Monthly Archives: June 2020

What Your Contracting Business Needs to Know About Changes to the PPP Loan Program

The wildly popular Paycheck Protection Program (PPP), funded and administered by the federal government, is starting to evolve. At first, employers had to prove that they used the vast majority of the loan for payroll, or risk losing the ability to apply for loan forgiveness. Now, the federal government has relaxed these standards somewhat, after learning that almost one in five businesses wanted to give the funds back. Here’s a rundown of the changes, and how they affect your contracting business.

What Are the Changes to the PPP?
The original Paycheck Protection Program allowed businesses to apply for loans of up to $10 million with an immediate advance of up to $10,000. The advance itself would not have to be repaid, and companies that met certain requirements would be able to apply for loan forgiveness. These terms made the loan program so popular that business owners were struggling to find lenders who hadn’t been inundated with applications. To make the program more accessible to businesses making long-term plans, the federal government made the following changes:

  • Up to 60 percent spending on payroll still eligible for loan forgiveness
  • Loan period extended from two to five years
  • Relaxed verification process for businesses borrowing less than $2 million

Although the program originally opened in April, these changes were approved in early June.

Why Did the Federal Government Change the Program?
The point of the PPP was to give businesses the ability to keep employees on their payroll, instead of having to furlough them or lay off a certain number of people. In the implementation of the program, however, many businesses realized that the program wasn’t as practical as they had hoped. Many companies were hoping to apply for loan forgiveness, and the process for it wasn’t entirely clear. As a result, almost one in five construction-related companies were considering returning the loans, out of worry that they would face an audit or lose the ability to have the loan forgiven.

Have the Loan Forgiveness Rules Changed?
Congress approved amendments that would change the minimum spent on payroll to be eligible for loan forgiveness from 75 percent to 60 percent. They also outlined the conditions under which they would audit the company’s use of the loan and application for loan forgiveness. Generally speaking, they said that if a business took out a loan of less than $2 million and made a good faith effort to meet the requirements for loan forgiveness, their applications wouldn’t be processed as carefully as those who requested more.

How Does More Flexibility Help Contractors?
When this loan program was initially proposed, the idea was to help people struggling in a temporary period of economic distress. A few months into the pandemic, people are realizing that this situation is anything but short-term. This means that expecting businesses to have a quick turnaround on repayment may be unrealistic or even impossible. Adding flexibility to the program gives contractors a better chance at meeting the terms required for loan forgiveness. If that makes them more likely to take the loan, it can provide additional cash flow to support them during periods where work is limited due to COVID-19 in the area.

Is the PPP Still Available?
The availability of this loan program could change at any time, and it’s not clear whether the federal government may extend the program beyond its initial end date of June 30. Many business owners have said that it is difficult to find a lender who will process the applications, although that is heavily region-specific. At present, however, the program is still in existence. Business owners who think they may benefit from it would need to apply as soon as possible.

Protecting your cash flow is an important part of managing your contracting business. To learn about everything you need to get started, visit CSLS today!

What’s Behind Construction’s Rebound in May?

The construction industry lost almost 1 million jobs in April. Then, the industry added hundreds of thousands of new jobs in May. The numbers are still down from a year ago, but the change indicates several reasons to be optimistic about the future. Here’s a look at how the industry’s dynamic has changed throughout Spring 2020.

This Year’s Numbers
In April 2020, about 6.6 million people were employed in construction. By May 2020, that number had risen significantly to a little more than 7 million. This growth over one month happened in all sectors, like building, specialties, engineering, etc. Residential construction in particular added the most jobs, proportionally as well as the total number of new jobs. This shows a dramatic increase from earlier in the spring, although the current numbers still lag behind the same period a year ago.

Percentage Change from Last Year
As much as there is reason to be optimistic about the change from April to May, it’s worth keeping in mind that there has been a dropoff from last year. To be specific, the industry as a whole is down about 430,000 jobs when you compare May 2020 to May 2019. This may not necessarily be due entirely to COVID-19, however. There were reports in late 2019 indicating that the wave of new construction starts was beginning to slow down. Given that the industry has been running full-tilt since about 2012, that may be a natural correction.

Temporary Furloughs or Layoffs
If having nearly 500,000 jobs emerge out of the woodwork in a single month seems suspicious to you, it’s not a wrong feeling to have. It’s worth analyzing where those jobs came from. After all, replacing one job with another isn’t always the same as replacing one orange with another orange. In this case, many of the jobs lost and the increase might be easily explained by temporary furloughs or layoffs. The Paycheck Protection Program was designed to make it easier for companies in fields like construction to bring their workers back to the payroll, even if they were still working under heavy restrictions or unable to do business at all. Use of this program would allow business owners to rehire employees in May that they had laid off in April.

Rate of Re-Opening
Industry experts were expecting construction to rebound to some degree, but they may not have predicted the speed at which it seems have happened. This may be a result of the rate or re-opening in certain areas. Many parts of the country, California included, put significant limits on operations in most industries. This was intended to slow or prevent the spread of COVID-19. But as the months passed and numbers stayed constant or dropped, many states have decided to re-open their services. Although some states have chosen to lay low until they get more information, others are almost back to business as usual. While this may pose possible risks for the spread of COVID-19, it could easily account for the increasing demand for construction workers.

Project Backlogs
When something happens to your area while you are in the middle of a project, the project doesn’t just go away. Although many projects that were still in the planning stages were pulled or renegotiated due to COVID-19, there were many others that were too far into development to quit. Most businesses operate at some level of backlog as a way to protect their cash flow. While the backlog of projects for the industry has decreased since last year, it hasn’t evaporated entirely. As such, contracting businesses still need qualified workers to help complete these projects. With a long-term labor shortage, this may mean that companies have had to bring in new workers to get the job done.

Construction is a busy industry with a lot of demand, even in the midst of a pandemic. To start building a career that can last a lifetime, contact CSLS today!


Are Virtual Conferences Useful for Your Contracting Business?

Going to construction conferences used to be an opportunity to get away from your normal workflow and network, while learning about the latest practices and trying out new tools. Now that large gatherings present a much higher risk, many event organizers have shifted to virtual conferences. Here’s what to expect, and how to decide if they’re worth the investment.

Create a List of Goals
When you run your own business, everything that falls under the heading of professional development has to make the biggest bang for your buck. This means that if you’re going to invest time and money into a conference, you want to make sure that the conference is the best one to meet your needs. With a variety of virtual conferences available, you’re no longer obligated to spend money on travel or compare hotel prices in expensive cities. But you still want to get a good return on your investment. Keep these factors in mind:

  • Networking
  • Classes
  • Discounts on products
  • Demonstrations

If you know what you’re looking to achieve from a conference, it will be easier to figure out which ones are the best for you.

Look at the Lineup
In order to see if a conference could be a good fit for you, you’re going to need to look at the focus of the conference as well as the opportunities included. COVID-19 has certainly thrown a wrench into many conference organizers’ plans. But since a lot of organizations have shifted to virtual this year, you shouldn’t lose out too much due to cancellations or rebooking. There are conferences that emphasize a variety of specific aspects in construction, including:

  • Sustainable building
  • Technology
  • Management

Once you’ve narrow down the list, take a look at their lineup of talks or demonstrations. You need several options that are interesting or relevant to your field to make the whole conference a sensible choice.

Consider Opportunities to Try Out New Tools
Virtual conferences can be a tricky thing to navigate in an industry like construction, simply because you don’t get that hands-on experience. Watching a demonstration isn’t quite the same as getting a chance to try it out yourself. However, there have been lots of recent innovations in technology built for use on the construction site. You may be able to test out some of these tools within the context of a virtual conference. If you’re not sure which software to choose or how to decide, this could be a good way to get more information.

Evaluate Networking Options
Building a network of people in your area that you can collaborate with related to your field is an important part of attending a conference. If you’re not getting the chance to meet with people in person, there should be other opportunities to network. Not everyone is adept at having conversations with people they don’t know in an online format, and conference organizers should be aware of this. Be ready to look for opportunities to talk shop with other conference attendees, as well as presenters and sponsors.

Compare Costs
When you’re first starting out with your contracting business, the cost of a conference may affect your ability to attend one or not. In this case, comparing costs and benefits can help you make a final decision. Many conferences that were scheduled for the spring and early summer were pushed back to the fall, in the hopes that they could hold those conferences in person. But many others have chosen to stick to a virtual format. This may result in a much lower cost for registration, since the conference organizers aren’t having to pay to rent conference space or hire additional services. Cheaper isn’t necessarily better, but if you can find one that checks all the boxes and doesn’t cost a fortune, you’ll have made a more practical investment.

Virtual conferences are just one more way you can learn how to grow your contracting business. To get started on a rewarding career path in construction, contact CSLS today!

How Will the Pandemic Create New Construction Technologies?

There’s no doubt that COVID-19 has changed the way that many industries think about communication and productivity. In the construction industry, companies are relying on technology more than before. But what happens in six months or a year? Will you be prepared for a second wave? Industry influencers are looking for innovations in these areas, to minimize risk and keep projects moving on schedule.

Safe Entry
Right now, when incident rates of COVID-19 are still high and increasing in certain parts of the country, trying to prevent sick people from entering the jobsite is one of the most important goals. However, this has led a lot of businesses and property owners to have to invest a lot of time evaluating each person before they enter the site. This leads to lost hours and lower productivity. Software and tools that could quickly scan a person’s temperature as they walked in could dramatically speed up this process without increasing risk.

Working together in a time of social distancing and remote work takes on a completely different meaning. You still need to know the status of certain aspects of the project, even if the person who is doing the work is at a different part of the site or possibly in a completely different location. Collaboration tools that work in real-time make it easier for you to quickly assess where people are with a particular task. Communication tools simplify the process of asking questions and getting clarification without having to leave an app and move to another one.

Remote Monitoring
Construction is such a hands-on industry that the idea of remote monitoring may feel a little foreign. But the more that companies have access to tools and analytics that allow this, the better that contracting businesses can protect themselves and their employees while still maintaining a high level of productivity. Remote monitoring can provide a number of benefits, including:

  • Health updates on employees, such as heart rate or temperature
  • Safety
  • Progress on a particular task
  • Proximity to other workers

These elements have a lot of potential in a post COVID-19 world, as well.

Incident and Data Tracking
Municipal and state organizations are getting better at tracking the way that a single incidence of COVID-19 can spread through an area, but it’s still slow. Companies currently rely on contact tracing to discover where a particular case may have originated and how it might spread through the jobsite. They may have to wait weeks to get useful information. Instead, improvements to incident and data tracking may make it easier for businesses to accumulate data on interactions. That way, if someone who works on a large jobsite ends up testing positive for a contagious illness like COVID-19, they will have a resource to help them. It can simplify the process of finding out who else this person came into contact with, and which areas need extra sanitation as a result.

If you look back at the wave of influenza that passed through the country a century ago, you’ll notice a wide variety of technological improvements that came as a result. This pandemic is likely to make some big changes, so you’ll want to be aware of what they are and how they can help you. The right education is key. To discover what it takes to become a licensed contractor and run your own business, visit CSLS today!


How to Keep Your Contracting Business Running When Experts Aren’t Clear Where the Industry Is Going

Construction is going to slow down. Until experts say that they were actually wrong about their estimations. It’s hard to build and grow a business on shifting sands, and an election year can be a particularly tricky time to do so. Everyone’s waiting to see what happens and then a bunch of people in high-ranking positions may make hasty decisions based on the results. If you have a successful contracting business, you’ll be dealing with this on a regular basis. Here’s how you can make sure that you can weather these storms, even when you don’t know the forecast.

Follow Politics and Legislation
It’s easy to want to separate what is going on in politics because only a portion of it actually trickles down to your business. But you have a stake in the game, no matter what your personal positions happen to be. For example, if the fed raises interest rates, you may notice a cooling of the housing market. This could make a big difference in the way you run your business, particularly if you work in residential construction. Sudden changes to trade laws may affect your supply chain or the prices you pay. Even targeted state legislation like AB-5 is proving to have sweeping effects in a variety of industries, including construction. If you keep your eyes and your ears open for news, at least you won’t be surprised when a bill passes and becomes law.

Diversify Skills and Services
It’s hard to know where the best place to go next will be, especially when experts are trying to predict how the ground will move. When you’re first starting out, you don’t know where you will be next year, much less five years from now. As a way to hedge your bets, you may want to continue developing your skills so that you can offer a wider variety of services. You don’t want to be so spread out that all of your skills are too basic to be in demand, but you also want to avoid specializing too much. Finding the right balance between being an expert in your field and being able to keep your options open will help you pay the bills no matter where the demand is.

Pay Attention to Industry Changes
Watching the industry is just as important as paying attention to politics. Although they often go hand in hand, it’s hard to be sure how broad decisions will affect your business. See what happens to material and labor prices. Follow rises and dips in demand. Have alternatives for your supply chain or subcontractors. Keep in mind that politics changes all the time, and that the industry itself is much older.

Your own understanding of the current situation and flexibility gives you a higher chance of long-term success. Consider the border wall. There’s been a growing market for development on this project in California not long after the idea was introduced. But if the White House changes hands in 2021, these projects may be stalled or abandoned outright.

Practice Risk Management
In a big election year, you’ll often see people hedging their bets. If you’re trying to establish your business, you’ll need to take risks, but you should do it carefully. Investors might hesitate to start large projects when they don’t know what will happen to material prices or the market as a whole. This may lead people to conclude that demand in the construction industry is slowing when it really is the calm before a storm.

To keep your head, you should practice risk management in all of your processes. Minimizing waste and cutting down on the likelihood of failures keeps your business on a sure footing. It also makes you less likely to make reactionary decisions based on the results of an election.

When everyone else is caught off-guard by a big storm, you want to be the one who read the forecast. By paying attention to what’s going on around you, in the industry as well as in politics, you have a better chance of keeping your business afloat for what lies ahead. To discover the benefits of owning your own contracting business, visit CSLS today!

Risks and Rewards for Residential Construction

The last few years have put a big emphasis on commercial construction. Urban renewal in areas like Los Angeles opened up billions of dollars in projects on the docket for years into the future. But residential construction still has a long way to go before housing exceeds demand in the state. If you’re thinking about getting into residential construction, here are the risks and rewards you should consider.

California’s Housing Needs
If you had to put a label on the need for new housing in California, it might be something like “stressed and pressed.” Governor Gavin Newsom campaigned on the idea that he would fight to build 3.5 million homes by 2025. Well, it’s 2020, and that is five years away. He argued that California could have a population as high as 50 million by 2050. And while that seems like a long time to go, the pressure to build new housing is already here.

For construction professionals looking into residential development, demand is not the biggest arbiter of their success. There is so much demand that you may have a ton of options to consider. Access to skilled workers and the ability for people to afford the housing that is built makes a more significant difference in how it works out for your contracting business.

Fluctuations in Demand
If you want a sense for how variable the market can be for residential development, just read a few newspapers from the past year. In the summer of 2019, experts were proclaiming that housing was down far below 2018 levels. They hinted that the market was just starting to slow down as people have predicted would happen nationwide. But then in the fall, applications for housing permits positively exploded, blowing away the previous year’s numbers. Demand in construction tends to fluctuate by season, but this is a completely different situation. Residential construction companies have to be able to meet the demand when it comes. This might be cyclical or a constant onslaught.

Varying Housing Types
Part of the reason that housing development seems to be shifting is that it is. With a lot of cities that are already built-up, housing can only go in two directions: up or out. Out is proving to be trickier to manage, with the kind of urban sprawl that makes housing difficult to manage. No one wants Eureka to become a bedroom community for San Francisco. This leaves up. And sure enough, the dramatic increase in housing permits came mostly for multifamily units. This means that if you’re looking to specialize in single family homes, you may want to rethink that idea. By comparison, getting into multifamily housing may be an excellent consideration for long-term viability.

Housing Market Pressure
Of course, there’s what builders want to do, what property owners want to do, and what people can afford. This, plus the general trends of the housing market as a whole, creates a unique set of complications that can spur or stymie the market where you live. Right now, housing prices continue to rise virtually unchecked in many parts of the state. This means that there may be housing available, but most people can’t afford to buy it.

If you live in a particularly expensive region or you’re looking to specialize in luxury homes, you have to keep a close eye on the market. If housing prices plummet, demand for developments in certain areas may also decrease. Affordable housing always has a market, but what counts as affordable changes by the year. Researching these concerns may help you determine the best part of the state for you to establish your business.

The industry for residential housing in California is big but somewhat underprepared to meet demand. If you want to take advantage of the push for housing that people can afford in the state, now’s a great time to get started. Visit CSLS today to find out how you can begin the path to your own contracting business!

How Are Pandemic Layoffs Affecting Construction’s Labor Shortage?

When COVID-19 first started to wreak havoc in the United States, many companies made the difficult decision to close up shop or suspend operations. In some states, they were required to do so by law. But now that many regions are starting to open up again, contracting businesses are discovering a new problem. Construction has long had a labor shortage, but now it’s even harder to find people to do the work. Here are a few ways you can help ensure that when you start a new project, you’ll have a better chance of hiring the skilled workers you need.

Keep Tabs on the Employment Numbers
When you look at employment numbers as a whole, you should note that a job isn’t the same as another job. For example, if the United States lost 3 million jobs in one week and added 6 million jobs the next week, that doesn’t mean that the previous 3 million people got their jobs back. In fact, it also includes things like temporary labor which usually pays less and has lower stability than regular full-time jobs. Pay attention not just to the numbers, but what kinds of jobs are lost and which ones are becoming available. This will help you to determine which areas of the industry may be the most difficult to fill in the coming months.

Research the Fields with the Greatest Shortages
The thing about construction’s labor shortage is that it’s variable. This means that some fields have had a significant flow of retiring workers, while other fields have remained fairly stable. This is specific to certain types of jobs, but also regional shortages. That’s why you may occasionally read about workers in the US heading to other parts of the world to help with project backlogs, and vice versa. Figure out which jobs are the hardest to fill in your area. If you haven’t chosen a specialty yet, this might be a useful opportunity to think about future career options.

Plan Ahead for Delays
You probably already know that what used to take a few weeks will now take longer. In fact, lots of people weren’t good at estimating a project timeline to begin with, so now the numbers are really off. If you plan for delays well in advance, that will give you extra time to ensure that you can find skilled workers for every task. Add padding wherever you need it and make sure to schedule difficult jobs in advance.

Verify Financing Before Signing Contracts
The high cost of land for housing and commercial projects in California has long made construction a slightly riskier investment. There’s a chance that a builder, developer or property owner may have an idea but lack the funding to support it. The last thing that you want is to get halfway through a project and realize that the entity that hired you to do the work no longer has the money to pay you. This underscores the importance of vetting clients’ ability to pay before you sign contracts. Unlike many types of public projects, private construction may not have access to guaranteed funding. You’ll want to ensure that they have a high likelihood of getting the financing they need before you start.

Consider Publicly-Funded Projects
A handful of advocacy groups within the construction industry have recommended that state and federal governments consider using construction projects as a way to support the economy throughout 2020 and in the years to come. After all, if a recession causes a significant decrease in new construction starts, then it’s possible that millions of jobs will be lost like at the beginning of the housing crisis. It’s hard to anticipate how governments will respond. But it’s worth keeping in mind that projects with public funding may be more stable than private jobs. This isn’t always the case, but budgets set in advance and a certain degree of public transparency can make it easier for you to determine which public projects are more likely to be safe.

A labor shortage means that you may have an easier time building a career, although you’ll need to make the right choice. To get started, contact CSLS today!

Is COVID-19 Still a Risk at Your Contracting Business Jobsites?

Experts believe that while the first wave of COVID-19 is starting to ebb in many regions, the threat may be around for much longer. If you are headed back to the jobsite, you should know that the virus is still a concern, and not just because people are afraid of contracting it. Here are several ways you can assess your jobsite’s risk and plan to minimize them.

Watch for Regional Spikes in Cases
The number of COVID-19 cases in your local area is most likely to serve as an indicator of what you can expect for yourself and your business. Since you’ve probably been watching this information for months, it’s tempting to let your research fall to the wayside under the assumption that you’ll hear about it if there’s a significant spike in cases. However, the way that people have been inundated with information about COVID-19 may make it easier to tune out such news. Set a reminder to take a look at the numbers of new cases in your area at least once a week. Pay attention to other figures like the number of people who were tested. This will help you determine if a major resurgence is on its way.

Look at the Most Likely Areas for Transmission
There are certain areas of each jobsite where people are more likely to congregate. They typically center around access points, break areas and practical facilities. In some cases, you can set limits on the number of people who can be there at any given time. However, the last thing that you want to do is to start micromanaging people’s use of the bathroom. If you cannot reasonably control who is in a particular space at a particular moment, then you may want to increase the number of facilities or increase the level of sanitation. For example, if you find that there seems to be a long line at a particular handwashing station, you can add a second one several feet away. This will cut down on wasted time and minimize social contact.

Identify Busiest Times in the Schedule
Staggering work times may be one of the best ways to manage risk. This doesn’t mean that you have to have people working onsite 24 hours a day. Staggering the times that people begin and end their shifts by as little as 30-60 minutes may dramatically decrease the risk of transmission, if you can otherwise minimize contact throughout the workday. Make sure that everyone on the jobsite understands the guidelines and can commit to following them. If you’re trying to stagger lunch breaks but workers don’t comply, you still have a higher risk situation.

Avoid Dismissing Reports of Illness
By this point, you have probably seen or interacted with dozens of people who told you that some obvious symptoms they have is an indicator of another illness. For example, you might have someone say that they are sick, but it is just allergies or a cold. Since COVID-19 symptoms can present differently among people, and it’s not always easy to figure out the cause, this may be an indicator for further investigation. Above all, try to avoid developing a habit of encouraging employees to dismiss mild illness. Many cases of COVID-19 have had minor symptoms. This means that someone who does not appear to be particularly ill could possibly make others very ill.

Make a Plan for Necessary Site Visitors
As a business owner, it’s not reasonable to dictate what people do while they are not working. You can make recommendations about what workers can do for their own safety and out of their colleagues. You can also set rules for the types of visitors who are allowed at the jobsite and how they must conduct a visit. For example, you may need to hire inspectors throughout a particular project to ensure that the work meets certain guidelines. When they arrive, you can request that they follow OSHA guidelines to minimize transmission of diseases. This may include things like wearing personal protective equipment or washing their hands when they arrive.

Managing risk is just another day as a contracting business owner. To start building your business, visit CSLS today!


How to Structure the Workday for Your Contracting Business

If you do most of your work outside, it makes sense to try to stick to the sun when planning out your regular work schedule. During the summer, this is fairly easy to do. Once winter hits, it’s harder to make enough time in the day with the hours of daylight. Throw in employees who need to battle rush hour and other scheduling concerns, and you might need to completely rethink it. Here’s a few ways you can approach scheduling your workday in your business, so that everyone can get their work done with the least hassle.

Understand Flexible Scheduling
If the concept of “flex time” feels like something more suited to a tech startup, it might need a little clarification. Many people believe that keeping a flexible schedule means that you never know when someone is going to show up or leave. In reality, offering a flexible schedule to your employees usually requires a clearly-defined schedule. That way, everyone knows when they’re supposed to be at work. Giving people the flexibility to determine if they need to show up early so they can leave early can make it easier for them to maintain a work-life balance.

Determine Your Priorities
Before you start changing the schedule, you want to set a few priorities. After all, you may be flexible enough to allow some of your employees to burn the midnight oil. Your customers, on the other hand, might expect communication during normal business hours. Start with the things you need to keep your business going, like sending invoices, following up on sales leads or submitting bids. Make sure you have someone on the clock at the right time who can be responsible for the most crucial daily tasks, even if it comes at the start or end of their shift.

Rethink Your Existing Schedule
If you’re thinking, “My schedule is already flexible because I am literally always here,” it might be time to rethink how you approach your own workday. Burnout is a big deal in construction, in part because people tend to work such long hours. But 15-hour days for weeks on end aren’t a very good long-term strategy, especially for people who have obligations outside of work. Taking this as an opportunity to improve efficiency might be an ideal path to getting the same amount of work done without running yourself into the ground.

Consider Different Scheduling Options
If you’ve ever done shift work, you know that this is a standard in a variety of industries. There’s the day shift, the swing shift that starts in the afternoon and the graveyard shift running overnight. When you’ve got a big push to get a project done and you’re working some long hours, building in two separate shifts for your employees can allow you to stay on schedule. Otherwise, you might consider operating a 12-hour workday where people are expected to show up at a specific time during that interval. Just make sure that your workflow permits having one skilled worker showing up later or earlier than another.

Evaluate How You Attract New Employees
With a labor shortage, you’ve always got to think about how you bring people on and keep them for the long-term. Offering a flexible schedule might be an effective way to entice students or others with limited time to get on board early. Give yourself some time to work out the details, so you don’t have to change the schedule on a whim if it’s not working. In the long run, giving your employees flexibility could open up different demographics of workers who might never have considered your business beforehand.

Keeping a business running is a lot of work, but sometimes tweaking the schedule makes a big difference. These tips can help, as well as a solid grounding in the construction field. To start your career, visit CSLS today!

When to Say No to Projects for Your Contracting Business

In an industry that is dictated largely by season and often unpredictable, it’s hard to imagine a time when you’d ever want to decline bidding on a project. However, there are cases when you might get in over your head on a project that has major flaws. When you’re first starting out, you don’t want to be too selective in the kind of work you’ll do related to your business. But there are definitely a handful of red flags you should watch for so you know when to pass. Here’s what they are, and how you can decline projects professionally.

Client Doesn’t Know What They Want
Sometimes, you may get a client who could be good, but they’re too far up the sales funnel. Many people start reaching out to contractors before they have a fully-developed sense of what they want from the project. This can be a problem if you try to push them to commit to details too early. They may decide that they want something smaller, or fail to have the budget necessary for the project they have in mind. Instead, give them a few resources they can use to ideate and get a sense for the total cost, as well as your contact information.

Client Won’t Commit to a Bid or Estimate
There’s a reason everyone in business recommends getting the details in writing. Without them, it’s just your word against your client’s. Clients who push away the idea of a signed contract in favor of a verbal conversation can create big issues for the project. They may fail to understand the details and therefore underestimate costs. They may deliberately confuse the issue in an attempt to get you to do more work than you agreed to do. They could even expect you to change the project halfway through. Make it a regular process to get a signed contract before you start doing any work.

You’re Unsure if the Client Can Pay
Making sure the client can pay applies to big and small projects. When you’re working with property owners who have little experience in construction, get a firm number on their budget before you start planning. If your bid is coming near the top, make sure you put enough in your estimate to cover all costs. Clients may not be able to pay more than their listed budget, and you might have to fight to get what’s owed. For larger projects, ask for evidence that they have the funds to pay you at the right times. If they can’t, tell them that you’ll be willing to start work once they can prove they have funds in place.

Client Asks for Unreasonable or Illegal Terms
There’s a difference between making a stretch to meet the client’s terms and completely blowing away all your boundaries. You want to set a clear threshold between these two so you don’t end up in a situation you can’t manage. Some clients want a rush job that simply can’t be done in the time allotted. Others may ask you to skip getting permits or other required items to save money or time. These requests are not just unrealistic–they also put you at risk. Explain that your processes include adherence to local guidelines, and that you can’t change them without risking liability.

Trust Your Gut Instincts
When you’re trying to get established or you’re stuck in the middle of a slow season, it’s tempting to take any work for the sake of income. But there are instances in which the work is going to cost you more in effort and frustration than the benefit of payment. If the red flags are piling up and every instinct tells you to decline, it’s often best to respect it. Sticking to reasonable business operations will help preserve your abilities for the next project.

Running your own contracting business involves learning when to take new projects, and when to let them go. It begins with a solid grounding in the rules and standards of the construction industry. To start your education, visit CSLS today!