With concerns surrounding inflation and growing material costs, managing cash flow is a challenge for construction businesses, particularly for small and mid-size companies. Costs remain much higher than they were five years ago, making inflation a top concern for most contractors, according to For Construction Pros. Labor costs are also rising, leaving many businesses concerned about needing to cut down on crew sizes.
To manage growing cost concerns, small and mid-size construction businesses are placing a greater emphasis on building strong client relationships. Nearly half of all small construction companies consider it a top priority in overcoming growing costs. This is especially true if costs begin to impact clients. If high costs are passed onto clients, many construction firms believe having a long-standing relationship with clients will help make sure their businesses stay afloat.
Given today’s economic uncertainties, it’s understandable to adopt a cautious approach. But relying on fear alone doesn’t predict future outcomes. While current conditions may not reflect past strength, they also don’t signal impending collapse. The economy, though not as strong as it once was, remains resilient.
Small contractors will be best served by practicing judicious spending, focusing on operational efficiency, and investing in customer service. As the saying goes: hope for the best, but prepare for the worst— a balanced approach that combines optimism with prudent foresight. Read more
