Top 6 Difficulties Construction Businesses Face

Share this content

The construction business has been booming for a couple of years now and the trend is probably going to continue in the years to come as well. This usually happens when the economy is improving overall and people are planning for their long-term future.

However, this doesn’t mean that running a construction business doesn’t have its difficulties. The changes in the labor force and in the technology related to this industry are complicating the business. There are also more demanding customers who care about the environmental impact of construction projects as much as they care about their cost.

[[{"fid":"13156","view_mode":"content_full_width","fields":{"format":"content_full_width","field_image_accreditation[und][0][value]":"","field_file_image_alt_text[und][0][value]":"construction-workers"},"type":"media","field_deltas":{"1":{"format":"content_full_width","field_image_accreditation[und][0][value]":"","field_file_image_alt_text[und][0][value]":"construction-workers"}},"attributes":{"alt":"construction-workers","class":"media-element file-content-full-width","data-delta":"1"}}]]

Material cost

Construction businesses depend on the condition of many other industries beyond their control. This is most noticeable in the cost of raw materials and land. When these costs change, so do the construction prices. Both materials and land are usually becoming more expensive because there’s a shortage of them, but land prices could also go down depending on the location.

The worst, however, isn’t the rising prices, but their instability. When you don’t know how much the materials will cost next year, you can’t make any long-term plans or investments.

Skilled labor

Skilled labor is essential for any business, and there are few fields where this is as true as it is in construction. Skilled workers allow the contractors to finish the job faster and, more importantly, to finish it safely. This saves money in the long run even though hiring highly skilled workers usually costs more.

The main problem is obviously that they are hard to find. It takes time to train a construction worker, so there are only two ways to go about this. You can attract highly skilled workers with high salaries and bonuses, or you can train them yourself and invest time and money in their progress.

Additional costs

Each construction project comes with unexpected costs that new companies aren’t prepared for. They also have the hardest time dealing with additional costs, because every one of them can affect the bottom line of a small business. For instance, in order to avoid delays and material losses that often happen in construction projects, you need to look into getting a construction bond. These are often mandated by the local government.

Paying for one isn’t just a bureaucratic requirement; they also protect both the customer and the business in case something unforeseen happens on the construction site.

Adopting technology

The construction business is very much dependent on the adoption of new technology. The job can’t be done without it, and it’s also imperative to stay on top of the changes and not let your competitors offer services that you aren’t ready for.

However, this also comes with a price because adopting new technology isn’t always easy. It requires you to constantly invest in your business and buy new equipment. It’s also a challenge for the employees who need to be trained to use the new machinery and to apply new measures in terms of safety and productivity.

Slow payments

There are always a lot of businesses involved in the construction project. Each of them needs to be paid and to pay its employees. All of this seems pretty straightforward, but it can cause massive problems in terms of organization. If even one company in the chain is late with their bills, the whole project needs to be delayed or even stopped entirely.

This is just something that construction businesses need to factor in. You can use invoicing services that allow you to get the money you’re owed right away, but that means that you need to deal with the cost of using those services as well.

Environmental issues

Construction can be very damaging to the environment. The materials used in construction are in high demand and they aren’t going to be around for long. Construction projects themselves require a lot of fuel and therefore have a large carbon footprint. It’s one of the biggest concerns for young homeowners, since they want their homes to represent their political and cultural values.

Construction companies need to start addressing these issues. It will attract a new demographic of customers, but it also goes beyond that. Making your company eco-friendly means you’re doing something good for the world and it even helps you save money in the long run.

There are numerous difficulties construction businesses face. Companies need to start preparing for them right away if they want to succeed in such a competitive market.

About NateVickery

Nate Vickery

Nate M. Vickery is a business consultant from Sydney, Australia. He has a degree in marketing and almost a decade of experience in company management through latest technology trends.


Please login or register to join the discussion.

There are currently no replies, be the first to post a reply.