Running a successful construction company isn’t a walk in the park. The industry is associated with various risks and contributing factors that can lead to the failure of a company. From cash flow to workload issues and business practices, anything can go wrong. Here are some common missteps that lead to construction companies going out of business.
Capital and Cash Flow Restraints
This is one of the most significant reasons why companies go under. As you know, construction companies are capital intensive ventures that require huge amounts of money to invest in fixed assets like heavy equipment, tools, or vehicles. A lot of money is also needed to pay employees, suppliers, or subcontractors. Without positive cash flow, construction businesses face failure, especially if an unforeseen need for capital comes up.
Taking on Risky Projects
Often when a company is running low on finances, they will be forced to make hasty decisions and take on jobs that are poorly suited to their company’s potential. This could push them further down into the red, forcing them to be in even more significant cash flow problems. Further, a company could be doing well on the financial front but fail to consider how risky a given project is. Some risks have the potential to cause huge losses and disrupt the entire company.
Employing Unsuitable People
Construction companies largely depend on their workers to provide quality workmanship for every job. If your company has poorly skilled or inept workers, it’s definitely going to have adverse effects on your reputation besides costing the company more money. No matter how competent you are as the owner, having inexperienced and unmotivated employees can easily harm your business. So, ensure you take the time to select your staff with care and diligence to avoid costly mistakes.
Small companies can sometimes push for fast expansion without prior preparation. While growth is a good thing, it can be a huge mistake that pushes you into an early grave, especially if it happens too soon. Focus on small jobs that are within your scope of experience and which require little expense upfront before going for the bigger projects. And as you progress, track your growth, and make sure that it never gets dangerously out of hand.
Lacking a Competitive Edge
Don’t be a cookie-cutter construction company. Being an “us too” construction company can cost you. Plan your business to have some sort of niche that you can exploit and excel in. And while you’re at it, have a little edge or something unique or different about your business. It could be a slightly different service, equipment, or process.
Using the Wrong Tools for the Job
Are you killing productivity by using wrongly suited tools for the job? A construction site presents many hazardous situations. You don’t need to add to the risk of injury by using the wrong tools or scrimping on tools and fasteners. Every tool is usually designed for a specific purpose, so choosing the correct tool will allow you to do the job right while decreasing the amount of effort and time required.
Trust BECK for Efficient Handling of Your Construction Projects
BECK has a versatile range of tools and fasteners to help with a wide variety of applications. To find out more about our products, contact us at 800-239-TOOL (8665) or search our website for the latest tools and fastening options. Click below to watch the video.