As we discussed in a previous article, it’s a good time to be in the construction business, with 93% of contractors set to increase their profit margins in the coming year. If you are already within the industry, or if you are thinking about setting up your own construction business, then chances are, you might see success.
Your business isn’t infallible. When working in construction, there are risks to your business, and while you might reap the financial rewards, you might also see a downturn in your profits.
Here are two of the reasons why.
Risk #1: Seasonal slowdown
At the time of writing, many of us are enjoying the warmer climes of the summer season. And when we say ‘enjoying,’ we should probably replace that with ‘working,’ as if you are already involved in the construction industry, you might currently have more work than you know what to do with. However, this won’t last forever. When the sun dies down and the winter months start to rear their chilly heads, you will enter the slow season when work is hard to find. And besides, the last thing you want to do in the wind and the snow is to climb scaffolds and skyscrapers, so you might choose to slow down yourself. However, when work starts to slow down, so will your profits, and that could hurt your business.
So, what should you do? Well, you need to prepare for an economic downturn, so ensure you have enough money saved up for both your personal and business life to keep you afloat during the winter months. Budget accordingly and make savings where you can. Spend time marketing yourself to those clients who might require indoor remodeling jobs. And look at these other ways to generate revenue during the slow season, so your business doesn’t come to a grinding halt.
Risk #2: Not delivering work on time
Missed deadlines will scupper your reputation, and that could have fatal consequences for your business. This is especially true during the summer months when you might have several projects on the go in your bid to meet demand. Consequently, you might well fail to deliver work on time for some of your clients. And there are other issues that could cause you to miss deadlines, such as staff productivity and sicknesses, building materials being delivered late, broken tools, and weaknesses in planning. Your clients won’t be happy, and neither will you be when word gets around, and your business takes a hit.
So, how can you manage the problem? Well, for starters, take precautionary measures. Ensure your staff are fully trained for the jobs they have to do; as this way, there will be less of a problem with productivity. In the event that any of your staff do fall ill, have a hotline to a temping agency at the ready, as they will provide you with extra people for your team. You should also take on less work, because aside from the fact that you might miss a deadline if you have taken on too much, you might also rush jobs and cut corners in order to meet demand, and that might scupper your reputation further. Be sure to use reliable building material companies too, so there is no delay in transit, and buy the best tools to avoid any breakages.
If you do need to push a deadline back, speak to your client. So long as you keep the lines of communication open with them, they will be less likely to turn against you should you fail to complete work on time.
You already know that working in construction is risky, especially when you’re working at height and with potentially dangerous equipment. However, as we have seen in this article, there are other types of risk that don’t involve loose scaffolding and falling bricks, and these could damage your business. Take heed of our suggestions then, and take the necessary steps to build rather than bring down your business.