construction industry Archives - Mobilization Funding

America was built upon the foundation of freedom seekers. Our forefathers were able to create this country from their bare hands, paving out the roads to begin their journeys, building the homes to house their families and constructing the buildings that became their towns. The America we look back on was beautiful, intricate, and strong. As generations have gone on, our culture has evolved. Technology has advanced our world, expensive material costs outweigh the quality of materials used, and most importantly, the reduction of skilled, motivated and passionate people in the workforce required for America to continue building has dramatically impacted our world! With the next generation of youth reluctant to get their hands dirty, and nearly 40% of the current construction workforce predicted to retire in the next decade, we have a huge labor shortage crisis on our hands. Without construction workers, how will we solve traffic problems, build up new infrastructure to support growing populations, or repair homes after catastrophic storms damage cities? Is the future of the construction industry destined for destruction or prosperity?

No one has a crystal ball, but if we look at statistics, construction projects around town, or talk to young students exploring their future career, the answer may be scary, BUT with some changes there is an opportunity to change the tides and build America back up again!

1.) We need to work together to help change the perception of what a career in construction is really like

2.) We need to work with business partners to make building costs more affordable, but do so without jeopardizing quality craftsmanship and materials, and

3.) We need to embrace technology in a way that helps us drive efficiency and sustainability for the future!

The construction industry, for many, is viewed as a “second” place option they must go when they failed on a “traditional” pathway, or that it is a “less than optimal” line of work, somehow less noble than that of a college-educated person in an entirely different field. The truth is, they are wrong, and we need them to know that. The construction industry is a place the smartest and most aspirational people should gravitate to. This industry has more, or as much, to offer than any other industry. After all, where else can you enter a workforce with a clear path to making a 6-figure salary, transition to any aspect of business, or even in the same role but to a larger company, or start your own business to perform the work you have learned? The stories told about the construction industry oftentimes paint an incomplete picture. Telling the truth about this industry, that this career is a pathway to the modern “American Dream.” This American dream spirit will hopefully always imply a way for Americans to achieve success, through hard work, opportunity, but while “Marriage, owning a home, and having children are lower priorities than they were in the past. Being happy and fulfilled and having the freedom to make significant life decisions top the list of important elements of the American Dream of today’s young people.¹” Attracting the new generations to this dream through construction will help bring itself back and at the same time attract the next generation into prosperity to ensure growth in the future of the construction industry.

In order to maintain the building demands our culture has placed upon us, we are in dire need of retaining and recruiting the next generation of workers to continue rebuilding America. We need to focus on educating, training, and attracting people to the construction world. We need them to know how this career path can benefit them AND impact the world in which they live. We need to talk to them about how much money they can make at every level or position. We need them to know what it looks like to have a career path in construction – how they can transition it from laborer to manager to executive to owner. We need to tell the truth and reverse the stigmas associated with failing construction businesses. The only way they can see this is if we join together and share the stories and fruits of their labor. We must talk to other people about the good work you do, bring young people out to the job sites, let them test drive the excavator, and see the world from the roofline of the skyscraper that has been erected. We need people outside of construction to do their part too!

Next, we need to blend practices of the past, which gave the construction world a solid foundation to build upon, where pride went into everything that was touched. Don’t you agree that buildings built 100 years ago have a different look and feel compared to what we see today? When I pass by our courthouse downtown which was started in 1899, I am still touched by its beauty, radiating in formality, simplicity, order and tradition.

It was the effort and labor of construction workers that foster all of this history that still stands today. As we look at growing cities, new structures seem to be going up as fast as possible and many look like a standard box, some being complete eye sores. Moving forward, we need to combine tradition with modernization in order to continue to prosper into the future. It is no secret that the cost of materials and the speed at which structures need build is a major factor affecting this, but it can be overcome.

We need consumers, developers, environmentalists, lenders, banks, elected government officials, and of course developers to be proactive and change the expectations. We must stop just trying to mass produce buildings and place new infrastructure with the cheapest and lowest quality materials, not to mention the design and architecture of the structures and buildings. It would be impossible if construction companies, developers, and architects refused to change their ways, but if they are willing to be strategic and use modern materials, it is possible with a technique called “retrofit architecture.” Blending the old with the new, ultimately sustainably supporting our American legacy. A fantastic example of this can be seen in NYC with Alpolic Metal Compositie Materials, which were used in a new NYC wearehouse project in the Chelsea neighborhood.

“The Warehouse project has stayed true to the heritage of the building while infusing elegance and modernity. It is a marvel and a true study of mixed material use that has created a new icon in New York’s Chelsea art district. It stands as proof that bringing older buildings into the modern era doesn’t require a total tear-down. Retrofitting can often provide a fresh new life at significant cost savings. The goal was to maintain the historic integrity of the original structure while creating an environment inspired by innovative technology and materials, designed to support a modern way of living and working.²”

As you look around different cities and towns across America, the historic buildings look vastly different than most of what is built today. The buildings and infrastructure of the past have definitely weathered some storms, but they all seem to stand the test of time better than some of the eye sores often built today. I know, I know, easier said than done, especially since higher quality typically comes at a significant cost, and reality proves not everyone can or will pay the premiums. Which brings us to another potential challenge for this industry in the future, inflation. This obviously will impact every other industry, and is not just unique to construction.

As we discuss rising costs, controlling prices and decent interest rates, the economy plays a huge part in this, and it is hard to control. Construction contractors are then impacted by the bidding process, which also has a direct correlation to business cash flows on projects and profit margins to keep them afloat. With so many drivers affecting inflation within the construction world, the future will be dependent on elected officials both at the local, state, and federal levels that will help prevent inflation from rising. There is no crystal ball or safeguard for this, so contractors should plan accordingly for the future.

One thing to focus on for the future is to ensure you don’t place all your cards in one basket when it comes to suppliers. Focus on building strong and trusted relationships with multiple suppliers, so you can expand your network and have options in challenging times. The other thing to do is ensure you have strong records of your financials and cash flows. In fact, according to SCORE, “82% of all small businesses fail due to cash flow problems. When money gets tight, paying yourself, your bills, the payroll and other financial obligations can be extremely difficult. This is why companies of all sizes keep a close eye on cash flow, or the net cash and cash equivalents currently flowing both in and out of your business. ³” When money gets tight, paying yourself, your bills, the payroll and other financial obligations can be extremely difficult. This is why companies of all sizes keep a close eye on cash flow, or the net cash and cash equivalents currently flowing both in and out of your business. Mobilization Funding’s entire business is set up to help construction and manufacturing contractors stay cash flow positive. There is a plethora of resources and a free online cash flow tool to keep track of all your individual projects cash flows. In keeping strong records and understanding exactly what cash is moving in and out of your business, it will help you make informed decisions like which projects to take on, and which ones to say, “No” too. The future health of the construction industry will be dependent on these businesses staying afloat. Additionally, with high interest rates and inflation rising it’s becoming both more challenging and more necessary to secure funding – not a great mix huh? As a result of this contractors are taking on projects where their margins might not be as high or they don’t have the best cashflow structure, but they think winning a bid will help put more money in the bank. This strategy is actually a recipe for disaster, as not taking into account the costs of completing those projects will leave them in the red, well into the project and trying to dig themselves out. Strong records of financials and thoughtful selection of the projects they take on based on their cash flow situation will help make them bankable in the future. Mobilization Funding is structured precisely so that our loan programs provide funds according to the contractor’s cash flow cycles. Money is provided when gaps in cash flow appear and repaid back when the contractor is paid, and the cash flow is positive. Contractors having a strong grasp and understanding the their financial structure and cash flow cycles of their projects will help sustain the industry and defy the odds of failure for the future to come!

Finally, the construction world must be able to embrace and utilize technology to increase efficiency and find more sustainable ways of building that will also ensure protection of the environment for the next generation. One way that technology is helping to make construction more sustainable is through 3D printing and prefabrication. “3D printing allows for components to be printed directly from digital models, eliminating the need for traditional manufacturing processes. This not only reduces the amount of energy and resources used in production but also increases accuracy, leading to fewer errors and less waste in excess materials. Technology will help play an important role in creating new materials to aid in construction materials. Marsh says, “Expanded use of robots and machine-assisted applications can help revolutionize the construction sector.⁴” Robotics don’t have to replace our skilled workforce, but they can help make them more precise and efficient. For example…. What if all of the younger generation knew that Bulldozers, Excavators and other Heavy Equipment can all be operated with GPS and Robotics now to ensure that what they are trying to accomplish is done within a matter of inches and even millimeters. That dirt in one very precise spot can be picked up and dropped in another very precise spot at certain and specific grade that was determined in the office. Don’t you think those facts might be more appealing to the younger generation when they are considering a role in the construction industry? Technology has opened countless opportunities for making construction more sustainable in the long term, by streamlining processes and utilizing fewer resources than ever before possible. This will dramatically affect the way we continue to build when needed.

Whether you are in the construction business or not, everyone can make an impact! It is time to do your part! In doing so, America will have the talent and manpower it needs to embrace technology in construction, to seek out sustainable methods to help protect the environment, to value quality materials over cost or quantity, and help preserve the greatest country on Earth! It will give the next generation the opportunity to work hard to create something new, to reap rewards, and to achieve the American dream this country was founded upon.

References:

1. (Wilson, 2023 https://www.closeup.org/for-young-americans-the-american-dream-resonates-differently/).

2. ALPOLIC. “Can Classical and Modern Architecture Coexist?” https://www.alpolic-americas.com/blog/can-classical-and-modern-architecture-coexist/.12/6 /21. Aug 7, 2024.

3. Sutter, Brian, SCORE, The #1 Reason Small Businesses Fail – And How to Avoid It, https://www.score.org/resource/blog-post/1-reason-small-businesses-fail-and-how-avoid-it.

4. Plan Radar. “ Technology is Paving the way for Sustainable Construction.”

https://www.planradar.com/ae-en/technology-is-moving-construction-towards-sustainablity/#:~:text=3D%20Printing%20and%20Prefabrication,less%20waste%20in%20excess%20materials. Jan 2023. August 7, 2024. the construction industry as a whole.

1.) We need to work together to help change the perception of what a career in construction is really like

2.) We need to work with business partners to make building costs more affordable, but do so without jeopardizing quality craftsmanship and materials, and

3.) We need to embrace technology in a way that helps us drive efficiency and sustainability for the future!

References:

1. (Wilson, 2023 https://www.closeup.org/for-young-americans-the-american-dream-resonates-differently/).

2. ALPOLIC. “Can Classical and Modern Architecture Coexist?” https://www.alpolic-americas.com/blog/can-classical-and-modern-architecture-coexist/.12/6 /21. Aug 7, 2024.

3. Sutter, Brian, SCORE, The #1 Reason Small Businesses Fail – And How to Avoid It, https://www.score.org/resource/blog-post/1-reason-small-businesses-fail-and-how-avoid-it.

4. Plan Radar. “ Technology is Paving the way for Sustainable Construction.”

There’s one word that has been popping up for a while now. Inflation. Inflation is the rise of materials, labor, and equipment. Not only does it raise costs, but it also heavily impacts the bidding process and cash flow on your projects. What numbers worked then don’t work now, and being adaptable to inflation is critical for your business, especially construction inflation.

Inflation is also impacting your team and their families. As a business owner, team leader, or even if you are just leading yourself, it is a mistake to underestimate the impact this can have on your team or individual performance.

Key Drivers of Construction Inflation

Material Costs: Volatility of prices for steel, lumber, concrete, and copper.
Labor Costs: Skilled labor shortages and state minimums driving up wages.
Regulatory Changes: Compliance with new regulations increasing expenses.
Energy Prices: Higher fuel and energy costs affect operations.

Think about the impact these things can have on someone’s ability to do their job? For sure, it does not make their job easier, and it is likely making it harder. This could lead to someone feeling less confident, insecure, or unhappy. These are traits that could potentially lead to mistakes.

Why Inflation Matters for Bidding

Accurate bidding is essential for profitability, and construction inflation directly impacts the bidding process:

Cost Estimation: fluctuating prices make accurate cost prediction challenging.
Contract Clauses: Price escalation clauses can mitigate risks but deter clients.
Competitive Edge: Effective inflation management offers a bidding advantage.
Profit Margins: Accurate inflation projects are critical to maintaining margins.

What is my recommendation on how to combat Inflation?

This isn’t to scare you away or start prepping for the worst. My advice here is to educate yourself on these factors and how they are impacting your business, your business processes, systems and you team. Collectively create the plan, for when things do hit the fan, as we all know, proactive is better than reactive.

Market Analysis: Stay up to date on material and labor forecasts.
Supplier Relationships: Understand and secure pricing and material availability. Make sure you have a plan for backup suppliers, and create a wider network to lean on.
Create a strong Contract: include price adjustment provisions to protect your margins, negotiate terms, and provide clear reasons for any adjustments you need.
Advanced Procurement: Buy materials early at fixed prices or negotiate on higher quantities that could give price breaks. Do what you can to avoid rapid cost spikes.
Efficient Team and Cash Flow Management: Complete projects on time, understand where the money is going each week. Take time to map out the possibilities and make adjustments that are efficient to the project and business.
Do not be afraid to say “NO” to a project: This is not the time to try and thread a needle to take on additional risk. Go into every project eyes wide open.

Know your strategy. Understanding what the market is doing and establishing solid relationships could not be more important as we move through high material costs, labor shortages, and as continuous changes impact the construction industry as a whole.

Been pondering the question “What is retainage in construction?” without an answer? Read on.

What is retainage?

Retainage is a common word all subcontractors and construction-related businesses need to be aware of AND account for in their cash flow statements. The meaning comes from the words root, retain, or to hold. With contracted work, it is very common for the project owner or their bank to hold retainage back from the GC’s contract and, therefore, for the GC to withhold or not pay out a percentage of the contracted price until specific milestones are met, or the project is fully completed. When you think about the uncertainty in construction work from labor challenges, material shortages, and weather delays, this makes perfect sense as to why a portion of funds, retainage, would be held until the end of the project. This “security deposit,” if you will, ensures the contractor completes the work in its entirety and does it to the satisfaction of the GC and the overall scope of work outlined for the finished project. Generally, retainage ranges from 5-10% of the project’s contracted price. Oftentimes, payments are paid to the subcontractors in progress payments, of which retainage can be held out from each payment, OR one lump sum is held until the end of project completion. The GC and the subcontractor will agree upon the exact percentage ahead of time, and that amount will be stated in the contract.

This covers the basics of “what retainage is in construction.” However, it is important to mention that there are some legal considerations based on state regulations for retainage rules. In the state of New Mexico, withholding retainage is not allowed, whereas in Texas, there must be a 10% retainage on all private construction projects. In the state of Florida, with regard to any contract for construction services,” a public business can only withhold a maximum of 5% of the payments as retainage. When determining what retainage to establish, be sure to check out your state’s laws. If contracts violate the local and state laws, then the contracted amounts can risk becoming invalid. Paying close attention to how retainage is designated within your contracts is extremely important. There have been a lot of lawsuits and manipulation when it comes to contractors and developers underpaying for work being done.

How can retainage in construction affect my cash flow?

Retainage is common practice and therefore, contractors are aware roughly 5-10% of their payments will not be received until a later time. However, when not properly accounted for in their financial statements, this can create working capital challenges. For example, a plumbing contractor may finish work on their building, but the project will not be completed for another 6 months (sometimes even years!!), leaving 10% of their full contract value payments not hitting their bank accounts for a significant amount of time. Consider this: 10% of the contract may be as much as 50% or more of the actual profit from this job. Meanwhile, the plumbing contractor needs to move on to other projects and oftentimes, they are short on cash, waiting on the retainage from prior projects to come in. This is why understanding the query “what is retainage in construction” while utilizing a cash flow template that is well structured in timing the inflow and outflow of cash on a weekly basis is imperative. Retainage must be accounted for on each project within cash flow statements. Let’s review how to properly account for retainage in your financials.

Incorporating retainage into your cash flow statement

When you have the cash flow of every project estimated and scheduled, you have a solid foundation on which to build your business’s profitability. When inputting data into your cash flow tracker, look for a tool that will auto-calculate each of your pay apps net of retainage. Otherwise, deduct your retainage percentage from every expected pay app when you are accounting for how much cash will actually be coming into your bank account. Your cash flow tool should have a function for when you will actually be paid by your customer. Contractors include the full amount they are invoicing each month, including the retainage amount, but it is then deducted when determining the amount to be paid in cash for that invoice. In other words, it is earned at the time you invoice but then held till it is due when you meet the milestones. You GET retainage when you submit a FINAL invoice for retainage at the end of the project AFTER the project has met the requirements to invoice retainage per the contract. The moral of the story, proper recording is key! Your cash flow tool needs to have the functionality to show when that money is coming into the business. Or you can just use the one that we created and have on our website for you (https://mobilizationfunding.com/cashflow/). Our tool keeps track of the percentage of retainage you enter and when you expect the retainage to be paid. It is important to update the dates you actually receive the funds. If the retainage payments are delayed, other project cash flows may also need to be re-estimated, especially if you are relying on the funds to get started on other projects.

If your company has more than a few employees, your revenue is growing, and you are juggling multiple jobs, it’s probably time to hire your own construction accountant, preferably a Certified Public Accountant. A good accountant often pays for themselves in a relatively short amount of time. After all, finances need to be current and accurate in order for you to stay on top of your accounts and plan for growth.

Hiring an accountant can save you time

Hesitant? Consider how much time you currently spend per week on payroll, sending out checks and keeping your accounts in order. What else could you be doing with that time? And how many times has something slipped through the cracks—like a late payment to a vendor or the IRS? Even once is enough to prove why hiring a CPA is a good idea.

A construction accountant can organize your company’s financial documents

No matter the industry, there are a handful of basic financial records that your company should maintain and pay attention to in order to operate efficiently. These barometers will reveal whether your company is making a profit or operating at a loss.

If you don’t know where your company’s financial information — like monthly accounts payable, accounts receivable, quarterly Balance Sheets, Profit and Loss Statements and other standard financial reports — are kept, or if they’re out-of-date or not organized, the right accountant may be your company’s new MVP.

Beyond creating an orderly archive of financial documents, a bookkeeper or CPA can dig into those numbers to identify strategies that can improve your company’s profit margin, eliminate debt, invest in future growth opportunities through strategies like increasing your prices, reducing overhead, or making other changes to your day-to-day operations.

Pay your taxes correctly and on time

Filing and paying taxes in a timely, consistent manner is an unavoidable piece of running a legitimate business. And the risks of incorrectly processing that paperwork are numerous and costly. Failure to do so can result in expensive fees by the IRS, plus automatic draws from your account to repay any unpaid taxes. An accountant will keep you in the IRS’ good graces.

Avoid costly overdraft and other avoidable bank fees

Bank and overdraft fees is not only a slow leak on your company’s bottom line — they’re also a tell-tale sign of financial problems. These fees and the underlying issues causing them (lack of organization, communication problems, etc.) will likely prevent you from qualifying for lines of credit or low-interest loans in the future. If this is a reoccurring issue, consider it a clear sign that you need help managing your cash flow.

An accountant can improve your business growth strategy

Are you passing up on growth opportunities due to a lack of capital? If your business has been approached to take on larger or more lucrative projects but you have turned them down due to financial uncertainty or issues with debt, it is likely time to find a financial expert who can help you to better direct your company to the right track.

How to find the right construction accountant

If you are reading this article, then by now you know it is time to take action. The next step is finding the right person for your business. Here are a few pointers:

1. Research candidates online. There are many websites dedicated to connecting employers and job seekers, such as ZipRecruiter.com, Glassdoor.com or even LinkedIn. Simply enter your qualifications (feel free to compare the requirements of similar businesses) and connect with local applicants.

2. Enlist help from a staffing agency. A temporary staffing agency in your area can place an experienced person with the right qualifications for a temporary amount of time, permanently, or a temp-to-permanent arrangement. While they charge a premium rate, this may be the best option for a business owner who doesn’t have time to weed through applications, order background checks or conduct initial interviews.

3. Reach out to trade associations. Your local chapter of the Associated Builders & Contractors (ABC) or similar agency like the Construction Financial Management Association may be able to connect you with viable candidates who is familiar the construction industry and would best fit your needs.

The bottom line: Your commercial construction business needs, and you deserve, a financial expert’s help.

You should be doing what you do best: focusing on growing your company and properly completing your jobs on time and on budget. Company owners are often reluctant to let go of finances, but the truth is that construction accountants understand your industry and are trained to look for inefficiencies, find other lending options, and help you to more efficiently run your company. Just remember that as the business owner, you should continue to review your financial position with your accountant on a regular basis.

Is your business getting ready to bid on your next big project? Contact us today for a free business consultation or click here to learn about how a financial capability letter could help give you a leg up on the competition.

If you found this blog helpful and informative, you may also enjoy our newsletter. Click here to subscribe and get more tools and resources sent directly to your inbox every two weeks.

Update your passwords regularly

Do you use the same username and/or password for everything? If so, those accounts may be compromised already. Hackers, knowing that most people use the same log-in information, then use those same credentials to gain access to accounts on hundreds of different websites.

Large companies like Adobe (whose products include Photoshop or Acrobat) have been subject to hackers who stole username and password information from more than 150 million accounts.

While it is less convenient, your information will be exponentially more secure from hackers if you always use different passwords for your online accounts. For the most sensitive accounts like your email, online banking accounts and computer log-ins, you should change the password every three months and require your employees to do the same.

Bonus Tip: Use a service like 1Password so you don’t have to remember all those passwords.

Add extra security

For many online banking and email accounts, you can choose to add another layer of protection to your account called two-step verification. Two-step verification means that the website or bank will alert you if anyone attempts to log into your account from an unrecognized computer. It will also force whoever is logging into that account to input a code that is sent directly to your mobile phone.

Don’t log into unsecure networks

One of the most common ways for your computer and network to be compromised is to access free public WiFi networks like those at airports, coffee shops, or even the library. Because the networks have less protection, hackers can use them to gain access to your computer or accounts. If you need to use those networks, be careful about accessing sensitive information or logging into other secure accounts.

Secure YOUR network

Your own WiFi network is just as vulnerable as your local coffee shop’s if it is left unsecured. And if you’re thinking hackers won’t look for your network, think again. Hackers actually drive around in cars outfitted with antennas just to find unsecured networks. It’s called war-driving.

Cool name. Bad practice.

Protect your WiFi by updating its encryption standard and setting a password that is obscure. Don’t set the password, for example, to your business name plus the year. Hackers will crack that in no time.

Work with a cybersecurity partner

Construction is a group effort industry, so don’t stop that philosophy at the job site. Working with a cybersecurity partner, preferably a local business that can meet with you and answer your questions, can help you secure your data and protect your business.

Train your employees

Your employees already know to secure the shop for the night, but are they locking up their data? Implement a cybersecurity training program for your employees and ensure that those policies and best practices are followed.

Bonus Tip: Not sure what that policy would look like? This is a great place to start with a cybersecurity partner.

For additional resources about how to secure your business online, visit the National Cyber Security Alliance’s Stay Safe Online website.

If you found this blog helpful and informative, you may also enjoy our Built For Growth Newsletter. Click here to subscribe and get more tools and resources sent directly to your inbox every two weeks.

How Cash Flow Impacts Performance in Construction

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.

If you found this blog helpful and informative, you may also enjoy our Built For Growth Newsletter. Click here to subscribe and get more tools and resources sent directly to your inbox ever