Almost one year later and we are still in the midst of the COVID pandemic. For some, wearing masks and social distancing is the extent of their inconvenience. As a contractor, it’s your livelihood and your family’s welfare that’s at stake.
For many small contracting businesses, the challenge is to survive the pandemic. Those that do will have their pick of work as the economy starts up again.
We look at 4 things you should be concentrating on to get through to the other side of COVID.
1. Look after your cash
Cashflow has always been a challenge for General Contractors: now it is worse. Here’s what you can do to keep cash flowing:
- Never has it been more critical to get your invoices out promptly. So, be diligent. Ensure yours is the first bill clients pay by invoicing them on the day the job is complete.
- Contract a bookkeeper on an hourly basis to chase slow payers if necessary. But ideally, select the right clients to work with upfront.
- Always keep personal and business accounts separate. That way, you know when you’re running into trouble.
- Make sure you properly account for your overheads in pricing
- Re-assess your fixed expenses such as your business insurance premiums. Speak to your General Contractors Liability Insurance holder and check in with them if your current business flow can help lower down premium costs. Some insurance companies offer discounts for contractors with minimal projects per year.
2. Stay small; stay focused
Increasing capacity in these uncertain times is risky. Onboarding new employees can be a time-consuming distraction that cuts into your margins. And committing to new capital can place additional stress on the cash flow of the business. In times like these, keep expenses as low as possible and build up whatever cash reserves you can.
If you can’t handle a big job on your own, join forces with a competitor and tackle it together. It could result in a lasting relationship with benefits for both parties.
3. Keep up your marketing
Marketing is usually the first thing that is dropped when a business hits trouble. We can’t deny that the pandemic is Trouble with a capital T. However, by skimping on or stopping marketing, you lose the chance to remind clients that you are Open For Business.
- Keep your deal pipe flowing by maintaining your marketing activities. This means your social media accounts should be kept active by posting at least twice weekly. (Outsource this if you find you can’t keep up.)
- Review your ideal audience. Are the people you’re talking to the ones who will bring you desirable work with lucrative margins? Demonstrate solutions to the problems you know your audience faces. Establish your expertise and ensure your business is top of mind when they look for contractors.
- Bolster your online presence with reviews. These work just as well as word of mouth marketing. People trust reviews even if they don’t know the reviewer! Ask satisfied clients to score you on sites like Yelp, Angie’s List, and Google. And be quick to respond appropriately to any negative reviews.
4. Review your insurance
In trying to get expenses down, don’t be tempted to skimp on essentials like insurance. Instead, review your insurance to ensure it reflects your changed circumstances. Take advantage of COVID downtime to:
- Right-size your coverage. If your turnover has taken a knock, you might be able to reduce your cover and lower your premiums especially with Commercial Auto insurance. The minimal distance your commercial auto travels, the lesser the risk – thereby resulting to lesser premium. If you’ve had to let employees go, make sure your workmen’s compensation is adjusted accordingly. And the same for any asset or property coverage you may have. But don’t forget to increase these again when things get back to normal.
- Obtain comparative quotes. Has your excuse always been that you’re too busy? Now’s your opportunity to get your house in order. Before making a selection, ensure you’re comparing apples with apples. Lower premiums may be a result of less cover or higher deductibles. Can you live with the consequences of these?
- Investigate discounts. There’s no harm in asking straight out for a discount, especially if you have been with your broker for a while and have a good claims history.
Can you mitigate risk in the short term by being more actively involved on sites yourself? Or by only taking on low-risk projects? If so, it might be worth considering lower premiums in exchange for a higher deductible.
Alternatively, ask about bundling products into a Business Owners Policy (BOP.) These are policies designed for small businesses and can often come cheaper than the sum of the individual policies on their own.
- Ensure you are covered for COVID. Has the pandemic changed the way you work or introduced new risks? Is your contractor business adequately covered?
Ask the agents from Contractors Liability for insurance assistance. We are here to help you stay in business in 2021. Call 886-225-1950.
There is more than one bottom line
Last but not least, maintain your personal well-being. We are living in unprecedented times. It’s okay to permit yourself to grieve for the lifestyle and lives we have lost.
But then, don’t forget to fuel back up! Spend time with your loved ones if possible. Eat healthily and exercise. Nothing runs on an empty tank, including you. Surviving may be the priority at this point, but it’s a long game.
Set your business up for success in 2021: call Contractors Liability at 886-225-1950