The COVID-19 pandemic has hit the world hard, resulting in the closure of many businesses. It’s estimated that 60% of all companies that closed down because of the pandemic never opened again. Most businesses sighted an increased cost of operations, less operating capital, decreased demand and safety concerns as the reasons forcing them to close down permanently.
If your business is still running, you’ve probably faced different challenges, some of which shaped your operations. Here are ways to protect your business to enable it to transition through the hard times.
Invest in Cyber Security
Cybersecurity in construction industry is a concern, especially during the pandemic when everyone prefers online operations to a walk-in business. Have security measures that don’t leave behind traces of your browsing history and protect your data. Malware, phishing ransomware are just some of the cyber threats that can significantly affect your operations.
As clients opt for convenient and faster online processes, they need assurance that their data and online activities are secure. A data breach affects your relations with clients and can be costly, especially when sued for damages.
Be Prepared for Supply Disruptions
A pandemic affects every business and with this in mind, be ready for a disruption in the supply chain. You may have to wait for construction materials longer than expected or not get from your regular supplier. Some suppliers may have closed down because of decreased business which will force you to start new relations.
Before covid, many construction companies sourced materials abroad, which was a cheaper option, but with the inconveniences brought about by the pandemic, they have to result in more costly local options.
With all the disruptions, you still want to keep contented clients. Ensure you have enough products and don’t wait until the last minute to place an order. You may also consider having a business interruption insurance policy to cushion the company from losses related to loss of income.
Determine Your Cash Flow Status
As operations slow down, you’ll probably start to notice cash flow problems. Some clients may have problems paying on time, while generally, demand will be lower than usual. To cushion yourself, check the various cash flow options available for your business.
It might mean applying for bank loans while you take advantage of invoice factoring and a line of credit. You may also consider applying for a Small Business Administration (SBA) disaster relief loan applicable to small business owners in the US.
Protect Your Operations with a Worker’s Lien
Although it should be the last resort, a worker’s lien protects you from losing income when clients don’t pay on time. When you file for one, the client cannot sell, lease or mortgage the property until the debt is cleared. It’s not an easy process, but if you’ve exhausted all other communication channels, it’s the best way to ensure you eventually get paid for the work. Also, note that clients may be hard hit; therefore, don’t be quick to file the worker’s lien unless the client is not cooperating.
You may also have to change your client acquisition processes and carry out thorough checks to ensure your new clients are creditworthy and credible.