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