The Future of Commercial Construction Post COVID-19
The COVID-19 crisis has hit many commercial construction companies hard, making many of us wonder about the future of construction post-COVID-19. Projects have been put on hold, and many have been canceled. To many, the future looks shaky at best, but this needn’t be the case. Construction companies in Sacramento and elsewhere can take a number of measures to not only survive this situation but also come out of it stronger. Today on the blog, our commercial builders highlight some of those helpful measures.
Pay Special Attention to Financial Stability
Commercial construction companies in Sacramento need to review their corporate and capital budgets. Additionally, they should look at any additional alternatives to generating funds. This will help as adjustments can be made to weather the current storm. However, the lack of clarity about the direction of the pandemic makes it hard to conduct financial reviews and adjustments.
A possible way around this challenge is to engage in robust scenario analysis for each project and market. This case-by-case approach is critical since each ground-up construction project is unique and has its own contractual requirements. Tools that generate different models for various conditions can help Sacramento construction companies make data-driven decisions about how to keep costs manageable during and after this difficult time.
Staff Safety and Engagement
The stay at home orders issued in the wake of the pandemic had immediate effects on construction sites. Our neighbors at Gilmore Heating, Air & Plumbing, Sacramento HVAC company, explains that they’ve had to make tons of adjustments in their day-to-day business. This is because a significant number of workers have to be present on the job site during typical workdays. Construction companies now need to pay even more attention to PPE, especially with regard to disease prevention, and it is possible to take additional measures (staggering work shifts, for example) to reduce the number of employees at sites at any given time.
For those who can work from home, special attention has to be directed towards cybersecurity. Sensitive project and company information is likely to be transmitted over the home internet connection. Unfortunately, that can create vulnerabilities that can be exploited by hackers. Regular communication with telecommuters can avert most avoidable threats.
Inevitably, some employees may have been furloughed due to the pandemic. These staff members needn’t be neglected during the pandemic because they may have skills that are in short supply when normal conditions prevail. Strip mall construction firms and other companies in the construction sector are therefore advised to consider upskilling their furloughed employees so that they can remain useful to the company.
Supply Chain Evaluation
The harsh economic effects of the pandemic are undeniable. Commercial construction companies need to assess how the lockdowns have affected their planned or ongoing projects. For example, Sacramento construction companies with overseas suppliers may have suffered disruptions, and supplies may not come through as expected.
Our team advises you to contact your suppliers. This will help understand the specific supply chain vulnerabilities you are exposed to. Find out what challenges they are facing in their operations. Generate a dashboard depicting this information and keep updating it as the pandemic evolves.
Now maybe the time for you to discuss project flexibility with your supply chain. Additionally, and it is time to look at the real possibility of having to change suppliers in case the current ones become casualties of the pandemic.
Don’t forget to analyze the legal implications of every decision you make. The current situation isn’t an excuse for you to act without thinking through your contractual or other obligations.
Bolster Your Financial Position
The cash flow of many commercial construction companies has likely taken a huge hit during this time. This is due to stalled projects or accounts receivables that can’t be collected. Without cash, a construction company can go belly up quickly. Now is, therefore, the time to look into government financial support, restructuring credit facilities, and looking for ways to raise additional equity. The survival of your Sacramento construction company depends on how well you keep cash flowing.
Raising resources shouldn’t only be focused on staying afloat during the crisis. When the pandemic is brought under control, and a degree of normalcy returns, you’ll want to be prepared. Only those sector players who manage to have a healthy balance sheet will reap the benefits of the numerous contracts aimed at stimulating growth. Such companies can also grab the choicest merger and acquisition opportunities. These are the inevitable outcome of such a crisis.
The bottom line is that this pandemic presents an excellent opportunity for commercial construction companies to rethink how they do everything. Not all companies are likely to emerge out of this unscathed. Certainly, you don’t want yours to be one of the Sacramento construction companies that go under. Are you ready for the future of construction post-COVID-19?