As things continue to go well in our market for the building economy and contractors are generally doing well, it's always good to avoid complacency and stay true to sound business practices. This month we'll take a look at four key areas of running the business of a construction company. I say it this way because, regardless of sector, owners and CEOs need to manage the overall business of whatever it is their company actually does to generate revenue.
In times where revenues are strong and margins are decent, inefficiencies throughout one's business can be "covered up". Strong revenue is, to some extent, a "cure" for less than optimal business practices. Even though your business may not be feeling the effects of not performing well in these areas today, when the market gets tougher you certainly will. Now is the time to ensure you have these areas covered before you get into crisis mode. The piece below puts a focus on the following four key business areas:
1. Insufficient cash flow/working capital
2. Poor estimating/job costing
3. Expanding too quickly
4. Lack of Succession Planning