A natural disaster can put your whole life at risk. For business owners, there is even more to worry about and prepare for. A natural disaster like Hurricane Harvey in Houston, or the recent wildfires of California can lay ruin to your company.
You may think it would never happen to you, but one in three small business owners have been impacted by a natural disaster at some point or another. And worse yet, researchers at the Institute for Business and Home Safety found that one in four small businesses never reopen after they are impacted by a natural disaster.
Here are a few basic ways to protect your business in case disaster strikes:
1. Insurance. Insurance. Insurance.
Especially in the commercial construction sector, it can feel like you need insurance for everything. But consider that on average, a small business loses $3,000 per day once they close due to a major storm. How long could you stay afloat in a situation like that? Disaster Insurance, Business Owner’s Policies (BOP), or Business Interruption Insurance can be the key to saving your business if the worst happens.
When purchasing insurance for new equipment or for your business property, be sure to ask and understand what is covered and what isn’t in case of a disaster. Take some time to reach out to your current insurance provider to ask: “If my area gets hit with a natural disaster like a hurricane, flood, tornado, earthquake or wildfire, am I covered?” Then make sure the language in your contract is consistent with the answer you receive. This will allow you to be aware of any gaps in your insurance coverage so that you can fill them with additional insurance or set up your own funding methods to protect those assets.
2. Invest in a generator.
One relatively easy way to get your business back up and running after a disaster is to have a generator. After all, just because the grid is down doesn’t mean your office should be. Most businesses can’t operate for long without computer access. In case of a longer-term outage, your team will need access to things like overhead lights, power outlets, printers and a working coffee machine. According to one study, just 29% of small business owners have made the investment.
This is one item you should never buy just before an approaching disaster, since you likely won’t be able to find one anyway, and if you do you’ll probably pay double or triple for it. Plan ahead and do you research while the skies are clear. Find the right generator for you needs and purchase it as soon as you can. Another option is to make sure your employees have the tools and access they need to work remotely.
3. Secure key documents.
What documents does your business need to operate? If all of your work history, contracts, insurance agreements, Rolodex, employee and company information is saved in a file on your office computer, or locked away in a filing cabinet in your office, you need a backup.
This can be in the form of a storage company that can store your physical documents, like Iron Mountain—just make sure the facility is at least 50 miles away—or data centers for your electronic files with a company like Flexential.
4. Develop a thorough plan, and communicate it.
If a storm is coming or your job site is at risk of a natural disaster, ensure you are on the same page as the property owner or general contractor. Know when you would tell your employees to go home and make preparations or what to do in case your area is evacuated. In those cases, how should your team handle any equipment, materials or supplies at the job site? Who is responsible for taking and storing photographs of the site before a storm or natural disaster hits?
In areas where there is risk of tornadoes, flash floods or fast-moving wildfires, you should have a set plan in place for your employees to protect themselves on the job site.
In addition to the owner or GC, if your work schedule is interrupted by a natural disaster, you will likely need to contact vendors, suppliers, subs, your bank or lending partners. Be straightforward if this may impact your ability to make a payment on time or your ability to pick up a delivery. Honesty, initiative and responsiveness go a long way in these instances.
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Commercial construction bidding can be a stressful and frustrating process. It takes time, energy, and doesn’t always pan out in your favor. But, sitting out the race also means turning your back on tremendous growth opportunities. Here are some common mistakes contractors should avoid when bidding on new projects.
You aren’t qualified
That doesn’t mean you aren’t CAPABLE of the work, but it does mean you will need to put in extra effort to show a General Contractor that you understand the full scope of this project, and how your previous expertise will inform your execution strategy.
You don’t have the relationship
Construction is all about relationships. If you are trying to land your first big job, it pays to invest extra time and energy into building a relationship with the General Contractor. Let them know you are willing to work on smaller, additional projects on the site, or to collaborate on any problems that occur. Be a person they can turn to in a pinch, and eventually you will be the person they turn to for opportunities, too.
Casting too wide a net
Look for the best opportunities for your business and focus on your strengths. It’s better to focus on jobs that you are confident and comfortable in rather than trying to overexert your company’s capabilities. Over time, this will allow you to find the sweet spot with your bids.
Pro Tip: ConstructConnect has a searchable database that can help you find actively bidding commercial construction projects in your area.
Waiting for the bid to be announced
Business owners should always be on the hunt for new job opportunities. Talk to your General Contractor or reach out to contacts in your network. Ask if they know of any future jobs that could be good leads for your company, and if they’d be willing to put in a word for you once the bid is submitted. This will help narrow and improve your bid and project pipeline.
Wasting time on “iffy” projects
Drawing up a bid proposal can be grueling process, so be sure to regularly evaluate the quality of the potential job. If it’s not a good fit, it is often best to walk away and look for something else.
Skipping pre-bid meeting and site visits
Creating a good bid proposal requires precise estimations and detailed planning, so take advantage of any opportunity to research and learn about the job. This can also help you build rapport with the GC or project owner, and is an opportunity to ask questions about allowed material substitutions, bonding or wage rate requirements, and double-check that you’re interpreting the plans correctly.
When it comes to construction bidding, don’t go it alone
Always have additional eyes reviewing your bid. Not only should you ask your business partners or an outside agency to look out for typos, but also to check your math and verify that everything adds up properly. A reviewer can help make sure you didn’t miss any important components that could mean the difference between winning and losing the bid, but also can protect you from submitting a bid that is too low for the job, which can result in lost money and unnecessary debt.
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The government construction contract realm is worth about $270-billion dollars, with a near-guarantee of payment for your work. From public schools to county courthouses, to airports and interstates, government construction contracts can be incredibly lucrative for commercial contractors.
But breaking into the public sector can be tough. Here are some tips to help strengthen your bid.
Start with the paperwork.
There is a lot of red-tape involved in bidding on a public sector project. This first step can trip up a lot of contractors. Get in front of the required paperwork by creating a list and tackling one item at a time. The government has set out steps for the documents and certifications needed to apply for public projects. They include:
Identify your NAICS Code, which will put your company into a particular industry classification.
Determine the size of your company using the SBA website’s size standard tool. A quarter of all government contracts must be awarded to small businesses, so if you qualify as one, that can give you an edge.
Register with Dun & Bradstreet to obtain a DUNS number, which allows you to submit bids for public contracts in your area.
Sign up with the Central Contractor Registration (SAM) database, in order to register and track those government jobs.
Join FedBizOpps.com, which delivers new relevant RFPs and contracts available for bid.
Look for subcontracting opportunities on government projects using the SBA’s SubNet database.
Connect with a Procurement Technical Assistance Center (APTAC) where you can sign up for classes, work with a counselor and attend networking events.
If your business is women – or minority-owned, be sure to register with the National Association of Women Business Owners or the National Minority Supplier Development Council.
Show your government experience online.
Make sure you are well-represented online and that your website is current, with language specifically geared to government agencies. This is key since, beyond the information you submit, decision-makers will frequently vet a company by looking at their online presence.
If your company has worked on other public projects, be sure those are visible on your site and link to a case study with details that back up your bid if possible. If you don’t have any public projects to showcase, look for projects similar to the one you are bidding on.
Place your government and public projects in your online portfolio. Include great photos and descriptions of the work performed. Make sure your gallery is easy to find and navigate. Consider grouping or tagging your government projects by categories like schools, municipalities, and emergency response stations.
Keep an eye on your competition.
Keep your finger on the competition’s pulse by tracking contractors, contracts and future projects online. A little bit of research can give you a better idea of what your competitors are doing and help you gain an edge in positioning your company. The U.S. General Services Administration has recently merged several sites into one easy-to-use interface: https://beta.sam.gov/. This site houses information on governmental design and construction, policies and compliance, environmental laws and regulations, and more.
Focus on your reputation and past performance.
Proving that you are an established business and financially stable is essential to securing a bid. Make sure you are cashflow positive and that your financials are in order. An outside consultant or a CPA can be invaluable if you are unsure of your standing. Ultimately, the company that offers the most competitive bid with a strong track record of finishing high-quality jobs on time will secure the bid.
Click here to learn how a Financial Capability Letter can strengthen your government contracting bid.
Triple-check your bid amounts.
It can be tempting to lower your bid amount in order to beat out your competition and win the job. Remember that public entities will scrutinize your bid, and most will weed-out those that are unrealistically low.
Even if you were to get the job at unrealistically low price by dropping your profit margin you are adding unnecessary risk to the job, especially when a weather delay or unforeseen setback occurs, preventing you from being able to do the job as originally planned. It’s better to wait until the right bid goes through at a price that is appropriate to the job.
Bidding is all about the numbers. Make sure yours are accurate.
Get a free Margin versus Markup guide here.
Be sure to have adequate funding in place.
One of the most challenging parts of securing a bid is proving that you have the money to do it right. Lacking the cash and mobilization capital to cover expenses like permitting, surety bond premiums, material, and labor can be a big hit to your company’s bottom line before the project has even started.
Over the last several years, many commercial contractors have scraped by with whatever cash they have until they submit their first pay app. Then, they seek out other ways to finance the project, some of which often result in an impossible cycle of debt.
Click here to read The Guide to Merchant Cash Advance Loans.
You can avoid that debt whirlpool by securing funding upfront to cover early expenses. Securing funding before the project starts strategy allows contractors to build the cost of the capital into their bid rather than have it come out of their profit margin later on. Companies that secure a loan in advance can bolster their bid by providing the property owner with a pre-approval letter.
Be realistic and meet expectations.
Being awarded and then failing to perform on the first project because you took on a one that was too large or too challenging will make it unlikely for you to secure another public bid in the future. The construction industry relies on word-of-mouth and reputation, even in the public sector. Don’t burn your first opportunity by shooting for the moon and falling flat.
Plan for your first public project to be well within your business’s comfort level and capability. Be accurate and upfront with your bid, get the work done, and meet expectations at every step. The reward will be the larger project you win the next time, and the next.
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Are you still walking around a job site with a clipboard and several coffee-stained checklists? Or dealing with fax machines and frantically rushing to the office to print out documents? Good news! The answer to increasing your productivity is right in your pocket.
If you have a smartphone or are willing to invest in one, you can transform your business operations from an organizational nightmare to a well-oiled machine. Developers have created a seemingly endless number of apps and programs designed to make you more productive.
Here are four types of apps and programs we recommend that can help shore up your workflows:
Apps for Equipment Rentals and Tools
Many large companies in the last several years have released their own apps to make it easier for you to use their products or services. United Rentals has a free UR Jobsite app that allows its customers to access their account information and remove or extend their rental terms, or even shop for used equipment they are selling.
Tool manufacturer Dewalt has a handful of apps, including one that will track the tool battery life and another that can handle job site calculations, from stairs landing height to volume conversions.
Even retailers have apps to simplify new tools and equipment purchases. Most national retailers, like Lee’s Tools, Home Depot and Lowes all allow in-app purchasing.
Apps for Document Signing
There are tons of apps for Apple or Android devices that allow you to sign work forms and other documents on the go. Some of the most popular include Doc U Sign, Adobe Fill & Sign and Sign Easy.
Financial and Accounting Apps
Even many smaller credit unions now have apps that allow you to keep tabs on your current accounts. This can help you track whether or not a wire transfer went through, if one of your vendor processed a big check, or if there is any unusual activity on your account.
Does your payroll or accounting company have an app? Many do, and they can make your life much easier. Paychex, for example, has a handful of different mobile platform options, including one allowing employees to punch in and out for the day on an iPad or tablet on the job site.
Intuit also has a payroll on-the-go option that even has a free direct-deposit feature; business owners can review and edit all the payroll information from their phone or tablet and then authorize the direct deposits.
Any contractor knows that keeping on top of invoices is key in keeping the business running smoothly. There are several app options for this, like Invoice2Go or Invoice by Wave, that can help to draft, track and archive invoices to make it easier to manage cash flow.
There are even some smaller apps, like MileWiz. This automatic driving log removes the worry and work of actively recording mileage on your vehicles for tax purposes or driver reimbursements.
It has been about a decade since the first iPhone was released and now over 200 million Americans have smartphones. There are tens of thousands of apps that allow people to do all sorts of things, from accounting to taking current pictures and videos on the job site. Chances are, your competitors have them and are using them to improve efficiency in their own company. Are you?
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Construction can be a dangerous career. Thousands of people are injured every year, a result of many factors like careless drivers, poor training, or inadequate safety policies. But the industry is working hard to correct many of these problems with new technology and best practices.
Here is a list of new technology and advancements that may help to minimize the risk of accidents on your job site.
Smart Construction Technology
Sensors are already saturating themselves into our everyday lives. Car manufacturers install them in vehicles to prevent accidental collisions. Many smartphones automatically track your steps per day. Sensor technology is already well-integrated into many types of construction equipment, but there is still a long way to go. Several companies are working on implementing new personal technology to bring safety equipment into the 21st century.
For example, DAQRI has developed a hard hat integrated with Google Glass technology so that the wearer can see the temperature of a pipe or piece of equipment without having to touch it. That can help prevent burns as well as being able to spot problems like hot spots at a construction site. The helmet also tracks where a worker is located on the job site to alert them of hazards in certain areas, or give instructions for the proper handling of a different pieces of equipment to prevent misuse and subsequent injuries.
Smart Safety Vests monitor a worker’s heart rate and body temperature and warns them of any abnormalities. This is especially helpful during the summer months for construction workers to prevent heat stroke or other health issues caused by the heat.
Triax Technologies, Inc. has made wearable sensors attached to a worker’s belt that immediately alert others when the wearer falls or is otherwise injured. The sensors also help to log information about the incident for insurance purposes.
Low Tech Changes
On the other side of the spectrum there are many recent, less technical improvements that have improved the safety of construction zones.
- – New fabrics have led to dry, cooling bandanas and neck wraps that can help prevent workers from overheating.
- – Safety gloves are now stitched with steel to prevents cuts, punctures and abrasions while allowing for enough movement to get the job done.
- – Work boots today are specifically engineered to protect the wearer from much more than toe and ankle injuries. Some are built to combat slipping on water or oil, prevent puncture wounds from stepping on a nail, and protect against freezing temperatures or even electrical charges and acid spills.
Construction continues to be one of the more hazardous industries to work in, but these practical solutions and more like them are appearing every day to make hard-working employees safer.
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Continuing education is often a requirement for unions or to retain a state contractor’s license. Rather than sitting through the boring tutorial you always drag yourself to, why not mix it up a little and get more value out of your time and money?
At Mobilization Funding, we’re always looking for ways to help our clients improve cash flow and grow their businesses. Here are four online subcontractor courses we found to help you do just that.
Business Reality Check: Pitfalls on the Path to Prosperity
This interactive course helps business owners in all industries consider shortfalls in their operations through instructive, real-world examples. The class runs the gamut—a walk-through of founder successes and failures, management team growth strategies, and insight into dealing with cash flow cycles. While not specific to the construction industry, this course provides valuable lessons in company management and can help you identify ways you can improve and allow for more growth.
2 hours; $29.90
A Better Construction Contract
A flawed contract can cost you thousands of dollars in extra work or change order and even lawsuits. Do yourself a favor and dive into this 2-hour course that will help to ensure you are going to have a successful project and walk away with the profit you deserve. Highly rated by nearly 3,000 people, this class walks through the differences between Guaranteed Maximum Price (GMP) and Stimulated Sum contracts. The instructor goes through not only the relationships between contractors and property owners, but the dynamic that those parties have with the architect or designer.
2 hours; $29.90
Pricing as a Professional
Break out your calculators! This hands-on intermediate class is all about how to accurately estimate job costs so you can confidently turn a healthy profit on your next job. The class goes beyond adding the cost of labor, materials and equipment. It considers more subjective aspects like how to factor in overhead and how to adjust your pricing models to different types of customers beyond your typical accounting methods. But don’t worry, the course is presented in a common-sense fashion and features practical instruction and methods.
2 hours; $79.90
BIM Use and Risk Management
BIM, short for Building Information Model, is a technology used by more than 70 percent of building owners, engineers, architects and contractors to better manage and plan out construction projects. “To not adopt BIM and all its capabilities is like continuing to use a flip phone instead of a smartphone,” one property owner told researchers at McGraw-Hill Construction. There is even some discussion over whether insurance providers will eventually give reduced premiums for those that use the technology.
This course digs into the technology and talks about its implications for the construction industry. For those always looking to stay ahead of the curve, this is a great course to pursue.
2 hours; $79.90
Continuing education is an important tool for your business, whether you are learning for fun or to fulfill a professional requirement. These courses will maximize your time and money by helping you run your business more efficiently, manage cash flow more effectively and open up more opportunities for growth.
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