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