An economic crisis is never planned. It appears suddenly, wreaks havoc, and leaves people and companies scrambling to adapt. While it can’t be planned, it can be effectively reacted to.
There are steps you can take to keep your construction company afloat during a crisis, and some of them are simpler than you may think. If you’ve found your construction business struggling due to recent economic events, or if you’re just trying to stay a step ahead, this article is for you.
Here are some effective tips you can take advantage of to help your business survive an economic crisis.
Resolve To Evolve: Change How You Do Business To Survive The Crisis
Sometimes the key to surviving a crisis is to evolve. You have to be prepared to change your business practices and give clients new reasons to choose your company for their construction needs.
One option is to seek new qualifications. You can become a licensed contractor to increase your knowledge about the industry and the number of jobs you’re allowed to take on. But before you take the contractor’s exam, you need to make sure you’re prepared.
An exam prep course will provide you with the necessary education to pass the test the first time. Learn more about the course now and begin your journey to get your contractor’s license. It’s important to note that in many states, like Tennessee for example, you’re required to be licensed before performing large contracting jobs.
Another step you can take to evolve and grow your company is to invest in continued training for all employees. Being trained in multiple areas allows you to take on a variety of jobs, increasing the amount of work you can find during a crisis.
In addition, make sure you are using construction softwares such as mileage tracking and construction time card app. You will fail to job cost a project or calculate the amount of your time and profit without keeping track of hours spent on specific tasks. Accurate time tracking will provide valuable insight concerning expenses, working hours, and labor costs.
Consider specialized training in plumbing, electrical work, or other skills that pair well with construction work. Don’t forget to check into the qualifications needed to professionally practice these new skills.
Transform Transparently: Keep Your Customer’s Trust By Keeping Them In The Loop
There’s an issue with transparency in construction. It’s considered too time-consuming to provide all the data to investors, let alone clients. This attitude overlooks the potential benefits of operating openly and honestly with clients.
Letting your clients know how an economic crisis is affecting you can build trust, and make you more relatable. That improved sense of trust leads to more jobs and more efficient work because everyone has the information they need to move forward.
As you adapt to new conditions, let your clients and investors know how that could affect them. Share the educational and organizational changes you’re making, and ask for meaningful feedback. You never know who might have an excellent idea that could help you get back on track.
Transforming transparently also saves you from wasting energy trying to hide what’s going on. Honesty is the best policy in any business, and it will be appreciated.
Put Your Pride Aside: Seek Help From Others To Save Your Business
If you can’t find a way to recover your construction business on your own, it could be time to set pride aside and look into business rescue options. The first step is to determine if your business qualifies as insolvent.
Here are a few indicators that you could qualify as an insolvent business.
- You’re tied into a long-term liability like a lease that has become an unnecessary financial burden.
- You’ve lost a significant amount of clients.
- You’ve been left waiting for work to be allowed to resume due to Covid-19.
- You recently made financial investments to secure growth that you can no longer follow through on.
If your business fits these qualifications, you may be insolvent and qualify for business rescue options such as a Creditor’s Voluntary Liquidation, a Company Voluntary Arrangement (CVA), or an Administration.
A Creditor’s Voluntary Liquidation is an affordable option in which an insolvency practitioner manages creditor claims and slowly closes down a company. The downside to this is that parts of the company could be sold.
An Administration, or ADM, is a rescue option that protects you from being sued by your creditors while an insolvency practitioner attempts to restructure your company.
A Company Voluntary Arrangement is a formal repayment plan that lasts for five years. This allows your business to keep operating while you pay back your debts. Your monthly costs will be lowered and you’ll remain in control of the business.
A CVA is generally considered the best rescue option for businesses. Look into which options work best for your company, and consult with other members of your company about what decision should be made.
If your construction business is struggling due to an economic crisis, these effective tips can help begin the journey to recovery.