What’s your biggest challenge on your construction projects? Contractors big and small seem to face the same problems on project after project. Whether you are a one-man painting contractor, a small remodel business, or a general contractor with 20-years of industry experience, these construction problems have most likely plagued you at one time or another.
Here are the answers you’ve been looking for on the ten biggest problems facing construction professionals today.
1. Lack of Skilled Workers
There is a big problem facing the construction industry: not enough skilled workers to fill a growing demand. The younger generation is being pushed toward college, and not vocational trades. The benefits of a career in construction are not being sold to millennials, and much of today’s existing workforce is closing in on retirement.
While industry experts try to tackle this problem on a national level, there are things you can do as a contractor and/or a small business owner to help.
- Be a Mentor: During summer months, high school students and recent college grads are looking for work. Be willing to introduce your industry to someone who may not have considered construction as a career. Mentorship also works for existing skilled labor; if one of your best workers has showed an interest in the business side of construction, you can mentor an already skilled worker on the ins and outs of construction project management or construction business ownership.
- Use a Staffing Agency: Construction staffing agencies can have skilled workers ready to work for you when you need them. The agencies take care of pre-screening applicants, which saves you time and gets you qualified workers quickly. Usually a staffing agency will also cover any HR costs with employment, including any workers compensation coverage for those employees.
2. Lack of Communication
When things go wrong on a project, it is almost always due to a communication breakdown along the way. Technology is the answer to your communication problems. Two-thirds of Americans own smartphones, so there is a good chance that almost everyone on your project has one. Using email, text messages, and construction technology apps on a project can get information instantaneously to all people on the project in real time and reduce the slowdowns and speed bumps of a communication breakdown.
3. Unreliable Subcontractors
Many contractors have problems finding reliable subs for their jobs. If you are in a pinch and need to find a sub, check with the materials suppliers and vendors that you work with regularly. They will have the inside scoop, and may have a great recommendation for a sub. You can also ask other subcontractors that you have worked with for a recommendation, too. Always check a sub’s licenses, make sure they carry general liability insurance, and list your company as additional insured on their insurance before you hire them.
Scheduling can be tricky for even the most seasoned construction professional. Once again, construction technology is providing a solution for this common problem. Project management apps that you can access from a desktop or your smartphone or tablet allow you to visually map out a project timeline. Many apps allow for a “sticky-note” style virtual board that allows you to easily see what needs to be completed, and gives real-time project status updates.
5. High Insurance Costs
Contractor insurance is part of the cost of doing business, but that doesn’t mean you have to overpay for it. You can get lower rates on your contractor insurance by combining coverage, not letting your coverage lapse, and reviewing your policies each year for changes that may save you money.
6. Changing Minds of Homeowners
Homeowners who want changes in the middle of a project may “forget” about the requests they’ve made when it comes time to pay the bill. In order to protect yourself, your reputation, and your bottom line; be sure that you get a signed change order every single time.
7. Available Cash
You have payments due to subs, employees, vendors, materials suppliers, and equipment renters… but you don’t get paid until the project is complete. And unless you have enough available cash flow, this can be a major problem. Have an open business line of credit to see you through the tough spots between bills due and project’s end, and you won’t have to see your credit (or reputation) suffer.
8. Document Management
Contracts, change orders, materials orders, receipts, invoices, employment applications, certificates of insurance… you probably have enough paper to fill an entire trailer of filing cabinets. It’s time to go paperless. A digital solution can help you stay on track of documents, organized on your projects, and on-time with your payments. At the very least, scan all documents into your computer and digitally file/ organize them. Be sure to backup your computer to a cloud service or hard drive regularly in case you have a hardware issue.
9. The Blame Game
Nothing ever goes smoothly in construction 100% of the time. When there is a bump in the road, fingers start pointing. The general contractor blames the sub, the homeowner blames the general contractor, the project manager blames the owner. When a worst-case scenario actually occurs, skip the blame game and finger pointing and get back on track with a builders risk policy. This type of specialized property insurance covers the project, and all of the principles working on it. Extreme weather, natural disasters, even theft and vandalism can all be situations where a course of construction policy can get you back to work without finger pointing and burnt bridges.
Did the owner change their mind on materials after they were installed? Or decided they didn’t like the work after it was done and are claiming you didn’t fulfill your contract? Carrying a liability policy with Faulty Workmanship Coverage can protect you from coming out of pocket for those new materials. The right coverage eliminates the Blame Game, keeping your clients happy and your bottom-line covered.
10. Ever-changing Regulations
Federal, state, county, and even city regulations are constantly being changed and updated. How are you supposed to stay on top of everything? Follow blogs and industry publications to get the latest updates on changing regulations that affect your business. Sign up for newsletters, and have new blog posts automatically emailed to you. Prevent inbox clutter by having these industry-specific emails sent to a specific folder in your inbox. Then, set aside 10-15 minutes each day when you can catch-up on everything you need to know to stay compliant.