{"id":59649,"date":"2026-04-30T08:00:52","date_gmt":"2026-04-29T23:00:52","guid":{"rendered":"https:\/\/norimen.net\/?p=59649"},"modified":"2026-08-09T14:00:04","modified_gmt":"2026-08-09T05:00:04","slug":"public-works-3-reasons-its-a-nonprofit","status":"publish","type":"post","link":"https:\/\/norimen.net\/en\/public-works-no-profit-3-reasons\/","title":{"rendered":"I\u2019ve written about the three reasons why public works companies aren\u2019t profitable, from the perspective of a slope contractor"},"content":{"rendered":"

Hello, everyone. This is Enta.<\/p>\n

\"Why don't public works companies make a profit?\"<\/p>\n

Having worked in the field for 30 years, this is something I\u2019m always thinking about, lol.<\/p>\n

 <\/p>\n

I had the opportunity to read an analysis of the structure of the construction industry on social media, and I was finally able to put into words the sense of unease I\u2019d been feeling.<\/p>\n

Today, from the perspective of a civil engineer and slope engineer, I\u2019ll discuss three structural reasons why this isn\u2019t profitable.<\/p>\n

This is the perspective of those who are on the receiving end of this reality every day, not those analyzing it.<\/p>\n

Mr. Takagi of Craft Bank Research Institute<\/a>I'll take a moment to reflect on this, drawing on that post!<\/p>\n

\"A<\/p>\n

\n

\u2460 \"There are way too many\"\u2014I totally feel that lol<\/h2>\n

According to the Ministry of Land, Infrastructure, Transport and Tourism\u2019s \u201cSurvey on the Number of Licensed Construction Companies\u201d (published in May Reiwa 7), the number of licensed construction companies as of the end of fiscal year Reiwa 6 was483,700 businesses<\/strong>\u3002<\/p>\n

According to the 2024 White Paper on Small and Medium-Sized Enterprises, there are approximately 430,000 companies in the construction industry and approximately 340,000 in the manufacturing industry (number of companies by industry).<\/p>\n

There are far more companies in the construction industry than in the manufacturing industry.<\/p>\n

This includes both prime contractors and subcontractors, but most of them are subcontractors.<\/p>\n

There are plenty of slope contractors, too\u2014no exception.<\/p>\n

Even though people say there\u2019s a labor shortage and the numbers are down, I still get the impression there are quite a lot of them.<\/p>\n

Well, when one goes out of business, it just splits up into independent operations, so it\u2019s kind of like when one goes under, two or three more pop up lol.<\/p>\n

So that's why dumping is on the rise?<\/p>\n

 <\/p>\n

Lately, there\u2019s been more talk about business succession. It\u2019s become quite common for me to hear from company presidents over 65, through my personal network, asking, \u201cWould you take over my company?\u201d<\/p>\n

We\u2019re starting to hear occasional reports from small companies that are on the verge of collapse due to soaring material costs.<\/p>\n

From the perspective of those on the inside, natural selection isn't something that \"might happen\"\u2014\"It's already started.\"<\/strong>That's it.<\/p>\n

But it's splitting up again lol<\/p>\n

\"The<\/p>\n

\n

\u2461 From the perspective of someone who has gone into business for themselves, \u201cindustries that aren\u2019t suited for self-employment\u201d are...<\/h2>\n

Since I\u2019m self-employed, this is a bit hard to hear, but you\u2019re absolutely right.<\/p>\n

Specialized trades such as slope construction, in particular,Industries Where It's Difficult to Achieve Economies of Scale<\/strong>That's it.<\/p>\n

 <\/p>\n

Spray-on concrete plant, drilling rig, rock bolt machine, scaffolding materials, storage yard, dump truck, 4-metric-ton Unick crane. All of them are really expensive.<\/p>\n

For example, a single spray-coating plant currently costs between 5 million and over 10 million, while anchor work costs at least 15 million to 80 million (including crawler equipment, etc.).<\/p>\n

The unit prices for rebar, prestressed concrete steel, cement, and sand are also quite high.<\/p>\n

 <\/p>\n

The days when a one- or two-person crew from a small private company could get the job done with just a generator and a hammer drill are over; most of them are now employed by companies and enrolled in social insurance.<\/p>\n

In areas without machinery, the work is generally handled by teams employed by major companies, so there\u2019s a sense of security, but it\u2019s hard to make a big profit.<\/p>\n

Even if you have the machinery, the challenge is whether you can recoup the cost...<\/p>\n

 <\/p>\n

Even if you work twice as hard, your take-home pay is only half. Since there\u2019s no economies of scale after you go independent, this kind of situation happens all the time.<\/p>\n

Even so, the number of people who go into business for themselves doesn't seem to be decreasing\u2014perhaps because of the belief that \"a true craftsman is only fully realized when working independently,\" or the idea that going into business for yourself means making more money!<\/p>\n

I guess that\u2019s because Showa-era values are still alive and well in the industry, huh!?<\/p>\n

However, slope stabilization and civil engineering work,A true team sport<\/strong>That's it.<\/p>\n

You need at least three people to do slope stabilization work!<\/p>\n

We'd really need at least five people to handle one job site properly.<\/p>\n

Even to drill a single anchor hole, you need at least four people\u2014a drilling operator, plant staff, and two on-site workers\u2014plus the machinery.<\/p>\n

The scope of what a sole proprietor can do is truly limited.<\/p>\n

So independence doesn't mean freedom\u2014it means doing everything yourself, huh? lol<\/p>\n

\"A<\/p>\n

\n

\u2462 \u201cThe industry lacks a foundation in business administration\u201d<\/h2>\n

In Germany, in addition to journeymen (Geselle), there are requirements for setting up an independent business, such as\"Meister\" Certification<\/strong>Apparently, there is one.<\/p>\n

Major occupations in the construction sector fall under Annex A (regulated occupations) of the German Crafts and Trades Act, and<\/p>\n

In principle, the system is set up so that you cannot establish a company under your own name without a Meister certification.<\/p>\n

The certification curriculum includes courses in business administration, accounting, and laws and regulations.<\/p>\n

*I have not personally verified the text of the German Crafts Act (Handwerksordnung) down to the specific provisions. This is written as an overview of the system.<\/p>\n

 <\/p>\n

So, what are the licensing requirements for the construction industry in Japan?<\/p>\n

As the person in charge of managing business operations, \u201cat least five years of experience as an executive or in a similar capacity\u201d; as a full-time technical specialist, a national certification or relevant work experience.<\/p>\n

In short, as long as the required number of years has passed and the registration on paper is in order, the permit will be granted.<\/p>\n

There is absolutely no need for any evidence of having studied business management.<\/strong>That's right.<\/p>\n

Even an idiot can get a license if they've been doing business-like things for five years!<\/p>\n

 <\/p>\n

I worked as a salaryman for 10 years before going out on my own, but after I did, I was surprised to realize, \u201cI have no choice but to figure everything out on my own,\u201d lol.<\/p>\n

I really struggled with the legal stuff in particular, lol.<\/p>\n

In my case, I started out as a site supervisor and already had a general understanding of cost management and other aspects, so I was able to manage, but it would probably be much harder for someone starting out as a craftsman.<\/p>\n

Driven by the thought that \u201cI\u2019ll make more money if I go into business for myself!\u201d or the feeling that \u201cI hate working for someone else,\u201d<\/p>\n

This scenario\u2014\"going independent, taking on work without even knowing if the rate is low, and then suddenly going under due to cash flow problems\"\u2014is happening on a massive scale.<\/p>\n

This isn't a matter of a lack of personal effort, but rather,Isn't this an industry-wide issue?<\/strong>I guess so, but aren't there very few people in the construction industry who'll just blindly go along with everything? lol<\/p>\n

\"Construction<\/p>\n

\n

There are plenty of companies out there, going independent isn't worth the effort, and I'm teaching myself how to run a business.<\/p>\n

I can't help but laugh as I'm writing this lol<\/p>\n

But that\u2019s just the reality of working in civil engineering and slope stabilization, isn\u2019t it?<\/p>\n

However, while people around them tend to assume, \u201cThey\u2019re spending so much money\u2014they must be making a killing!\u201d the reality is that for most companies, that\u2019s not actually the case.<\/p>\n

Anyway, the construction business is expensive!<\/p>\n

After all, the profit margin under those circumstances is pretty obvious.<\/p>\n

Especially the more you outsource.<\/p>\n

 <\/p>\n

It's a tough topic, but we can't move forward unless we face the reality of the situation head-on.<\/p>\n

So, what should you do to make a profit?<\/p>\n

I'm going to try to think about that.<\/p>\n

 <\/p>\n

See you later.<\/p>\n

Which Is Better: Being a Salaried Employee or Going Independent?<\/a><\/p><\/blockquote>\n