CoatingsPro Magazine

NOV 2018

CoatingsPro offers an in-depth look at coatings based on case studies, successful business operation, new products, industry news, and the safe and profitable use of coatings and equipment.

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20 NOVEMBER 2018 COATINGSPROMAG.COM 3. Growing too big too fast. Another reason why many construction businesses do not succeed is that they attempt to expand before the business is actually ready. Regarding a business, growth may translate to more profit, but it always means more capital, stress on the work force, and stress on the processes. Larger buildings, more equipment, and more employees cost money and require more structure. A push for growth made before the company is fully prepared can result in the failure of the business. 4. Not enough profit. Especially in the construction industry, low bidding may seem necessary to get work and beat out the competition; however, the company still needs to make a profit. One of the reasons that only about 35 percent of new construc- tion companies last beyond five years is that the other 65 percent have too low of a profit margin to stay afloat. Bottom line: Outbidding the competition may be a win in the short term, but it could be a killer at the end. Any bid should consider the credit risk of getting fully paid for the work done. Is the bid sufficiently high so that if the owner only pays 90 percent of the invoiced amount there will still be a profit? Another reason why some construction businesses may go under is that the owner stretches him/herself too thinly. Trying to wear all the hats in a small business, especially in the construction industry, can keep the business owner from being thorough at any one task, let alone all of them. Putting the decimal in the wrong place or forgetting to send contracts to a client can have a detrimental domino e‹ect on the business. Risky Business Getting a new business o‹ the ground in the construction industry can be risky. Œe successful companies with staying power have stayed above water because of e‹ective and comprehensive planning that includes knowing when and how to take on more work. Œe idea is certainly to grow the business but to do it wisely and slowly. Unlike other industries that seem to thrive on taking chances and betting big, the mantra for a new construction business should be "slow and steady has a better chance to win the race." CP T C is t he president and genera l counsel of t he on l ine business f i l ing company Sw y f t Fi l ings and Counsel w it h t he law f ir m of Gray Reed & McGraw, LLP in Houston, Te x as. Sw y f t Fi l ings has helped for m and ma inta in tens of t housand s of companies in a l l 50 states w it h a l l of t heir f i l ing and compl iance need s. Crabt ree's law pract ice focuses on assist ing star t-up and technolog y companies w it h a l l of t heir lega l need s. For more infor mat ion, contact: Sw y f t Fi l ings and Counci l , w w w.sw y f tf i l ings.com Tr ying to wear all the hats in a small business, especially in the construction industr y, can keep the business owner from being thorough at any one task, let alone all of them. Money Matters Environmentally Safe VpCI ® /MCI ® Technologies EXCELLENCE Q U A I T Y ® C O R P O R AT I O N Re ad e r In qui r y at co ati n g sp ro m a g.co m /i n q1118

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