The construction industry is one of the UK’s foundational industries, and today accounts for 6% of national employment. It is an extremely lucrative industry in which to start a business, but not one immune from hardship. Indeed, running a successful construction company requires you to navigate numerous challenges and risks.
This is especially true today, with a volatile economy making for a difficult environment in which to grow a business. Even established businesses are struggling, with investment and expenditure plummeting alongside the value of the pound. As a construction business, what are some key signs that your business might be on the back foot?
While some signs of a struggling business are much subtler than others, there are nonetheless some glaring factors when it comes to the failure or difficulty of a given construction firm. One such factor is a significant decline in profits in comparison with previous years, being a clear indication of hardship unique to a given accounting period.
Various factors contribute to declines in profits; increased costs, inefficient project management, poor accounting and even pressure from competitors can impact profit margins heavily. As such, a careful approach to managing your accounts can help identify declining profits and prompt corrective actions.
Safety should always be the top priority of a construction business. If a contracting firm experiences a series of safety incidents, this is a clear warning sign that safety protocols may be inadequate – or otherwise not being followed by workers.
As well as performing regular risk assessments on work sites, firms need to provide adequate PPE, such as appropriate work jackets, hi-vis clothing and equipment, and protective gear. Training is also a vital aspect of any health and safety program.
Construction businesses rely on the skills and motivation of their workforce. Persistent low morale among employees can result in decreased productivity and compromised quality of work – altogether leading to project delays, poor outcomes and unsatisfied clients.
Poor communication, lack of employee recognition, and inadequate training can all contribute to low morale amongst on-site staff. Addressing these issues through transparent communication, employee engagement initiatives, and investment in site equipment can each do their part to help improve morale.
Deteriorating Reputation and Increasing Client Complaints:
In the construction business, reputation is crucial to the success of an individual business. The market can be saturated at times, and contracts are hard-won as a result. Securing new projects and maintaining client trust all the while can be tough, particularly for smaller businesses.
A sudden increase in client complaints, or an uptick in negative online reviews following projects, are clear-cut signs that a business is not performing at its best. Low morale is one potential cause, but other causes include poor management and poor client communication. Altogether, this can lead to a deteriorating reputation within the industry. Client satisfaction needs to be a priority concern for executive sales staff; addressing concerns promptly, and consistently delivering high-quality work, can help restore a positive reputation.