RECESSIONS CLEANSING EFFECT
Recessions Cleansing Effect On New & Younger Contractors
Overall, the Great Recession provided a cleansing effect on the local construction industry by forcing out marginally operated firms that were over extended, under managed or failed to quickly adapt and evolve or change in order to survive. Cleansing provides renewal, improvement in resource allocation, efficiency and overall results. The kind of results that transcend the organization and touches customers and their experiences.
Surviving mature contractors were able to improve on time tested methods and evolve in ways that will meet the demands of a more educated public. Conversely, start-ups, new and young companies did not have the same opportunity as more mature organization. Young firms were and still are required to focus limited resources on driving revenue to pay the bills and keep the doors open from month to month; continually chasing the next project without the time to reflect on what it takes to work on the business instead of in the business.
“Cleansing provides renewal, improvement in resource allocation, efficiency and overall results.”
Today, we see new untried, untested, “green” and young contractors that are very good at their respective trades but are learning what it takes to produce quality projects, on time and withing budget with routine. The new batch of post-recession construction businesses are learning as they go via OJT (On the Job Training).
The statistical reality tells the story.
Less than 1 in 100 will make it 25 years and 90% will be gone in the next 5 years.
The cleansing effect takes place again and again with surviving contractors exhibiting good business acumen and skill sets that go far beyond having good trade skills.
The take away.
Be careful of becoming the latest experiment and being cleansed by a new and young contractor.