By Jack Rubinger, construction industry writer
U.S. workers are steadily gaining confidence, according to LinkedIn’s Workforce Confidence Index from November 2. The index — which measures how Americans are feeling about their job security, finances and careers — is the highest it’s been since April: +33 on a scale from -100 to +100.
The upturn can be attributed to rising optimism in most industries, with the strongest gains in health care, public administration, media, consumer goods and entertainment.
Only three industries — construction, energy and mining, and recreation and travel — significantly lost confidence in the past month.
Why the dip from the construction industry? And do small construction-related companies have it better — or worse? Has the pandemic or our shaky economy have any impact on small construction businesses?
Customer Service Focus
Jason Simon, President at Denver Companies, LLC put it very succinctly, “Honestly, it’s all about hard work and great service. Jobsite success is what we do.That’s what we say, breathe, and deliver. We help to make our customers more successful and they reward us with more business.”
There were about 11.2 million people working in the construction industry in 2018, according to the Bureau of Labor Statistics. As of 2017, there were 454,367 small and medium sized specialty trade contractor businesses. On the flip side, The five-year survival rate for construction businesses is 36.4%
Watching Your Cash Flow
Unfortunately, 82% of businesses fail because of inconsistent or insufficient cash flow, according to Fundera, an online small business financial advisor conglomerator.
Construction companies are among the toughest businesses to manage, as their extremely high failure rate suggests. While 75% manage to survive their first year, the majority can’t seem to push past the five-year mark.
Many believe in the importance of getting an accountant specializing in small business.
Things are slow and quiet at Denise Duncan’s shop, which specializes in hazardous dust collection systems. She attributes the economy and overzealous environmentalists to her situation, but she remains upbeat.
Early business challenges faced (and overcome) by Duncan included cash flow, credit and accounting.
“When you first start out, you wear a lot of different hats and you work long hours,” said Duncan. “Growing the business enough to gradually hire others also leads to personnel and employee issues.”
For Duncan, the growing awareness of combustible dust, generated by a global combustible dust database, really brought a lot of awareness to the topic.
When Duncan told people that they make wet dust collectors, everyone’s eyes would glaze over. She had to rethink how she communicated what they made and its purpose.
Duncan believes that is important to clearly define your business and what it is you want to do. Be specific. Just saying you’re in construction doesn’t communicate what it is you do.
Getting referrals from other small business owners is smart, simple and personal. Don’t be afraid to ask. No one else will do it for you.
Know Who You Are
Define your company culture. What kind of people do you want representing your company? What kind of people do you want to be the face of your business when you can’t be there?
Join a small business group. This is so critical for all small business owners. Be around like minded who completely understand the challenges of being a business owner. You’re also kept informed about laws and regulations that affect and impact small business. Once you find the right group the benefits are invaluable.
Gae Callaway is a small business owner and a consultant to small businesses. She works with companies from 1-100 employees. She uses gosmallbiz.com as a resource for her clients. There are two important lessons Callaway believes every small business owner should know:
- Have a power of attorney to address who’s going to take over the reins.
- Have a good relationship with banks, attorneys and consultants
Embrace Technology Smartly
Terry Drabiuk, a vocational training expert, said he sees his small business evolving over the next five years with more on-line training and meetings, and less travel. He believes companies can achieve success with being nimble with adversity by using technology.
Then, there’s Debra Hilmerson.
Hilmerson rolled out two fall protection products about 2 1/2 years ago — a safety rail system and a barrier fence system.
“In my humble opinion, the key to staying alive is being vigilant to industry needs and challenges,” she said. “Be in a position to be agile enough to be able respond quickly to meet your customer needs.”
“Cash is Cow,” she said. “Manage it precisely. Minimize overhead and be willing to do four people’s job as one if you are a sole owner. Don’t jeopardize quality or integrity, and do whatever it takes to exceed customer expectations. Don’t be afraid to ask for help from experts or mentors.”
Though many B2B companies have traditionally been slow to adopt social media tactics, the construction industry is catching up, with 75 percent of businesses present on social platforms, according to fitsmallbusiness.com. Strategic marketing and social media helps attract new customers, nurture current customers and respond to industry trends and shifts in the economy. Social media is also cost-effective, compared to other forms of advertising.
Other small business tips include:
- Be active in trade associations like Oregon’s SafeBuild Alliance, which supports, advises and educates small and large construction companies.
- Research the best ways to bill for your time. Does it make sense to bill by the hour or by the project?
- Consider finding an intern. Being a mentor to someone new in their career has many rewards.
- In some cases it may be possible to barter for goods and services. It doesn’t hurt to ask.
- Be frugal. Flashy vehicles and fancy clothes don’t mean much in the long run.
- Companies that run seasonal businesses encounter cash flow problems more frequently than others. Timing invoices and analyzing cash flow statements can help fix this problem.
