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10 ways to help recession-proof your business

March 12, 2019

Construction companies able to weather economic volatility can turn adversity into opportunity. Here are some principles to consider.

fmi construction manager

Most businesses, sooner or later, will be forced to weather a recession. Construction firms are no exception, but face challenges unique to this industry.

However, being prepared for economic downturns is not about planning for the worst. It’s about running a good business and being the best you can be.

A proactive approach today, while the economy is relatively stable, can help construction companies become recession-resilient. It can also help catapult you past the competition.

The companies that have weathered financial storms are more than survivors; they come out stronger with every economic downturn. Part of their success is that they pay attention to 10 key principles, including the following:

  • Watch cash flow. Cash flow is key to growth and is even more important during economic downturns.
  • Develop good relationships with lenders. It’s important to secure lines of credit in good times, when you need it least.
  • Prequalify your subcontractors. As a GC, your success is tied to the people you hire.
  • Prequalify owners. GCs need to carefully choose the owners they work with, seeking those who will pay on time and appropriately.
  • Monitor your portfolio and the related economic trends. Examine the mix of business you have, looking at where you think the market’s going versus the kind of work you have.

Learn more about these insights, and read five more key ideas that can help construction firms weather financial volatility in the marketplace and build resilience for the future.

Explore 10 key strategies for construction firms

The information in this publication was compiled from sources believed to be reliable for informational purposes only. All sample policies and procedures herein should serve as a guideline, which you can use to create your own policies and procedures. We trust that you will customize these samples to reflect your own operations and believe that these samples may serve as a helpful platform for this endeavor. Any and all information contained herein is not intended to constitute advice (particularly not legal advice). Accordingly, persons requiring advice should consult independent advisors when developing programs and policies. We do not guarantee the accuracy of this information or any results and further assume no liability in connection with this publication and sample policies and procedures, including any information, methods or safety suggestions contained herein. We undertake no obligation to publicly update or revise any of this information, whether to reflect new information, future developments, events or circumstances or otherwise. Moreover, Zurich reminds you that this cannot be assumed to contain every acceptable safety and compliance procedure or that additional procedures might not be appropriate under the circumstances. The subject matter of this publication is not tied to any specific insurance product nor will adopting these policies and procedures ensure coverage under any insurance policy.

©2019 Zurich American Insurance Company. All rights reserved.

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