Southeast Partner-in-Charge Michael Balter advises construction contractors to proceed cautiously in his article, "Bad Ideas in Good Times," for Construction Business Owner magazine.
Construction Business Owners
By Michael Balter, Southeast Partner-in-Charge
Now that the economy finally appears to be headed in the right direction, many contractors are thinking about hiring talent, acquiring bonding and raising capital to help complete their growing backlogs. Many of those business owners with large backlogs are taking an optimistic view that the new construction economy is half full and are quickly forgetting the lessons of the recent past. For contractors showing over-exuberance in this current market, the following list includes some of the top mistakes that can lead to contractor failure, even in an expanding economy.
1. Growing too fast
Growing backlogs are generally a positive indicator. However, it is important to recognize how growth will impact other areas of your business. Often, growing too quickly creates problems with cash flow, lack of talent and communication strains due to everyone being so busy. Focus on growing profits and plan for potential pitfalls.