Construction Executive published an article by Partner Robert Mercado and Senior Manager Christopher Sisk, about the importance of diversifying to avoid concentrations that impact a contractor’s profitability in an economic downturn.
By Robert Mercado, Partner, Assurance Services & Christopher Sisk, Senior Manager, Assurance Services
To mitigate risk, it is vital to diversify where possible and actively manage potential concentration issues. Global economic affairs can affect economic conditions at the state and local level in the United States, so even contractors who do not operate internationally need to take steps to mitigate their risks. It is especially advisable to be alert to a single customer, supplier, or other concentration that can potentially have a dramatic effect on the survival of the business, should market conditions change.