In the UK, around 50% of new companies will fail within the first twelve months of trading. That figure rises even higher for firms launching themselves into the construction industry. With that in mind, this post will highlight some of the reasons for that situation. Hopefully, the information will encourage those with ambitions in the building world to avoid the same mistakes people have made in the past. Those who fail to consider the points raised in this article are doomed to suffer the same fate as around 60% of new building ventures in the UK today. So, pay attention!
1. Failure to Employ Reliable Contractors
In most instances, construction companies don’t tend to offer permanent contracts to their workers. Indeed, most builders are self-employed, and that’s excellent news for the business owner. Using contractors means the company doesn’t have to worry about paying tax on employee earnings. It also means there is no need for the employer to offer sickness or holiday pay. The issue is that a lot of self-employed construction workers are less than reliable. All new firms need to work hard to impress their clients and complete jobs to the highest of standards. That’s difficult if half the team fail to turn up due to feeling hungover.
2. Failure to Purchase Appropriate Protection
There is no getting away from the fact that people who work on construction sites face many risks and dangers. That is why all bosses must invest in the correct insurance policies ahead of time. It’s possible to get construction cover from specialists without breaking the bank if people learn to shop around. Still, there are many different types of insurance, and so the list below should help entrepreneurs to ensure they’ve covered all the bases:
> Public Liability
> Tools Insurance
> Financial Loss
> Employer’s Liability
> Professional Indemnity
If the policies people purchase include all those elements, there should be no reason for concern.
3. Failure to Network with Suitable Firms
Lots of construction businesses fail because the owners never manage to secure enough contracts. That often happens when the entrepreneur has to spend a lot of time working inside the company. Instead, the individual should employ others to perform manual tasks, so they have more time to focus on networking and growth. There are many trade shows around the UK each year that could provide lots of opportunities to meet the right business people. So, research them and book some tickets. Bosses might also consider:
> Cold calling development firms
> Bidding for public building contracts
> Securing long term contracts
Those three points should go part of the way towards explaining why so many construction companies fail within the first twelve months. Anyone who plans to join that market this year just needs to learn from those mistakes. Break the cycle, and try to develop a strategy that will create high profits for many years. The UK government plans to invest heavily in building work during the next Parliament. So, now is the best time to set the wheels in motion and prepare for the frenzy!