4 Things Contractors Should Do Now to Prepare for Reopening the Economy
With cautious optimism, some states and local governments are putting plans in motion for eventually — and incrementally — reopening the economy following the COVID-19 pandemic. The process, guided by careful monitoring of coronavirus symptoms, cases, and hospital capacity, may take weeks. However, these plans offer glimpses of hope for contractors who have stalled normal operations.
While there’s still uncertainty around COVID-19 and its impact on the construction industry, contractors should begin thinking about the steps they will need to take to prepare their businesses for when the economy does reopen. By taking advantage of the time they have now, they can position their businesses for success when the economy picks back up.
Here are four critical things contractors can do now in preparation for when business returns to normal:
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1. Ramp Up Marketing Efforts
Though some construction projects have been deemed essential and therefore allowed to move forward, other projects have been put on hold. While this can be frustrating, it also provides a valuable resource that contractors often lack: time. While contractors aren’t busy with projects, they have the opportunity to ramp up the marketing efforts that so often get pushed to the bottom of the to-do list.
Use this time to focus on building and expanding your strategies for promotion, lead generation, and other marketing activities. For example:
- Build or update your website: Most people start looking for a contractor by asking friends and family for recommendations. Then, they look to those contractors’ websites for testimonials, before and after pictures of past projects, and other information to help them make a final selection. If you’ve been putting off building or updating your website, now is the perfect time to invest in that marketing tool.
- Build or launch an email campaign: If you aren’t using email to generate leads and keep in touch with past customers, you are missing opportunities to build your business. Sending out a regular newsletter to past customers can keep you top-of-mind for future projects, and a series of lead generation emails can help you build relationships that may turn into future projects.
- Establish a social media presence: Social media platforms are critical marketing opportunities for businesses. You can use social platforms to house testimonials from customers, communicate with and engage your audience, and target prospects (and job candidates) through advertising. Use this time to choose which platforms are appropriate for your business, build your profiles, and establish a social media strategy.
2. Rebuild Your Labor Force
The COVID-19 pandemic triggered layoffs and furloughs for many construction companies. In a survey of construction firms by the Associated General Contractors of America, 40 percent of respondents reported that they have furloughed or terminated construction workers.
Those terminations or furloughs were, in many cases, a response to project delays or shutdowns. In the same survey, 30 percent of firms said they had been asked by government officials to shut down construction sites, while 53 percent said their projects were delayed by owners.
Eventually, however, those projects will resume, and you will need to be equipped with a labor force to pick up where you left off. If you furloughed employees, you’ll need to communicate with them about returning to work by issuing a furlough recall letter that includes an offer of employment, a return-to-work date, and terms of employment.
However, your furloughed workers may have found alternate employment during their time away or may simply choose not to come back, so you can’t assume that your entire former staff will return. If that happens, or if you had to lay off workers from the beginning, there are many resources available to help you hire new employees.
For example, Helmets to Hardhats connects members of the military who are transitioning to civilian life with job opportunities in the construction trades. As you build your website and social media presence, you can also take advantage of your social platforms to post jobs — and even promote them with paid ads to reach a wider audience. With just a $100 budget on Facebook, for example, you can reach thousands of local candidates that meet certain prerequisites.
3. Strengthen Your Business With New Projects
When the economy reopens, you may be able to resume construction on some of your current projects, but others may be cancelled altogether — in one survey, 19 percent of firms reported that an owner had cancelled an upcoming project. So, as we move toward reopening the economy, it would benefit you to take on some additional new projects.
When bidding on new projects, make sure to keep these considerations in mind:
- Focus on quality projects: Winning more projects doesn’t start by simply bidding on every opportunity. Evaluate each opportunity to make sure you can meet the requirements of the project and that it will generate a reasonable profit.
- Anticipate rising material costs: Experts are predicting that production delays in China due to coronavirus-related factory closures will drive up material prices in the U.S. Make sure to take that into consideration when bidding on new projects, so you won’t end up going over budget.
- Ensure a reasonable construction schedule: For some time after the pandemic passes, construction may still look a bit different. To follow social distancing guidelines, you may have to stagger work shifts or allow fewer workers on site. When bidding on a project, make sure to take this into account and ensure the contract reflects a reasonable schedule.
4. Put a Financial Plan in Place
The construction industry anticipates the price of materials to rise as production delays in China impact the rest of the world. As you look forward to resuming construction projects, you also need to make sure you have a strong financial plan in place.
That will be even more important in the coming months, as experts now predict that a second, more devastating wave of the coronavirus will hit the U.S. in the fall — at the same time as the flu season.
Contractors should plan ahead with this in mind. That likely means a combination of financial planning and reviewing your contracts, in case you experience another round of project delays and cancellations in the fall. Make sure your contracts protect you from unplanned delays that are out of your control.
You may also want to reevaluate the way you purchase materials as the economy starts to reopen from COVID-19. This pandemic may change the way we operate as an industry with its impact across the whole supply chain. Planning ahead and staying in consistent communication with your suppliers and your team will create a transparent environment and set you up for success moving forward.
Billd is here to help you navigate through these changes and adjustments, as we give contractors the ability to have more time to finish projects and collect payments. This helps when you face delays and situations beyond your control. As you prepare for the future beyond the COVID-19 pandemic, Billd is here to help you establish and maintain financial flexibility and stable cash flow.
About Billd: At Billd, we provide a payment solution that enables commercial construction contractors to free up cash for material purchases while enjoying the flexibility of 120-day payment terms. You get financing for commercial materials upfront with the freedom to pay it back at your own pace. Learn more about how we can help eliminate your company’s cash-flow problems so you can win more bids and grow your business.Learn More