Your browser is no longer supported

For the best possible experience using our website we recommend you upgrade to the newest version of your browser.

Your browser appears to have cookies disabled. For the best experience of Construction News, please enable cookies in your browser.

Welcome to the Construction News site. As we have relaunched, you will have to sign in once now and agree for us to use cookies, so you won't need to log in each time you visit our site.
Learn more

Recession spawns new breed of construction owner

There is a new breed of construction business owner fit to survive the current recession and well into the future. By Jason Heath

According to our research, 80 per cent of those surveyed in construction sector are making or planning to make, positive steps in order to survive and face economic uncertainty head on.

Cash is king - with 57 per cent of owners and managers in the construction sector claiming the recession has encouraged them to keep a closer eye on their finances.

With seven in 10 firms experiencing difficulties in getting finance, it is easy to see why issues surrounding the management of late payment and improving cash flow top the priority list.

The figures also show flexibility is key to survival with 88 per cent of these construction owners and managers also making positive changes specifically in relation to their clients/customers and suppliers. 

Of those businesses, over half have been able to negotiate better terms with their suppliers and 65 per cent have managed to pursue new business opportunities. In addition, 37 per cent have become more open and transparent when it comes to their business plans with clients and customers alike.

However, many construction businesses are having to resort to more drastic measures when it comes to surviving the downturn. Thirty one per cent are cutting their marketing or advertising spend and 30 per cent are even going as far as to use their personal savings to ensure the existence of their business.

Furthermore 13 per cent are, sadly, scaling back on production and 28 per cent are having to bring services back in-house.

With so many businesses taking positive steps to adapt to survive, it’s clear that stronger, more experienced entrepreneurs will emerge from these tough times.

The message to those who are not taking proactive steps is that this is no time to be complacent – reviewing suppliers, finances, and in particular cash flow even now may prove vital to survival.

Even just taking a few minutes a day to look at the business in a fresh light and explore any potential new survival strategies could mean the difference between having a successful business in a year’s time or not.

Jason Heath is construction finance specialist for Bibby Financial Services

Have your say

You must sign in to make a comment

Please remember that the submission of any material is governed by our Terms and Conditions and by submitting material you confirm your agreement to these Terms and Conditions. Links may be included in your comments but HTML is not permitted.