Safeguard Your Business in 2014

It’s time to take the crystal ball off the shelf (if you haven’t done so already), clean it off and review the factors that will be part of your business plan for the next 12 to 18 months. I have to confess, however, that no matter where your market is, there will be a lot of “noise” to think about in order to come up with a reasonable game plan for 2014.

It doesn’t make a difference if you’re in one of the construction hot spots or a stalled market. Every contractor must consider many of the same hard and soft issues when assessing the risks of the decisions they contemplate in regards to 2014 business activities.

I spend a lot of time every month analyzing numerous economic and financial data; reading both industry specific and general economic publications; talking to bankers and equipment vendors on a regular basis; and fulfilling my CFO duties for construction-related entities. After digesting all of this material and going through my own planning process, I can’t get too excited about 2014, because I see expenses increasing no matter where you work, without much assurance that these cost increases can be passed on to customers.

Will there be more business available in 2014? My guess is there will be, but not enough to soften up the competitive nature of the market. It will still be a tough bidding environment requiring contractors to be at the top of their game from a management perspective.

This is nothing new, but when you start to believe the hype of how great things are and will be, there could be a tendency to drop your guard and wind up with a black eye. I suggest you take steps to avoid this trap and think through any risk factors that could produce negative cash flow if the year doesn’t go as planned.

Headwinds Ahead

What headwinds do I see in 2014?