Challenges in the Construction Industry that can Affect Your Budget

All businesses face challenges, especially at the outset or during infancy. But one industry that faces numerous challenges today is the construction industry. 

Any business owner will tell you that once you begin the journey of starting a business, regardless of the trade you’re in, challenges will come about when you least expect them. 

As a precaution, and with the due diligence of being proactive, a savvy business owner will plan ahead for these contingencies as much as possible. And this typically includes cutting costs or adjusting spending habits as needed.

But it’s also good to know what types of challenges you might come across while you’re establishing yourself and building your business. And though these challenges will vary across all industries, some particular challenges are specific to the construction business itself. 

If you’re in the construction business and you’re just starting out, chances are you’ve weathered the challenge of getting your business up and running. Here, we’ll outline a few challenges that you might face down the road, and how you can plan to navigate through them.

Unforeseen Challenges in 2021

One thing that all industries have in common is the occasional challenges brought forth by socioeconomic and political standings. Depending on where you live, your local government might hinder you in establishing your business through the use of heavy taxes or licensure requirements that can be costly.

Along these same lines, the federal government can also pose challenges to any business owner based on the policies of any current administration. Tax brackets can become a challenge, and business taxes tend to fluctuate after election years. 

COVID-19

Despite challenges posed by government bodies and income status, as of 2021, one major issue affecting everyone on the planet is the persistence of the COVID-19 pandemic.

In March of 2020, the entire world shut down and many industries slowed to a halt. Overnight, many found themselves without work. And those who could work had to comply with new regulations that limited the type of work that could be performed. 

The ramifications of the worldwide shutdown are still being felt today, over a year and a half after the initial onset began, and one aspect of this that affects the construction industry is the shortage of supply personnel.

The supply chain worldwide has been affected by COVID-19, and without the ability to get tools, materials, machinery, and other equipment delivered in a timely manner, many contractors have found themselves stalled on jobs.

When faced with this type of challenge, a contractor can look for local resources when it comes to purchasing equipment and materials, or outsource from nearby communities and arrange to transport the materials using a company vehicle or a local delivery service. 

Qualified Labor

Another challenge that the construction industry faces is the lack of qualified labor. Big jobs require a bigger crew, and sometimes finding the right help can be a challenge. Additionally, finding the right help at the right price can also prove to be difficult. 

Experienced Workers

All businesses prefer to hire experienced professionals. But sometimes these individuals are hard to find, and when you’re able to find them, they want to get paid a significantly higher wage.

Even though we all want to get paid what we’re worth, sometimes you can’t afford to pay high wages. If this becomes an obstacle and you really need a seasoned veteran on-hand to ensure that your job will be done properly and professionally, consider negotiating to come up with a payment arrangement that both of you can agree upon. 

Apprentices

One way you can cut costs is by hiring an apprentice at a reduced hourly rate. This is because apprentices are eager to learn the trade, so they’re more willing to work for a reduced rate of pay in exchange for on-the-job training.

You’ll also be able to train your new apprentice to do the work in the same fashion that you once learned, thus, creating valuable job skills that your apprentice can take with them wherever they decide to go.

Interns and Students

Believe it or not, yes, there are even interns within the construction industry. And the best part about hiring interns is that not only are they willing to learn, but most internships are also unpaid. And this is something that you can take advantage of.

Interns can be a valuable asset when you need to cut labor costs, and just like an apprentice, you can train them how to do the work your way.

Students are also a great resource for labor when you need to cut costs. Often in the summer months, students interested in the trade will seek out summer jobs. You can offer these inexperienced youths a chance to learn and get paid a modest wage, but it doesn’t have to break the bank. 

Equipment Costs

One of the biggest financial challenges that the construction industry faces is the high cost of equipment. 

Big jobs require big machines. And as such, those big machines tend to be quite costly. Even work trucks for you and your crew can be costly as well, and these are essential for getting to and from the job site with all of your gear.

If you find yourself needing new equipment in lieu of expansion, you can consider renting gas or diesel trucks at a reduced cost. This will save you thousands of dollars in the long run, and you can use that money to save and buy your own fleet of vehicles at a later time. 

Heavy Machinery

Perhaps the costliest items in the construction industry are heavy equipment such as excavators, backhoes, front-end loaders, and the like.

Some jobs will require the need for these large pieces of equipment, and if you don’t have access to them, you might have to pass on a high-paying contract.

If you’re faced with the challenge of acquiring heavy machinery, take a look at local heavy equipment auctions, or perhaps look to rent these machines in place of purchasing them brand new.

Auctions tend to have these machines priced at half the cost as new models, though you might need to work on them or have them serviced. 

Tools

All construction laborers need tools to be able to complete a job. But tools are also a huge expense for any contractor no matter their specialization. 

The good news is that you can find second-hand tools in a variety of places. Simply by looking at online classified ads, community sales websites, or even at local pawn shops, you can find a variety of quality tools for a fraction of the cost that you’d pay for them brand new.

Moving Beyond Challenges 

If you’re going to make it in the construction business, you’ll need to learn to adapt to the changing environment. This can include dealing with weather-related delays, customers changing their minds on details, and many other factors.

But at the end of the day, as long as you can see through the fog of any challenge that arises, you’ll be able to keep your head above water just long enough for that next big job to come your way. 

Being in business means knowing how to save money while strategizing better ways to make money, so keep your eyes open for any opportunity to save money, and your bank account will thank you later.