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Danger time for businesses in construction

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Some small to medium businesses are ‘playing with fire’ by running their businesses without a credit buffer to help them through the shifting sands in 2022.  Taking these business risks during a time when credit is freely available and cheap is usually a sign of working IN the business instead of working ON the business.

Danger time for businesses in construction

By Harry Pontikis - Director, Chocolate Money

Businesses in the construction industry are entering a real danger period where demand is still sky-high from most markets including residential, commercial and public construction BUT the timelines have blown out.  

These timeline blow-outs are caused by:

  • Lengthy delays from suppliers getting stock into Australia & onto sites
  • Massive shortages of most building materials
  • Huge price hikes of materials which further erode profit margins
  • Shortage of skilled and unskilled labour causing delays on sites
  • COVID-positive cases causing further delays on sites due to staff shortages
  • Builders taking on large jobs which places cash flow pressures on their businesses and the flow on effects to contractors, suppliers and the industry in general.

These factors are putting strain on cash flows of businesses and this trend is forecast to increase exponentially this year.  This may cause profitable businesses to go broke or scale down if they can, merely to survive.

Alternatively, business owners can take advantage of these conditions by having a plan in place that details how their business will navigate through these conditions.  

Business owners should consider the following:

  • B2B businesses should deal with reputable and known businesses
  • Pricing in the higher labour and material costs when quoting new jobs
  • Have clarity as to your target market to ensure profitability
  • Implement and enforce COVID safe strategies on site
  • Ensure your personal and business financial situation is in good shape

Contact Chocolate Money to access cash flow funds to help you ride the peaks of the new year whilst money is still freely available. Master Plumber members can do a free 1-hour business strategy session. (Valued at $990 incl gst)

P: 1300 137 539 | [email protected] |
Chocolate Money – Australian Credit License - 387277

Please note: the information in this article is general in nature and not to be considered specific advice. You should consider seeking independent financial or other advice to check how this information relates to your unique circumstances.


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