Capital Equipment Acquisition in Heavy Construction

Clapp, Doug; Ph.D., P.E. Scott Shuler; Nobe, Michael D.; DeMiranda, Michael A.; Nobe, Mary Ellen C.

doi:10.1080/15578770701715003

Cited by 5 publications

(5 citation statements)

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“…The aim is to decide which solution is better tailored to a firm's desires and financial framework, and the SME entrepreneur identifies the right options and assess funding decision-making [7,9,22]. The purchasing and upkeep of equipment can constitute a huge part of the assets of an organization and can affect income [65]. Hence, the performance of the business is a component of project progress, and equipment acquisition has an effect on the cash flow and profitability of the organization owing to the high costs of ownership.…”

Section: Entrepreneur Motivation and Sources Of Financingmentioning

confidence: 99%

The Entrepreneur Motivation and Financing Sources

Eniola

2021

Journal of Open Innovation: Technology, Market, and Complexity

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The paper is to examine the influence of business innovation, business expansion, product and service development, working capital, and machinery and equipment requirement on financing choices in the western part of Nigeria. To determine the effect on financing choices, a logistic regression analysis was used. The results, in an impressive manner, indicate that entrepreneurs, essentially with working capital (WC), machinery and equipment (ME) requirements, and business innovation (BI), use internal funding sources, while business expansion (BE) and product and service (PS) development lean toward external funding sources, and more established and larger firms utilize debt financing. The approach and experiential findings offer an unprecedented degree of investigation of previous studies of Nigerian entrepreneurs. Similarly, the experimental results will strengthen entrepreneurs’ knowledge, awareness, and perception. Through their own capabilities, entrepreneurs can prepare and adapt in accordance with the business conditions in which they conduct business, and this work may help them in their choice procedure regarding the capital structure of their organization in the midst of a period when the question of entrepreneur funding is gradually emerging in the Nigerian climate.

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Section: Entrepreneur Motivation and Sources Of Financingmentioning

confidence: 99%

The Entrepreneur Motivation and Financing Sources

Eniola

2021

Journal of Open Innovation: Technology, Market, and Complexity

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“…They can be bought or rented, and they are expensive in terms of cost to an extent that; they can impact cash flow and profit potential of a SMSBC company due to the high costs associated with ownership, i.e. acquisition, principle and interest, taxes, maintenance, and replacement, Clapp et al (2007). According to Vorester (2005) in Clapp et al (2007), heavy building construction equipment costs average approximately 30% of the company assets, thus underlining capital equipment as often one of the largest investments for a SMSBC company.…”

Section: Non-payment Of Debts and Price Fluctuation;mentioning

confidence: 99%

“…acquisition, principle and interest, taxes, maintenance, and replacement, Clapp et al (2007). According to Vorester (2005) in Clapp et al (2007), heavy building construction equipment costs average approximately 30% of the company assets, thus underlining capital equipment as often one of the largest investments for a SMSBC company. Clapp et al (2007) insists on building construction companies to have an equipment acquisition policy, as it has a great impact on the profitability of any building construction firm.…”

Section: Non-payment Of Debts and Price Fluctuation;mentioning

confidence: 99%

“…According to Vorester (2005) in Clapp et al (2007), heavy building construction equipment costs average approximately 30% of the company assets, thus underlining capital equipment as often one of the largest investments for a SMSBC company. Clapp et al (2007) insists on building construction companies to have an equipment acquisition policy, as it has a great impact on the profitability of any building construction firm. Without capital equipment, it is difficult to realize/ maximize profit in any company, especially if the project is complex in terms of constructionability.…”

Section: Non-payment Of Debts and Price Fluctuation;mentioning

confidence: 99%

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Profit Maximization Strategies Employed by the Small and Medium Size Building Contractors in Dar-Es-Salaam, Tanzania

Kyssima

Tesha

Lello

et al. 2020

IJEMR

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When it comes to a firm's growth, profitability and profit maximization are sensitive matters that cannot be neglected, due to the fact that profit and profit maximization are the main aims for any building construction business. Thus, the study intended to explore the profit maximization opportunities available for small and medium size building contractors (SMSBCs) in Dar-Es-Salaam, Tanzania; by exploring the profit maximization strategies employed; examining the challenges faced by these contractors that affect realization of profit maximization; and proposing profit maximization measures, that can be employed by the SMSBCs in Dar-Es-Salaam, Tanzania. This designed survey study, employed the SMSBCs in Dar-Es-Salaam Tanzania, as a unit of analysis, which involved building contractors from Class IV, V, VI and VII, as study population and unit sample. Moreover, the descriptive design survey study involved probability sampling as a sampling technique. Literature review; open and closed ended questionnaires, were used in collecting primary and secondary qualitative and quantitative data. In collecting data, total of 94 questionnaires were distributed, whereby 78 (84.3%) were returned. Quantitative data were analyzed using Statistical Package for Social Sciences (SPSS), while qualitative data were analyzed thematically. Findings revealed charging for all amendments and change orders; dropping of low performers; minimization of waste on site; timely execution of works on site; proper tendering procedures; improving construction productivity; reliable chain of supplies; and requiring more site job experience, as the most important opportunities employed by SMSBCs. Furthermore, the critical challenges revealed were; non-payment of debts; taxes and license; lack of capital equipment; low share of work opportunities; delays caused by clients; as well as uncertainty and unexpected climate conditions. The study concluded that; most of the contractors use all the opportunities to maximize their profits in construction projects. Most of them have survived because, they continued maintaining professionalism when it comes to work despite having low share of work/ tender opportunities. Also, corruption is one of the critical factors that affects the industry, hence hindering the contractor's growth. With the new reform and government systems, this factor has reduced to some extent as compared to how businesses were operated before, but not completely eliminated. The overall satisfaction of the profits and growth of these SMSBCs has been reduced by government reforms and policies, despite the government effort to fight corruption. When it comes to taxes and license fees, most of the contractors are irritated with constant need to pay for cost/license of operations or the presence of both withholding tax and Skills Development Levy(SDL) imposed to them when conducting business. Lastly, the study recommended; introduction of proper taxation policies; centralization of government agencies responsible for collecting annual payment f...

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“…This observation is consistent with Dulaimi and Hong (2002), who found that about 30 per cent of their respondents leased 50-70 per cent of their construction equipment. Clearly, buying construction machinery and equipment is one of the largest investments that could have significant effect on a company's cash flow, and thus greater emphasis should be given to comparing the cost-effectiveness between leasing and purchasing of machinery and equipment (Punwani, 1997;Clapp et al, 2007). It is noted that the rest of the companies interviewed had either leased all machinery and equipment required (24 per cent of firms), or purchased various machinery and equipment and established subsidiaries involving the leasing of construction machinery (8 per cent of the firms).…”

Section: Strategies Of Singapore Contractorsmentioning

confidence: 99%

The survival strategies of Singapore contractors in prolonged recession

Lim

Ling

2010

Engineering, Construction and Architectural Management

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Purpose -Contractors adopt various strategies to achieve their firms' objectives of continued existence and further development, and to guide the relationship between the firms and the business environment within which they operate. An economic recession drives firms to undertake unusual steps to survive within an environmental context. The purpose of this paper is to examine the survival strategies of Singapore contractors in the eight years of unprecedented recession in the industry from 1997 to 2005 are examined. Design/methodology/approach -In total, 34 interviews were conducted with senior executives of large and medium-sized construction firms in Singapore to identify their survival strategies during the recession period. Findings -Three categories of strategies are identified: contracting-related actions, cost-control related actions, and financial-related actions. The results show that most contractors opted to bid for more projects that are within their firms' resources and capabilities in contracting for jobs. To control cost, all contractors implemented stricter site management on material wastage, stricter financial management on firms' cash flow, stricter and procurement procedures. The majority of them froze salaries and stopped hiring. In order to remain solvent, most contractors set aside a sum of money from their reserves for unforeseen circumstances. Practical implications -Contractors should learn how to stay adequately lean in managing their business in order to be flexible and responsive to changes within the business environment. The findings highlight the importance of effective cost, risk, relationship and resource management. Originality/value -The findings provide valuable lessons to construction firms in preparing for volatile market conditions during a recession.

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Capital Equipment Acquisition in Heavy Construction

Cited by 5 publications

References 4 publications

The Entrepreneur Motivation and Financing Sources

The Entrepreneur Motivation and Financing Sources

Profit Maximization Strategies Employed by the Small and Medium Size Building Contractors in Dar-Es-Salaam, Tanzania

The survival strategies of Singapore contractors in prolonged recession

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