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Success Happens on the Other Side of Fear 

When we know our business is struggling, it is so uncomfortable to acknowledge. Wouldn't it be nice if we could just look the other way and not have to pay attention? While that might work when things go "bump" in the night, closing our eyes and looking the other direction doesn't prevent a project or business from failure. 

In fact, it makes bad outcomes even more likely, especially in the construction industry. And construction companies already lose momentum at a higher rate than other businesses. Construction Business Owner reports a 14% failure rate in the construction industry, compared to 12% across all industries. Construction companies that have been in business one year or less have nearly a 37% failure rate.

Should this scare you away from starting your own construction business? Absolutely not. 

But it should scare you into facing the signs and symptoms of business failure head on as a business owner. Because learning and adapting are the only ways to survive. 

Why Do Subcontractors Fail?

Expanding Too Fast: Especially for a growing subcontractor, there is an appeal to bid on every available job. But taking all the work that comes your way might cause you to overstep your capabilities or compromise your delicate balance of cash flow. Paying for labor and materials can add up with every job. It's best to focus on projects that challenge you to grow, but that you also know you can handle and execute with excellence. 

Cash Flow: In construction, the general contractor pays their subcontractors only when they get paid. This means cash flow issues trickle down the line. It's not uncommon to have invoices three or four months past-due. But, that doesn't mean subcontractors don't have to pay for labor, materials, and other expenses during that time. 

Low Profit Margins: I wrote last week about how bad financial decisions can inspire increasingly worse decisions, and in my experience this is a contributor to low profit margins. Desperation to get the work can lead you to underbid and compromise on the bottom line. Being selective and taking on work that will comfortably pay the bills is the best way to grow a business. 

I created my course, Effective Tools for a Successful Contractor, based on over 20 years of success managing construction projects. I developed a curriculum around these tools to share with construction managers, subcontractors, and business owners, to help you succeed through adversity without suffering all the hard lessons. 

Read more in our latest blog about how each module of the course is specifically tailored to address these challenges and provide lessons and tools to help you overcome. 
Effective Tools for a Successful Contractor

Signs of Construction Business Failure

Here are some signs that you might need my course to help address looming business failures:
  • Operating in crisis mode
  • Accepting less than full value for change orders at job completion
  • Increased employee turnover
  • Increased claims, complaints, or lawsuits
  • Increased use of vendor financing to cover expenses
  • Denial of surety bonds
  • Accounts receivable aging issues
  • Insufficient profits to meet needs
  • Poor internal controls
  • Lack of leadership or management
  • Inadequate recordkeeping
If you have questions about how the specific implications of any of these challenges for your business, I would be happy to talk with you about the situation and how my insights could help you address them and turn the tide. 
Construction is not an easy industry to succeed. But the work of transforming our communities for the better is worth the effort. Through job creation, beautifying and modernizing our neighborhoods, and creating a sustainable reality for future generations, construction professionals change the world. 

If you are interested in getting into construction, I encourage you to visit to learn about opportunities to work and train in the basics at the same time. The set of skills to succeed in construction will serve you in high-paying, fulfilling, secure work for a lifetime, and with the right understanding you can even start your own business. I am here to help however I can. 

Akilah Darden
The Darden Group LLC would love your feedback on experiences with our business. Please leave a review for us on Google!
Copyright © 2021 The Darden Group, LLC, All rights reserved.

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