Written by Tom Streek, Owner & Founder of Rebuild Response®.
Construction will always have history to support the awareness of corrections and downturns in the market. However, did you know that it’s possible to recession-proof your contracting business?
For various reasons, commercial and residential projects will meet a change in demand, which causes us, contractors, to consider our risk exposure and how we mitigate that liability while generating growth.
Capital and cash flow are the main arteries of our core businesses, but maintaining it is like ensuring our “blood pressure” is always managed to support a healthy system.
A recession or economic downturn will attack most business models’ core, so a strong awareness of proactive protection measures is critical.
The following areas of construction project availability to bid on will resist a correction in the market:
- Housing and basic need repairs/rebuilds/new builds,
- Essential service commercial repairs/rebuilds/new builds, and
- Maintenance of residential/commercial essential structures.
Aligning with opportunities or the avenues by which this work presents itself is crucial to consider.
Our Rebuild Response® builders appreciate and value the emphasis put on “recession proofing” when they see added stability and long-term job security.
If an exit strategy is a possibility in the future, establishing this deeper level of “hedging” will provide added value and attraction to a proposed buyer.
In summary, apart from establishing and maintaining a strong liquid capital position, with virtually zero debt, adding a revenue source that resists any negative economic impact is a vital element to reinforce any business model out there!
Are you a contractor wanting to learn more about our opportunity to recession-proof your business? Contact us today to discuss the possibility of partnering together.