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Wise Up Wednesday: Bad News, Things Are Getting Better.

Calling all Construction Businesses.

Bad News – Things Are Getting Better!

Construction businesses are more likely to fail in a growing economy than in a declining economy. How likely, you ask?

For subcontractors, the answer is it is three times more likely, according to Thomas Schleifer, PhD, of the Del E. Webb School of Construction.

OK I confess it’s an American study but the principles are exactly the same.

It sounds counter intuitive, doesn’t it? Construction businesses have been failing all around us because of economic downturn, and uncertainty, so why should they fail if things are on the up?

How is it possible that when things get better, there is more of a survival threat to construction businesses than when the economy is slow or declining?

construction businesses

So Why Is It Bad News For Construction Businesses?

Let’s take a moment to ask (and answer) a very important question: what causes a company (any company) to fail?

The simplest reason why a company fails (and the most common) is because that company runs out of cash. And running out of cash is a massive problem for Specialist Contractors, Trade Contractors and Subcontractors because it takes a huge amount of cash for your firm just to fund its normal operations.

There are lots of reasons for this, but three of the most significant drivers of the construction cash crunch are:

  • Your cash starts going out the door on a new project/job immediately
  • Slow-payment in construction is the norm and the cash coming in the door is slow to arrive
  • Retention, extra work, and underpayment are prevalent

All of these factors have a negative impact on cash flow.

In other words, before you can think about the cash needed to fund growth, you have to think about the cash your business is already using. In other words, it’s not just growth that eats cash, just your normal business operations eat a ton of cash!

It Is The Worst Of Times For Construction Businesses

It is a massive understatement to say that the past few years have been anything but plain sailing for the construction industry, and the total number of construction insolvencies in England and Wales just keeps on increasing.

The year ahead isn’t set to be easy either, with no-one truly knowing what is round the corner. And even if things do start to turn around, is this really good news for your business?

That’s why we have put together our Streetwise guide to being well prepared for any eventuality in your business:

Ask Questions and You Will Get Answers

If you have some questions or you are unsure about what to do, don’t be afraid to ask others for help and advice. But, make sure you ask the right people, such as the seasoned professionals at StreetwisesSubbie.

One of our key strengths is our nationwide team of independent professionals with literally lifetimes of expertise in all manner of construction related businesses covering just about every business solution you could ever need to know.

Problems WILL Occur

It might not seem like it now but regrettably it’s inevitable that at some point during your business’s lifespan a serious problem of some sort will occur, and so you need to be prepared for this eventuality.

For example, if you were to stop getting paid, or were being clobbered with a claim for delays, would you know what to do about it? failing to take the right action sooner rather than later always makes matters worse.

Check out what we can do to help when the going gets tough. Just Mouse Here

Be Flexible and Ready For Change

The construction industry may have been stuck in its ways for many years, but it doesn’t mean you have to be. Review the focus of your services to keep you ahead of the pack and ready to secure a major advantage. Look at other areas and profitable niches in which your company could operate, maybe come and talk to one of our experts about it.

What Do You Know?

Do you sometimes feel overwhelmed by all the different challenges of running your company? You aren’t alone, many Specialist Contractors feel exactly the same. But that doesn’t mean you can’t learn, and it certainly doesn’t mean you shouldn’t ask for help!

In addition to lots of free information on our web site, we have some great guides available and my very own book (yes I’m actually smart enough to write a book) is 25% off! Just Mouse Here.

And if you need a hand give our Helpline a call on 01773 712116, and have a chat with one of our friendly team.

A Little Help From Your Friends

Not everyone in the construction industry is in direct competition with each other. In fact, when we work together we can earn more money and get complex jobs done a whole lot faster.

If you’re on LinkedIn come and join our group. There are presently 2,26-1 like-minded members and you can find it here. And, if you’re not on LinkedIn, you should be!

Marketing For Construction Businesses. Don’t Cut It, Improve It

When money gets a little tight, many people reduce their sales and marketing. Short term gain = long term pain!

Without a steady flow of the right kind of enquiries margins will be squeezed and work will dry up. Come and talk to us about how you can improve the enquiries coming into your business.

Improving The Lives Of Specialist Contractors

Our objective is simple. We want to improve the lives of Specialist Contractors. And we do that by bringing you cost effective resources to help make your life easier and your business more profitable.

By working with our Service Delivery Partners across the country, we bring you professional support in all the important areas of your business.

And, because we only work with Specialist Contractors you can be sure that we know the kind of problems you face, and the solutions that work best, which saves a lot of time, and a lot of money.

So please feel free to give our friendly Helpline a call on 01773 712116 or email us here.

Please remember, if you need any support please take action sooner rather than later. If you’re not sure what you need, or just want a second opinion, please give us a call on 01773 712116, or drop us an email.

( Image by succo from Pixabay. )


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Construction’s a tough place to do business right now, and Specialist Contractors need all the help you can get. That’s why you will find our resources and expertise are invaluable, whatever the size of your business and whatever your specialisation. We’re here to help you solve all your business problems, including the crucially important contractual ones, such as getting paid.

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