0384: A Guide To Construction Business Recovery In The Pandemic World

This Podcast Is Episode Number 0384, And It's About A Guide To Construction Business Recovery In The Pandemic World As you well know, the COVID-19 pandemic is not just a public health issue; it's also caused lock-downs and resulting financial worries on a global scale.   Almost all business sectors have experienced declining profits, liquidity that is drying out, and even bankruptcy. Although the short-term outlook varies depending on your industry sector, all business leaders need to set up a strategy to guide their way towards recovery.    Nevertheless, the rough and tumble world of construction company ownership is not for the weak or the timid. It is an arena where the admission price is a lot of blood, sweat, tears, and long nights and lost sleep, with peaks of enthusiasm and depths of despair.   If you want some tips on hitting the ground running after the crisis, this guide will outline the steps to get your business back on track.  Assess The Damage Before taking any action, the first thing you need to do is to assess the financial impacts the pandemic has had on your business. You can determine the effect by checking your key numbers. Take a look at your financial statements, especially the profit and loss or cash flow statements, and compare the data to the previous year. If you have any questions about the financial side, please feel free to ask us. Besides knowing and understanding your numbers, you also need to be mindful of any other ways your business has been adversely affected. You have to account for factors such as reducing your workforce and customer churn when preparing a plan to rebuild. Rethinking Your Business Plan What may have worked for your business before COVID-19, may not deliver the same results in the current climate, or the post-pandemic world. Now is a good time to fine-tune your business model and think about how you can pivot and adapt. For example, some people may remain cautious about going to physical stores even if lock-downs are easing. That means you could consider strengthening your online presence and digital capabilities to accommodate customers who prefer communicating with you virtually (phone call or video meeting). You'll also find many useful resources online, including free webinars and other tools you can use to address coronavirus-specific challenges. We'd also suggest you chat with your trusted business advisor for more focused and personalized guidance. As you rebuild your business, you need to pay attention to trends in the construction industry as a whole and try to spot untapped opportunities. Be aware of your business' strong and weak points and adjust accordingly.  As the coronavirus seems to have flipped the business world on its head, it might also be time for you to revisit the goals you've set to make sure that they are still feasible, given the current market conditions. After setting realistic goals, you will need to adjust your action plan to achieve those goals. Additional Funding For Your Recovery Unless you had a large amount of cash before the pandemic started, you might likely need some additional financial support to jump-start your business. You can consider many funding options for small businesses, including government-backed business loans, wage subsidies, grants, and other support schemes.  Assess Your Budget As we come out of the pandemic, expect that you will have to spend money before making money. For instance, if you had to lay off employees when the coronavirus hit, you may have to spend money on hiring and training new employees if you can't rehire the people that you had to let go. You might also need to prepare for additional spending on cleaning, inventory, and marketing post-pandemic. Whatever your additional costs are, the key is to have a clear idea of the necessary spending that you need to budget for and which ones can be reduced or eliminated to make the most of the revenue that is coming in. As much as possible, keep your operating budget lean so that you can invest in future growth opportunities. Develop A Timeline As much as you want to get all business matters sorted out at once, this is far from realistic. Try to take stock of where everything is up to and decide what to prioritize. From there, create a timeline that you will follow to get your most important business activities done first. While you accomplish the steps in your action plan, make sure that you're tracking your progress. If possible, do a weekly check of what's working and what's not, and then make the necessary tweaks. Don't waste time and resources on business activities that are not producing a solid return on investment. As your construction business starts to return to normal, you might transition to reviewing your financials monthly. Prepare A Contingency Plan  The COVID-19 crisis is a wake-up call that shows us unexpected events such as this can disrupt your small business at any time. Learn from this experience and prepare a contingency plan that will cushion your business from possible future shocks. Aside from thinking outside the box and having a Plan B (and even a Plan C, D, and E) that will help you prepare for the worst, improve your position in tough times by building up your cash reserves, paying down your debt, cutting down on non-essential spending, and increasing operational efficiency by streamlining processes and boosting your employees' productivity. Leading Your Business Towards Recovery While COVID-19 has affected nearly every person and business in some way, you should take into your own hands the task of finding the light at the end of the tunnel. To cope with the changes and find your way to the so-called "New Normal," you must be agile enough to step up your game and confront the business challenges now and in the uncertain times ahead.  Final thoughts While you prepare to get your construction business back to full speed, it also helps to have a business expert to guide you in rethinking your business strategy and rebuilding your business into a more resilient one. If you need personalized advice about your specific situation, get in touch with us to work out a plan.   About The Author: Sharie DeHart, QPA is the co-founder of Business Consulting And Accounting in Lynnwood, Washington. She is the leading expert in managing outsourced construction bookkeeping and accounting services companies and cash management accounting for small construction companies across the USA. She encourages Contractors and Construction Company Owners to stay current on their tax obligations and offers insights on how to manage the remaining cash flow to operate and grow their construction company sales and profits so they can put more money in the bank. Call 1-800-361-1770 or [email protected]