The UK is in the middle of a major cost of living crisis with inflation hitting a 40-year high. This has had a significant impact on businesses of all sizes but is particularly challenging for construction companies.
The construction industry is labour-intensive and the cost of living crisis has made it tricky for companies to attract and retain staff. Add this to the rising cost of materials, it puts a strain on businesses, their profits and on the people who run them.
Here are seven tips to help you help your construction company weather the storm.
1. Review your expenses
Look carefully at your business expenses and see if there are any areas where you can cut back. For example, negotiating better deals with suppliers, reducing unnecessary spending or reducing waste.
2. Increase prices
Think about whether you’re able to put your prices up to offset rising costs. However, be careful not to put them up too much or you could lose customers who are also feeling the pinch.
3. Look for new revenue streams
Think about how you can generate new revenue, like expanding into new markets, launching new products or services or partnering with other companies to offer more services to more customers.
4. Get help from the Government
Have a look at government-funded programmes designed to help businesses struggling with the cost of living crisis. They can provide financial assistance, tax breaks and other resources that may have a few helpful tips that could end up transforming your business’s fortunes.
5. Build up your cash reserves
A healthy cash reserve gives you a cushion to fall back on if your revenue takes a hit so try and work out how you might be able to give yourself a buffer you can turn to in tougher times.
6. Negotiate with creditors
Don’t be afraid to talk to and re-negotiate with your suppliers and agree on new payment plans that are beneficial for your business as well as theirs.
7. Get help from a business advisor
A business adviser can help you develop a plan to weather any storm and come out stronger on the other side.
Here are a few more short but sweet tips specifically for construction businesses:
- Focus on efficiency: identify ways to streamline operations and reduce waste, like using more efficient materials, equipment and processes.
- Invest in technology: new technologies can help improve efficiency, productivity and safety.
- Partner with other companies: collaborating with others shares resources and expertise, helping to save money and improve your bottom line.
- Stay up-to-date with industry trends: the construction industry is constantly evolving so it’s important to keep up with the latest trends. This will lead to better decisions and help you give your customers what they want and word will soon spread.
You’ve worked hard to build your business, so we’re here to help you protect it from the ups and downs of the UK’s economy, and the cost of living crisis. For more help and advice, take a look at our collection of construction-related articles.