed to hiring employees. This is simply due to the nature of the construction industry as a whole and trying to maintain employee salaries during the lean times can mean the difference of staying in business or meeting with financial disaster. Additionally, equipment can be rented on an as-needed basis to keep start-up costs in check. Profit potential will vary on a job-to-job basis, but when estimating always try to maintain a 50 percent markup on labor and materials. Using this pricing formula will result in a 33 percent gross profit margin prior to operating overheads and taxes. Aim to generate gross sales of $1 million per year and you can generate gross profits in excess of $300,000.