Recent figures from PricewaterhouseCoopers (PWC) showed the number of construction companies falling into insolvency has risen 35% since last year. Construction workloads declined at their fastest pace since 1995 breaking more than 11 years of uninterrupted growth according to the latest report from the Royal Institute of Chartered Surveyors (RICS).
Leading industry body the National Federation of Builders (NFB) is encouraging small and medium sized companies to take stock of their business now to help protect against the effects of a downturn.
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An NFB spokesperson said: "In a recessionary climate, small and medium sized companies are often the most at risk. But their size makes them ideally placed to steer their business through any storm. There are a number simple but effective measures they can put in place to help win new business, stay profitable and increase their chances of survival."
The NFB has produced the following advice for SMEs in the wake of the credit crunch:
In the current climate cash is king maintaining strong cash flow will best ensure your survival. It is essential that your customers adhere to strict payment conditions outlined in writing from the beginning. NFB members can access letter templates created by legal professionals to help chase late payments.
Before competing for new work make sure you perform due diligence on your potential customers in the same way they do on you. The small cost of a credit check could save you thousands down the line.
Investing in training may seem counterintuitive when costs are rising, but a well-equipped workforce could provide a vital competitive edge as the market for new work shrinks. A series of expert led training courses and business improvement services are available to NFB members.
(CD/NS)
