With more people staying indoors and plenty of shops and businesses shutting down, it isn’t surprising that significant industries like construction are taking a severe hit because of the pandemic.
Early this year, experts forecast that this sector will grow by at least 3% in 2020. By April, it already shrunk to 0.5%. While times are scary, it doesn’t spell the end of your many years of labor.
McKinsey is confident that it will bounce back. Along with engineering, construction will play a significant role in resetting a post-pandemic economy. What you need to learn is how to thrive during the chaos.
1. Buy the Equipment You Need Early
As the saying goes, when you hit rock bottom, you have no other way to go but up. You have to survive while you keep swimming. For a construction business, now could be a good time to invest in equipment and tools.
For one, the likes of diggers for sale are available at a much lower price due to low demand. With fewer competitors, you have enough opportunity to choose the best unit that you can afford.
Second, if these pieces of equipment have been acquired before the pandemic, they are also more likely affordable than the newer batches. The reason is the disrupted supply chain. It can be more expensive for sellers to get them from their suppliers as many countries close their borders.
2. Get Rid of Old and Non-performing Assets
Although buying a new piece of equipment can increase the value of your assets in your balance sheet, it can decrease your cash flow. To compensate for that, you can consider letting go of non-performing or old assets.
What are these assets?
- These are machinery, equipment, and other supplies whose salvage value has decreased significantly.
- Their output has already declined and that keeping them around, including maintaining and repairing them, is costlier.
- These might also refer to new units that are hardly used. As long as they’re with you, you’re spending for their maintenance, and yet they’re not contributing to your revenues.
3. Re-Evaluate Projects
Now might be a good time to follow the Pareto principle: 20% of your inputs should already generate 80% of the desired results. To accomplish this, one option is to re-evaluate your projects.
Ask yourself these questions:
- Which types of construction work generate the most income for the business?
- What resources does it need?
- How much effort does my company need to give to reach this income?
4. Invest in Automation
Automation is another strategy to meet the criteria of the Pareto principle. With it, you can resolve the following issues:
- Labor shortage and a lack of people with special skills (both can drive operation costs)
- Time delays
- Inefficient allocation of resources
Automation need not mean buying the most technological piece of equipment in the market. It can be as simple as a platform that allows you to manage your staff properly or projects.
Thriving amid the pandemic will be a tall order, but it is possible. But remember, only those who prepare for the future can make it.