Some experts says that there is more than a 50% chance that the United States will go into a recession in the next 18 months. During the Great Recession, the construction business really took it on the chin.
Even though the next recession probably won’t last as long or be as bad as the Great Recession, the construction industry is already dealing with problems in the supply chain, rising prices, and a lack of workers.
Now is the time for construction business owners to start looking for ways to protect their business from a recession. Even if there isn’t another recession, it’s always a good idea to build a business that can handle any problems.
Here are some tips from Charter Capital that can help you thrive in down times. https://charteraz.com/
Keep money on hand
It’s smart to save up enough money to get your business through hard times. You don’t want to slow down the growth of your business by sitting on cash instead of putting it to work. If there isn’t much work, you’ll want to have enough cash on hand to cover your operating costs and overhead for a few months.
Don’t Count on Queues
During the last recession, many construction companies slowly got rid of backlogs of nine to twelve months as projects were put on hold or canceled because no one could get financing. Now is the time to start thinking about how you’ll keep getting work when things get hard. This could mean focusing on one or two niches or adding to what you already offer to give your clients more.
Hold on to your best people
Last month, construction jobs were at their highest level in 10 years, and they have been getting closer and closer to where they were before the recession. Even so, there is still a shortage of skilled workers in the construction industry. When people lost their jobs in construction during the last recession, they took with them a lot of experience and knowledge.
If you want your business to make it through another economic downturn, you’ll need the help of your best employees. This means paying them a fair wage or giving them some other kind of incentive, and getting them enough work to keep them busy.
Know what it will cost you
Companies that don’t know their actual project costs, including job costs and overhead costs, have razor-thin profit margins. This is because the costs of materials and labor are going up, projects are getting more complicated, and deadlines are getting shorter. When you know and understand how much each job costs, you can make more accurate estimates and make more money.
Cut the Fat
Take a close look at how you do things now. Are you taking on too much by doing too many things at once? Do you have equipment that sits around for months? Do you have employees who don’t do what they’re supposed to? Are you spending money on things that have nothing to do with your growth strategy? If you said yes to any of these questions, now is the time to cut the fat and make your company a lean, mean, recession-fighting machine.