0407: Critical Crisis Takeaways For Construction Business Owners

This Podcast Is Episode Number 407, And It's About Critical Crisis Takeaways For Construction Business Owners

If there's one thing last year taught us, it's how quickly the world has changed in such a short time and that we cannot take anything for granted. While we can all hope that the pandemic is a once-in-a-lifetime scenario, there is a lot in life and in business that is uncertain, and there is a great deal we can learn from the response to COVID-19 to help plan for the future.

Yes, your construction company might have changed drastically in recent months. There is good news in that, too. It means your business is adaptable and that you can find ways to survive.

Here are some lessons learned from resilient businesses and business owners during COVID-19.

1. Be Adaptable

There are ways that many small businesses adapt to ensure they can continue operating during a crisis. The question is whether you're willing to adjust or are fighting to keep your business the same as before.

You might miss the old ways of running your construction business. However, losing the old way of doing things doesn't mean you have to hold firm to them. Adapting your goods or services and letting office employees work remotely are all changes that can ensure your business stays open after COVID-19 is over and even save you money in the long run.

2. Plan Ahead

While almost nobody saw this disruption coming, some experts warned about the possibility of a recession and how to prepare for it. Unfortunately, many small business owners limit their planning to a crisis that lasts only a few weeks, which is where they get into financial trouble.

Disaster can strike at any time, and it doesn't have to be a global pandemic.

Having a healthy cash flow, savings account with enough built up to cover costs for at least a few months, and a plan for addressing recession scenarios will help your business survive tough times, whatever brings them about.

You don't want to be reactive to an emergency because that's when terrible decisions get made. Instead, plan, so you're prepared and don't have to make tough decisions based mainly on emotion. Prepare for an emergency that lasts months, not just weeks.

3. Pay Attention

In situations like COVID-19, business owners can learn from and help each other. Take a look at what others in the construction industry are doing, and even look outside your trade for inspiration. Seeing someone move their services online might give you an idea of how you can remotely provide some of your services. Noticing how construction businesses similar to yours adapt can influence you to make beneficial changes to your company.

Reach out and talk to other business owners; to your clients to find out how you can help them. At times like these, you aren't alone in trying to keep your business operational. Everyone is looking for solutions, and there's a good chance you can help each other.

4. Embrace Innovation

Innovating internally, such as upgrading your technology department or even as simple as updating your systems and processes, or externally like offering a different business model to your clients.

One of the most often cited reasons for not embracing innovation is that it is too risky. Prototyping or testing often comes with a high cost. Combined with the cost of the time spent, this can all be relatively high for an unknown outcome. There is no way to eliminate the risk in innovation, but there are ways to reduce it.

It's easy to understand the dilemma. A construction business owner doesn't want to put himself in a position to waste time or money, especially as the economy continues to climb out of the sinkhole, and yet, businesses that don't innovate will suffer severe consequences, maybe damaging the construction company beyond repair. 

It's important to back up and ask a few key questions:

What problem is being solved, and for whom? What are the financial benefits and drawbacks of this idea? Identify the potential roadblocks.

Final thoughts

Global pandemics can devastate a small business and have lasting impacts on the industry. There are many lessons that construction business owners can take away from COVID-19. To help them survive the next economic emergency, being adaptable, planning, paying attention to industry leaders, and embracing innovation can all help your business through any financial disaster.

About The Author:

Sharie DeHart, QPA is the co-founder of Business Consulting And Accounting in Lynnwood, Washington. She is the leading expert in managing outsourced construction bookkeeping and accounting services companies and cash management accounting for small construction companies across the USA. She encourages Contractors and Construction Company Owners to stay current on their tax obligations and offers insights on how to manage the remaining cash flow to operate and grow their construction company sales and profits so they can put more money in the bank. Call 1-800-361-1770 or sharie@fasteasyaccounting.com