Author Archives: David

What Does Contractor Confidence Mean for Your Contracting Business?

When you read about consumer or business confidence, it feels like it could mean a variety of things. What does it mean to be confident in a particular aspect of the economy? How does this data change the way that you make decisions for your contracting business? And what if people turn out to be wrong? With this information, you’ll understand what confidence means in finance and how it may affect your contracting business.

What Is Confidence?
If confidence feels like a somewhat nebulous standard of measurement, that’s because it is. Confidence is the way that people feel about themselves or some aspect of their world. It is not always an indicator of the way things actually are. However, finance experts use confidence as a way of determining what may happen in the future. People make decisions based on the confidence they have in certain aspects of the economy. For example, contractors look at their existing and expected sales and profit margins as a way of determining how confident they are in their own fields for the next several months or longer. It’s not a certain way of predicting the future, but it helps complete a more robust picture.

What’s the Difference Between Consumer, Investor and Contractor Confidence?
Now that you have a general idea of what contractor confidence means, you should know that there are indexes meant to measure confidence in other aspects of the economy. For example, you may read about increases in investor confidence in a thriving stock market, or decreases in consumer confidence based on rising housing prices. While you must keep in mind that confidence is highly subjective and heavily dependent on specific measurements, it can still give you an idea of what people plan to do with their own money. Specifically, if confidence in the economy starts to drop, you’ll notice that people will become more reserved in the types of financial risks they are willing to take.

How Does Confidence Affect Your Business Right Now?
At the moment, contractors are reporting lower levels of confidence in their ability to continue to grow sales and keep their profit margins high for the near future. As a business owner, you can imagine what those kinds of concerns may do for the way that you run your business. If you’re worried that you won’t be able to get enough sales this year, you might limit your overhead as much as you can. You may decide against hiring more workers, and if the trend continues, you may have to consider laying people off. This can affect the way that your business runs. That might mean that you have a simpler workflow, or it could mean that you have fewer services you can offer and more limited selection of projects.

How Can Low Contractor Confidence Change the Construction Industry?
Confidence in one aspect of the economy can change on a dime, but it depends heavily on the pivot point. Once people are worried about the future of their contracting businesses, they may make decisions that affect their ability to continue the business long-term. If these changes happen at the same time as lenders tighten loan requirements, or at the same time that a lot of other industries are noticing a drop in sales, there may be broader effects. Ultimately, part of rebuilding the economy after an economic downturn or recession lies in establishing confidence once again. After the last recession, it took a few years before the construction industry was able to run at levels even close to where they were before the housing crisis.

Contractor confidence may not mean a lot to you yet, but it poses serious long-term effects to your contracting business success. For more information about starting on a construction career path, visit CSLS today!

What Happens When Your Contracting Field Is Headed Toward Automation

Although it feels like construction is going through a lot of changes toward streamlining processes and automation, it really takes many years to drastically alter the function of the industry. You can probably think of many fields that used to include a lot of long work by hand that are now easily done by a machine, in some cases without the careful attention of an expert operator. At present, some jobs may eventually be replaced as a result of automation. Here’s what to watch for, and what you can do once you see the writing on the wall.

Watch Innovations in Similar Industries
Since construction tends to be an industry that adopts technology relatively late, it’s important to keep an eye on what is happening in other similar industries. You can also keep track of the trends in your field in other parts of the country, or in the world as a whole. For example, a burst of development in autonomous equipment in the mining industry made adaptation for the construction industry much quicker. These developments aren’t necessarily a bad thing, especially since so many of these jobs currently go unfilled. But if you want to know what’s going to happen to your job in the next 10-20 years, you should pay close attention to people who do similar types of work as you in different parts of the economy.

Keep Track of Automation-Heavy Fields
Although automation is starting to happen in nearly every aspect of the industry, there are certain fields that are in the process of big improvements right now. Professional trades like:

  • Carpentry
  • Plumbing
  • Electrical

could have as many as half of their existing jobs automated within the next 30-40 years. That seems pretty far out at this point, but it’s not likely to happen overnight. If you’re planning on going into one of these fields, you may want to pay attention to what experts believe the job forecasts will look like in the next 10 years.

Avoid Knee-Jerk Reactions
When you start to think that your job may be rendered unnecessary, it is tempting to stick your head in the sand and pretend that it won’t happen to you. But this is possibly the worst choice you could make. In industries with rapid development like information technology, people can see their jobs become obsolete within a couple of years. By comparison, you probably have some time to prepare. And if you take that opportunity, you have a much higher chance of remaining relevant.

Study the Latest Techniques
The fact is the technology cannot replace the entire construction industry. There will still be a need for lots of skilled workers who can operate or monitor machinery that produces structures. If you want to have one of those jobs, you need to know how to do these things. Innovations are developing on a regular basis, and what might be a standard practice now could be extremely outdated five years from now. Paying attention to these developments, testing out new techniques whenever you have the chance, and considering adopting them into your business practices gives you the best chance at beating the competition.

Consider Changing Fields
If ever there was a case for expanding your educational opportunities, a change in the construction industry would be it. The last thing that you need is to find yourself stuck in a niche part of your field where you will struggle to diversify your services. Instead, be flexible enough that you can change your business model if it becomes clear that your field can’t sustain the number of workers in it right now. Adding an extra classification to your license or teaming up with someone in another field to provide a more complete service package are a couple of ways you could consider doing this.

Discovering that your intended career is likely to be automated in a few decades isn’t ideal. Making a plan now can help you figure out how to make your business work for the future. To begin on your construction career path, contact CSLS today!

 

Hidden Project Inefficiencies Your Contracting Business Should Consider

Since COVID-19 is changing lots of industries, it may be an ideal time to rethink your processes. You’ll be spending more time on certain aspects of your workflow, while others may have to go out the window entirely. But you don’t want to go back to a pattern of overpromising and under-delivering, even if that’s common in the industry. Here are a few inefficiencies you should consider, so that your project timelines can remain accurate now and in the future.

Finding Workers
Just this spring, the construction industry in the United States laid off nearly 1,000,000 workers. It’s hard to tell at this time exactly how that will affect your ability to find skilled employees and subcontractors for your project. But since construction was already facing a labor shortage, you can expect that whatever you need someone to do, it will probably take longer to locate them. People in busy, expert fields will likely continue to have high demand for their services. As such, you may not know for sure how long it will take to secure someone’s work until you have already done so. Be sure to research averages if you don’t have a regular subcontractor for a particular task.

Moving Equipment
The time it takes to move equipment to and from the jobsite depends on:

  • Where it’s currently located
  • How big it is
  • What it takes to get it there

Some tools are easy for you to transport, while others may require a rental company to handle delivery. Keep in mind that pandemic-related closures may cause delays in your ability to rent equipment or have it delivered to a particular jobsite. You also may have to wait to pick something up, if you are handling the delivery on your own. This will add extra time to your project delivery schedule.

Waiting on Tasks
If there was any industry that could figure out how to get work done more quickly just by adding more people, construction would be it. However, there are certain tasks that simply take a specified amount of time no matter how much you want to rush it. In a new era of staggered shifts and social distancing, you may spend more time waiting for tasks to be completed in order to move to the next step of the project. Identifying which jobs can be done at the same time, and which ones must be done in a certain order, can help you figure out how to stagger shifts for the best productivity.

Site Cleanup
For a lot of jobsites, clean up and sanitation is something that happened a couple of times a week. Now, it will almost certainly need to take much more time. This is because virus prevention requires careful sanitation at least daily, if not more frequently. Forming regular habits of clearing a particular spot of debris and sanitizing the equipment can help to make the process more efficient. But if you have to do it between tasks, you should factor that delay into your daily schedule.

Paperwork
It is usually good to have more than one person looking at agreements before you commit to them. If you are working on a public works project, it may be a requirement. This can add weeks or even a month or more to your project, depending on what paperwork you need reviewed and who needs to look at it. Although technological innovations have come a long way to make this process shorter and more efficient, you will still encounter plenty of delays in this respect. For example, the time it takes to get certain types of building permits has increased significantly in 2020. You’ll also notice a longer delay for inspectors. Keep tabs on the average wait times and don’t underestimate, so that you can factor them into your bids.

The year 2020 sure is changing the way people in construction think about efficiency. With the right education, you’ll know how to help solve those problems for your contracting business. To get started, visit CSLS today!

How Your Contracting Business Can Persuade Employees to Wear Masks

The best way to avoid contracting or spreading COVID-19 is to wear a mask when you leave your home. That’s why almost all states have guidelines on the books recommending or requiring them. But since you can’t do all your work from home, eventually you and your employees will have to go back to the jobsite. In many cases, that means you’ll need to persuade them to wear masks. Here’s what you can do.

Stay Updated on PPE Guidelines
The one constant right now is change, which means that you will need to stay updated on the current best practices. At present, until a vaccine is both available and widely used, wearing a mask and practicing social distancing on the jobsite is likely to be recommended if not required. Remember that requirements may be implemented at the state level or by the city. This means that you should plan to follow whichever rules are the strictest. In some states, inspectors are showing up unannounced and fining companies that do not comply with local regulations.

Identify Acceptable Masks
There have been many innovations in masks that people can wear with in the last few months. This doesn’t mean that all of them have the same level of protection. As a general rule, N95 masks are the best tools to avoid spreading contagion like COVID-19. But in many parts of the country, N95 masks have been prohibitively expensive or completely unavailable. This means that you may have to use something else. Keep in mind that any mask that has an open space or a mesh screen to improve air circulation is unlikely to provide nearly as much protection.

Talk to Employees About Common Problems
Ultimately, people are going to have a variety of reasons that they do not want to wear a mask. If you live in a part of California that becomes extremely hot during the summer, wearing a mask all day may be more difficult than if you live and work near the coast. Some people have common breathing conditions that can make wearing a mask regularly difficult to manage. But you won’t know which problems your employees are having until you ask them. Give workers the opportunity to speak frankly about their concerns, and make a note of them. Be sure to avoid dismissing anything out of hand, because it’s better to find a solution instead.

Look for Solutions
There isn’t going to be a solution for every single problem people have related to wearing masks. The fact of the matter is that most people aren’t accustomed to wearing them on a regular basis, especially not at work. But you know that it is something that can be done, so it’s time to research new approaches. People in industries like manufacturing or healthcare may have to wear masks all day long, every day. Research how these people manage to do it to get ideas. Consider options like:

  • Ties instead of elastics
  • Ear-savers that hook onto elastic loops
  • Disposable masks for people working in hot weather
  • A variety of mask styles, so people can choose which ones work for them

Giving your employees choices may make it easier for them to commit to wearing them.

Be Consistent
As with any work safety policy, you can only expect a high degree of compliance if you can be consistent about enforcing it. For example, you wouldn’t criticize employees for failing to wear personal protective gear that you did not provide for them. Similarly, you need to recognize that if they are unsure when you expect them to wear masks, they may follow their own instincts. Set a policy for mask usage that is clear, publicly available and easy to review on the jobsite. These steps will help to ensure that people know what is expected of them and that you will enforce the policy if they don’t follow it.

Wearing masks is part of a new normal, but it’s also a common part of practicing jobsite safety. For more information about starting your own contracting business, contact CSLS today!

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!

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!