Or . . . Will Your Construction Business Become a Martyr to this Double-Edge Sword?
It has been six long years. Contractors all over America had found themselves sitting on the side-lines as a dismal economy ran rapid over their businesses. Big businesses swimming in an ocean of cash along with wealthy investors also sat anxiously, waiting for a rising tide of confidence and economic certainty. Ready to pounce on the best opportunity, if the right moment presents itself.
For the last four years, none of this has happened. Instead, we saw astronomical unemployment numbers as if launched from the shuttle, reaching for the stars. Big, fat, over-bloated government turning out endless pages of regulations suffocating any chance of recovery, doubling of fuel, never-ending rise in material costs, and foolish spending that ram-rod trillion dollar deficits every year of this present administration. Now, we are faced with increased taxes and no plan to stem this rising tide of economic failure.
Meanwhile, America waited.
This November could be the beginning of a bright, prosperous sunrise. A new beginning. Fresh policies, ideas and initiatives that can get America back to work. I believe we are on the edge of an emerging dawn, a change that will prove itself in the best interests for a free-enterprising America. It won’t be easy. It will take sacrifices, but it is emerging like the rising sun, ready to spread warmth and certainty over our land.
However, we can’t ignore the wrath and damage that have been inflicted upon our industry. And this is the true message for this blog.
As a business consultant to contractors, I have seen my fair share of financials and heard the stories of financial horror many have suffered. Fortunes have been withered away. Savings depleted. My message hasn’t wavered, and it is still the same. Reduce your debt and build your cash reserves. The message stays the same, and the reasoning is simple.
One major obstacle for many will be their ability to finance new work. With low or no cash to fund it, many will be forced to sit on the sidelines as an up tick in the economy gets started.
Some will foolishly cut their prices to get the work. I strongly advise those who think this is a valid approach without trimming expenses, to reconsider this action.
Money will not be freely handed around. In fact, due to the last six years, it will be coveted by those that have it. Expect some difficulty prying it from their fingers.
However, there is the other sharp edge to the double-edge sword. I can say it in one word: LABOR
With the scarcity of work, many skilled workers have left for other jobs in either other parts of the country, or in other industries. Some, actually many, have simply retired. Getting skilled or adequately train workers will prove in itself a major hurdle for many owners of construction companies.
I strongly urge those of you who recognize this upcoming problem as I have, to find a way now to stem this troubling problem. Locate resources, even work with them in training young workers to enter our industry.
No matter what you may want to think or believe, you can’t be part of a recovery if you don’t have a cash reserve and a workforce.
Take action now, because after November 6th, if a real change takes place, you may get benched.