The Sharing Economy: Bringing an old concept to the Construction Industry
“The sharing economy” is a new term for an old concept. Do you need an accountant or book-keeping services in your construction business? What do you do, hire either as a direct employee or subcontract those services from an accounting or book-keeping firm? Another way to think about this is to carefully considering specifically what you need. For example, need a drill to create a hole? Do you really need the drill or is the hole actually what you need? Today, the sharing economy has expanded to include home-sharing sites like Airbnb or ride-sharing sites such as Uber. Although construction has long known the value of this concept and practiced it through subcontracting, the industry can benefit further from leveraging this tradition in different ways.
Construction has typically emphasized purchasing construction machinery, but practices may be beginning to shift. A recent article in The Wall Street Journal shows that the trend is finding traction after years of economic uncertainty and as federal emissions standards increase the costs of heavy construction equipment. In addition, machines may not be used consistently, making them a less attractive investment. Yard Club, a firm that has attracted capital investment by Caterpillar, operates through an app and website that connects owners of construction equipment with those who wish to rent. The company charges a fee and requires a service agreement and insurance. While it may seem that companies such as Caterpillar would view this as an impediment to revenues, they will still earn money on rental fees and repairing equipment. EquipmentShare is another venture connecting owners of machinery with renters.
Some consider design-build construction a part of the sharing economy, and its use, even in complicated projects, is on the rise. Using a design-build method, a 1.2 million square foot health care facility in California was built in 18 months. Rather than using a traditional design-bid-build model, design-build can streamline the process by leveraging a team that includes both the architect and the contractor. The design-build process bridges the sharing economy and outsourcing practices by sharing expertise and information to help the project come to fruition in a cost-effective and timely manner.
Outsourcing sales and Business Development
When it comes to sales, it’s really no different. So as initially suggested, consider what your business needs are. Is it that you need a business development/sales team or do you really just need the sales to increase revenue and market share? If it’s the latter, you can subcontract the sales and business development process. In the day-to-day running of your construction business, the cost and time to hire, train, and work with sales professionals may be challenging. CRG takes this pressure off by working collaboratively as an extension of your firm, integrating your best practices and culture to drive new and repeat business. We would like to hear your thoughts on the sharing economy in construction. Would you rent heavy machinery from a company like Yard Club?
Learn more about our process and partnering with CRG, Inc. in this infographic.