I know I covered this already, but I must repeat myself. Every construction company needs to upgrade the way they operate their business or fall behind their competition. Otherwise, they may reach a point where they will not be able to outbid anybody and be forced to close the doors. Who wants that to happen?
Technology Transition
On the other hand, transitioning your operation to upgrade technology, upgrade your employees and in general to become more efficient will result in lower costs along with faster job completion. However, this requires a major investment on management’s part. It is also accompanied by the risk that it may not work out as planned if the changes are not properly planned out and properly executed. This is a big risk associated with just about every major change that is attempted by any business, but especially more so in the construction business because these types of investments are not part of the normal cost of business.
Change to Remain Competitive
We wind up with management that knows they must change to stay competitive. We wind up with management ready and able to make the capital investments knowing that risk is involved. And we have a group who knows that change is needed but are not able to risk the spending because, if the project does not produce what is expected, they are out of business.
This last group, consisting of management close to retirement age, should take tax steps to monetize their investment while the getting is still good. That means sooner rather than later.
Rental Companies
I spend a lot of time in the equipment rental business and see where the Top 10 rental companies buy numerous other rental companies every year because they are public companies that need to improve both their top and bottom lines to keep the stock market happy.
Sunbelt, for example, made 24 acquisitions in 2023 and is planning to continue this trend in 2024 and beyond. The sellers get a fair price and do not have to spend a lot of time and effort trying to find a buyer. These sellers may have been thinking about selling, but then again, maybe not. In any case, if someone knocks on your door with a reasonable offer, it is very tempting and hard to say “No.” Can you see a similar program for the construction industry? I say “yes” because many companies will not be able to make the changes that they need to make to stay competitive.
The Importance of AI
One of the big issues contractors must consider is how to implement artificial intelligence (AI) to improve efficiency, reduce costs and increase profits. I have read hundreds of articles dealing with AI and concluded that this will be a tough subject for any manager of a construction company. Some questions that contractors should ask include:
- Do you attempt an AI program?
- Can you implement AI with the data you have available?
- How do you go about implementing AI?
- How much will it cost?
- Will you get the results you are looking for?
After going through these programs and examples, I decided I needed to find a source that can present this AI option in a format that is understandable so that management can begin to make a positive decision about adopting AI. It so happens that my granddaughter is a tech that installs systems. When I asked her for a referral because I could not find any material that I liked, she said “We do that.” She then sent me an AI page from a website which I decided was just what I needed, and perhaps what you need, too. It is something I want to share with you.
My logic here is to supply my readers with the opportunity to discuss a decision about AI with an expert from the Connor Group. The Connor Group is not a certified public accounting firm but a firm that handles sophisticated financial transactions with one area of expertise being AI implementation.
I contacted the CEO and told him what I wanted to do: Provide contractors with the opportunity to talk to an AI person to decide if they qualify to move forward with AI. If they do, how do they go about it, producing what information or changes that will improve their bottom line? My brain tells me that if I can produce this program to focus just on contractors that, after a few months or years, the time effort required help make an AI decision or set up an AI system will be more efficient.
I ask Lori Ditoro to include a link to the Connor AI landing page . And to allow me to start a Q&A program with Connor so that contractors can send their questions to them and allow them to comment on the types of questions they are getting or the suggestions they are providing to readers who needed assistance with an AI.
Contact the Connor Group with your AI questions after reviewing their website material. There will be no charge for this initial work. Connor Group and I will provide data to this column based on what they hear from the contractors they talk to, again at no charge. Connor will guide you through the decision process to help you determine whether to move ahead. Once you decide to give it a try, the billing process will start, but at that point you should have an estimate of what it will cost to put an AI process in place.
The goal is to gather information from speaking to and working with contractors so that we have a concentrated amount of data to share with contractors still trying to make that AI decision. And we will share ideas and methods to make your AI decision easier.
What do you think?
I am working to define the process for sharing your thoughts and info by emailing Lori Ditoro. Let us know if you’re interested in this type of program or if you reach out to Connor Group to get more details. She will forward the info to me.
