Author Archives: David

5 Things to Do If Your Contracting Business Gets Shut Down Temporarily

Several states, California included, have shut down what they call “non-essential services” until they can get better control over the rising cases of COVID-19. Although construction is currently proceeding mostly as usual, this may not be the case next week. Dealing with a state-level or city-level shutdown presents a number of possible complications for your business. Here are five things you can do to help keep your business going, if you’re forced to cut hours or shut down for a short period of time.

Assess Status of Current Projects
It is common for contracting businesses to have several jobs going. You might be almost done with one and barely starting with another. The first thing you should do is assess where you are at with every current project. In some cases, you may be able to suspend work for a short period of time or change the nature of the project while you wait for a shutdown to end. In other cases, you might simply need to finish some paperwork, which could be easy to do remotely. There’s a high likelihood that you would have to suspend most work during a shutdown. But there may be other ways to run your business in the meantime.

Check on Your Cash Flow
One of the first rules of running a contracting business is to ensure that your cash flow is sufficient to handle temporary delays in revenue. While a shutdown due to COVID-19 might be longer than temporary, it’s possible that your cash flow may still be able to buy you some time. Invest the time to examine all of your expenses, including:

  • Payroll
  • Workspace rentals
  • Equipment
  • Supplies

If you made active orders for projects that are now on hold, you may be able to pause or cancel them until you are ready to make those orders again. Finding ways to limit what you have to pay can help ensure that you save most of your money for important things like keeping your employees on-staff.

Consider Financial Support
While the last thing that you may want to do right now is take out a loan when you’re not bringing money in, there are a variety of ways you can look at getting extra financial support while you wait for the opportunity to open business again. This might come in the form of

  • Low-interest business loans
  • Lines of credit
  • Grant programs

Take a look at federal legislation related to economic stimulus and see how the benefits for businesses may relate to yours in particular. It’s an imperfect solution, but it may help you keep the lights on.

Communicate with Clients and Lenders
In any kind of crisis, most business owners try to plan for the worst but hope for the best. This involves making sure that everybody who relates to your cash flow, from clients to lenders, is aware of what you are dealing with and how you were working to minimize problems. It might mean trying to negotiate a new timeline with a client rather than having to abandon a project altogether. It might also include talking to lenders and creditors and requesting some kind of forbearance that allows you extra time to catch up on payments while your income is lower. In most cases, you are much more likely to reach a satisfactory agreement if you talk to them before you fall into violation of the contract.

Get Updates on Limitations
While some experts are estimating that the threat posed by COVID-19 may last for months or even years, it is unlikely to lead to a long-term shutdown of the construction industry. That said, it is hard to tell when barriers to normal business function will lift. You should plan to spend some time every day looking for news as it relates to your field. This will give you the best opportunity to find out when you’ll be able to start working again.

Running a business in the middle of chaos can lead to a shutdown. With these tips, you’ll know what to do to keep your company as safe as possible. For more information about preparing for your contractor licensing exam from home, contact CSLS today!

Is Your Contracting Business Mobilizing to Assist in the COVID-19 Pandemic?

If COVID-19 has shown anything, it’s that the U.S. is quite unprepared to deal with a large number of sick people. Other countries have dealt with it by addressing faults in their infrastructure, like an insufficient number of hospital beds. And while the healthcare industry is in more need than ever now, these kinds of problems mean that construction contractors have a role to play, as well. Across the state, construction workers are getting ready to help. Here’s what is going on and how you can be a part of the solution.

Stay Updated on Current Guidelines
It may feel impossible to stay updated on the current status of rules concerning businesses in California right now. That said, you should still do everything you can to keep informed. At present, the state still classifies construction as an essential industry. This means that contracting businesses can continue to work on construction projects as long as they maintain proper attention to social distancing and sanitation practices. This may change at any time, so you will want to keep the latest information at your fingertips.

See What’s Happening in Your Area
Right now, the focus is on both containing the spread of COVID-19 and providing additional resources to the healthcare industry to treat people with the virus. Just like China was able to build a new hospital within a very short period of time, the state of California is mobilizing construction workers to expand and retrofit hospitals. This will make it easier for healthcare professionals to identify, diagnose and treat people who may have the virus. If you want more information about what you may be able to do, read local newspapers and social media posts from government officials. This may be the fastest way to get updates.

Get Ready for Action
Watching people come together from a large variety of industries to help produce personal protective equipment and ventilators is an inspiring sight. It is amazing what the population can do if they are only given a chance to use their skills and the resources that they already have. If you are already working on existing projects, it is probably best for you to continue meeting your obligations. But if your well of work seems to be running dry, looking for ways you can help may be able to make a big difference. This is a great time to network with other professionals in your area and see if you can team up to assist, even in small ways.

Take Advantage of Business Support Programs
While the focus is on businesses that are able to donate labor or supplies to battling COVID-19, many industries are also seeing significant cutbacks to their revenue streams. If you were worried about what the virus spread might do to your ability to keep your business running, one of the best things that you can do is start investigating the many local, state and federal programs recently implemented to help keep small businesses afloat. An interest-free loan or a grant may give you the ability to keep paying your bills while you protect your workers and help your community.

If All Else Fails, Minimize Harm
At the end of the day, every person has a responsibility to try to help contain the spread of COVID-19. A novel virus may cause significant damage, and it won’t be apparent how much until the vast majority of the threat has already passed. If you are unable to participate in assistance efforts related to COVID-19, your best bet may be simply to avoid increasing the risk for yourself and your employees. Focusing on what you can do to flatten the curve of rising cases and fatalities is a good effort all by itself.

The spread of COVID-19 has brought out the best in millions of people. If you want to be one of them, your contracting business may be able to help. To learn more about what the construction industry means to your local community, visit CSLS today!

 

Planning to Move Out of State? Here’s How It Affects Your Contracting Business

Construction has always been a highly regional industry. Even if you work for a national or international company with satellite offices in multiple states, you’re still focused on the building needs of the community close to home. This can really complicate things if you’re working on a certification but you’re not planning to remain in the state. Here are a few things you should do, if you’re working toward becoming a licensed contractor in California but you don’t intend to stay here to build your career.

  1. Research State Regulations
    Although there are international and federal regulations on the way you build things and the types of work you can do with a license, most rules you will have to follow are set at the state level. This means that if you move to a different state, you can expect that you will need to follow different guidelines. Well in advance of your move, you should invest the time to research the common guidelines you can expect for your particular field and the kind of services you plan to provide. This will help you avoid confusion or problems after you move and start working to set up your business.
  1. Learn About Licensing Requirements
    Every state has its own licensing requirements. Some states only require a license for certain types of services, while others may have much higher expectations. The last thing that you want is to get in trouble because you didn’t have a license when you needed one. Look into the licensing requirements for the state that you plan to go to and make sure that you understand each step. With the experience that you gained in California, you may be able to bypass some of those requirements. But there’s a good chance that you will need to take a different exam and submit an application with different requirements than what you can expect here in California.
  1. Look at Limitations for Reciprocity Agreements
    Reciprocity agreements for contractor licensing can be a wonderful benefit when they exist. For example, the state of California has reciprocal licensing agreements with:
  • Arizona
  • Louisiana
  • Nevada
  • Utah

This means that you may have a much shorter path to securing a license in these states. Make sure that you know all the details. Consider contacting the California State Licensing Board or the licensing authority for the state in which you plan to move. This will help you confirm that you understand your responsibilities and the best way to use this benefit.

  1. Talk to People Who Have Moved
    With a state the size of California, it’s not difficult to find people who have moved from California to another state in the country. If you have the opportunity, talk to people in your field who moved from California to the state you plan to go to. It might be worth checking out a construction conference in that area to meet people and network. This will help you get a better sense for what the workload is like to establish a business in that state, as well as what you can expect to find in your field as a whole.
  1. Consider Regional Supply and Service Differences
    A lot of your focus may be on how you can meet the requirements needed to provide services in your chosen state. It’s also worth finding out about regional differences in supply chains and services. For example, you may find that inland states take longer to get supplies that require international shipments, especially those made by boat. You might also discover that the demand for your services is significantly different in another region than it is in California. This might be a benefit for you, if there are more people who need skilled workers in your field in that state. But it might also change the way that you offer services, so it’s good to have a plan in advance.

California is a great place to live, but it’s also a good place to get your construction education for a career somewhere else. To find out how you can become a licensed contractor, visit CSLS today!