Why do contractors fail? 3 Solutions for General Contractors challenges

Projects overload
The Contracting companies are always, eternally hungry for more. More work! More Projects! More of that means more money, but they never take into consideration the assets they have (money, machine or human). They assume they can get the Project and then hire on the fly, as you go… Well considering the heavy labor shortage many companies fail. Of course, the deployment of robotics could help, but tell me who has the money for that nowadays?! Another factor that comes in to play is the extension of one’s scope of experience - taking a project in a new specialty area, requires a lot of research and training.

Financial Management problems
Contractors take on big projects in the hopes of making a good deal. Now the problem is that even before you are paid, even before starting the project, you have to put money in the project you took over. Additional troubles may arise, like not being able to take credit so you can pay your team and your suppliers in time before the project money comes in. There are very few cases in which the contractor gets paid (partially) up-front, so this is a great risk that the Contractors are assuming.

Process planning and management issues
Construction Industry businesses usually are handed down from generation to generation so a lot of information may get lost along the way or processes will be changed. A well-known fact is that upper and middle management must be firm and well-positioned, otherwise the whole enterprise turns into chaos (eg. inadequate supervision, lack of understanding of company policies and procedures).

Planning ahead
Taking too many projects on at once may cause issues with handling current staff details. What we suggest is not to panic because there is a labor shortage in the market, but rather think ahead:

Become a mentor
During the summer months the students are always looking for extra work that they can do, and in that way, you can give a helping hand to the young ones but also raise your own team from scratch. You can even create a program inside your company for that - it will also do wonders for your PR team and will definitely look good on Social Media communication

Think outside of the box
Find a new workforce, look at the female employment market - only about 10-11% of the construction industry is female. There are plenty of skilled workers out there, working on construction sites (or training to join the industry).

Make sure you invest in a good construction ERP system
A cloud-based ERP system will allow you to work from any place, at any time, as long as there is internet connectivity. There are plenty of construction management software systems for builders and contractors so there should be no issue in finding one that is suitable for you. Make sure you pick the one that focuses on the types of projects that you have and the processes attached to them. It will allow you to track your projects, at any given time, and see how they are fairing - what is the next step that needs to be taken, who should do which tasks and where? It is all there for you to see and stay on top of things!

Managing finances
Cash flow and staying on top of accounting is key, so having a General Contractor management software by your side should be your top priority! A good construction ERP system should allow you to keep track of your finances and know, at any moment, the Financial Health of your projects at a first glance. The construction management software for builders and contractors that you will choose should have integration possibilities with the top market accounting systems (eg. Xero, Quickbooks, Sage). It should allow you to create, edit and send financial documents to your clients and to the companies that you work with. The general contractor management software should allow you to plan out and approve your budget - create the Bill of Quantities online and send it to your client remotely. You will have all the details in one single location, readily available for the members of your team - access granted by departments, to make sure the financial data is safe from prying eyes.

Focusing on project management
Construction Management software for builders and contractors that are available on the market are focused on the Project Management side: making sure you have the Programme of Works settled down and input in the system; that the Scheduling is done properly by avoiding the double booking of the assets (a quite common mistake!) and resource mismanagement taking place; that the company stays on top of the Production Control - no matter how advanced the project it, no matter how many processes are attached to it, you will have it all in one place and easy to track it all. General Contractor management software exists so that you can breathe easily, so that you can focus your time and energy on more pressing/important matters. Even if you have just inherited the company, you still have this covered: bring to the front all the long serving employees of your company, settle down all types of projects and the processes attached to them. Discuss how the company works, understand it and implement it in the cloud-based ERP system of your choosing. This way you will have it all written down and agreed with the whole of your team - all you need now is to execute according to plan and keep an eye on the Financial Dashboard to see the Financial Health of the projects you are running.