While most states deemed construction and contracting as essential services during the recent lockdown, that doesn’t mean all projects went on uninterrupted.
Consider these stats:
In Texas, it’s estimated that nearly 70% of construction firms have projects that were put on hold.
New private home construction slowed by 22% in March 2020.
And strained supply chains may have meant that even if a project wasn’t put on hold, it may have been difficult to get the resources needed to keep working as usual.
So now that states are lifting restrictions and there’s likely a light at the end of the tunnel, many general contractors, builders, and remodelers are wondering:
“How can I restart my construction projects that were put on pause?”
We’re here to help. Take a look at some business recovery strategies dedicated to helping contractors and construction specialists like you to get back on track with your projects.
Before you start bringing back your subcontractors or reaching out to clients about their projects, make sure you have a clear understanding of your city and state’s guidelines on how to move forward with work once the lockdown is lifted.
It’s a good idea to check your state’s website to learn what guidelines you may need to follow to get back on the jobsite. Additionally, Construction.com has a helpful hub that contains timely, state-based updates that apply to general contractors, builders, and more.
Make a point of checking in with these guidelines every day, as your state’s rules may change frequently over the next few months. If you’re ever unsure about what your state’s requirements are, Construction Connect has a great interactive map that can give you an at-a-glance look at how your state is handling reopening contracting and construction projects.
Additionally, here at Simply U, we’ll make every effort to keep small business owners on top of the updates regarding COVID-19 and how it may impact their work. Keep checking in to get the latest news, or sign up for our newsletter to get updates delivered to your inbox.
If you had to temporarily close shop (for example, you live in a state that considered construction to be non-essential) and your customer contract allowed you to delay completion of your project after notifying the customer of these restrictions, check your existing customer contracts to make sure you’re following the proper protocols to restart and complete your projects once your state has lifted restrictions.
For example, if the contract requires you to provide your customer with a 15-day written notice before returning to the jobsite or requires you to complete the project within two months of restarting, be sure to do so. Otherwise, you may not be following the excused delay clause set out in your own contract, which means your customer could contest it if he or she wanted to. It may also help to work out scheduling with your client to make sure you’re both on the same page.
Also, if help is needed, review your contract with an attorney to better understand your requirements.
It’s tempting to want to reactivate all of your paused projects once you get the all-clear to return to work. But before getting your employees to return to the jobsite, review your financials to see if you’re in a good spot to resume your regular construction schedule.
Here’s why: You may not be held liable for project delays resulting from COVID-19, but if you return to the jobsite and don’t have enough money to get the materials you need, you could be held liable for that delay.
That’s why it may be a good idea to review your cash reserves on hand and how those funds can be used to restart your construction projects. You may need to prioritize your largest projects first to get cash flow moving again before restarting smaller projects.
If cash flow makes it difficult to reactivate all of your projects at once, be sure to let your clients know when they can expect you to resume work at the jobsite.
Speaking of which…
Life has changed for most people over the past few months. Some folks may have lost their jobs, while others may have had their salaries cut.
So before you head to a jobsite, it’s worth checking in with your clients to see if they’re ready for you to resume working. In most cases, your clients may be relieved that you can return to work, but for those few clients who may have
Now here comes the hard part: If you have a contract with a client who doesn’t have the funding to complete a project, you probably have provisions to protect your business if they can’t pay you.
But here’s the thing — your client likely ran out of funding due to extraordinary circumstances. Your client probably didn’t know that their financial situation would have been so drastically different when they first kicked off the project with you (who can predict a pandemic?). So if they lost their job and the bank pulled funding, it’s up to you to determine how you want to proceed.
Sure, your contract may allow for provisions to sue if a client won’t or can’t pay, but in these extraordinary times, it might be worth giving your client a little more time to find a new job or a new source of funding.
It’s entirely your call, but it’s worth thinking about how you’ll approach these situations should they happen as you restart paused contracting projects.
Supply chains have been a mess these past few months. So if your state is starting to lift restrictions on jobsites, spend some time analyzing if you’ll need any additional equipment and materials before heading back to work.
Here’s a quick-step guide on how to do that:
Take the total number of projects your business is currently working on.
Divide those projects into two categories: active projects and paused projects.
Assess the materials and equipment you’re currently using on those active projects.
Analyze your paused projects to see what will be required to restart the work, as well as to bring the project to completion.
Take the above pieces of information and measure it against your current inventory of equipment, materials, and more.
Ideally, you want to have enough on hand to not only continue your active projects, but also to restart your paused construction projects.
If your assessment shows that you currently have enough materials for active projects but not enough for paused projects, there are a few ways you can get around this issue:
Work with vendors to get the materials you need (keep in mind, this is dependent on your cash flow, as well as the vendor returning to their normal shipping schedules).
Stagger the paused projects that you can reasonably reactivate (we’ll talk about prioritization steps in a bit).
Create a schedule that allows you to spread your equipment and materials across as many jobsites as possible. Keep in mind that you should use this step only if it won’t compromise the quality of your work.
Consider getting financial help (in the form of small business loans or credit) to build up your inventory so you can reactivate all paused projects.
If your business’s financials look OK, your clients are excited to welcome you back, and you have all the right materials on hand, it’s time to bring your team back to work.
If you had to furlough or lay off any employees during the pandemic, check out our handy guide on rehiring your employees. Make sure you give your employees enough time to wrap up any other work they may have going on; for that reason, we recommend giving them a two-week heads up.
As soon as you start rehiring employees (even if they’re part-time), check over your business insurance policy. You should have workers compensation insurance to cover employees if they get injured on the job.
Additionally, if you’re working with any subcontractors, make sure they have insurance, too.
Bottom line: Don’t let the excitement of getting back to work distract you from making sure that your employees and subcontractors are properly protected while on the jobsite!
We’ve hinted at this topic for most of the article, and for good reason: not every contractor or builder will be able to restart every project that was paused. And that’s perfectly normal, especially for these unprecedented times. Think about it: supply chains are still recovering, clients may have lost jobs (and therefore funding), and you may have had to lay off or furlough some good employees.
So it would be great if you could pick up right where you left off!
There are a few ways you could approach prioritizing which projects you should restart once your state lifts restrictions, like:
Prioritizing the project that could bring in the most cash flow vs. smaller projects;
Restarting projects where you already have the materials and equipment needed vs. projects where you’d have to order materials; or
Working on projects that will take only a few weeks to complete vs. projects that may take several months to complete.
Whatever prioritization method you choose, make sure you fully communicate your schedule to clients and employees who may be impacted by your decisions.
Again, it’s worth being honest here, as your clients may be understanding regarding delays if they’re cognizant of how difficult it may be to get your contracting business up to speed after your state has lifted restrictions.
This may sound like the understatement of the century — especially after a pandemic — but unforeseen risks can throw off even the most carefully planned project schedule. That’s why, even if your state is lifting restrictions and everyone’s getting back to work, you should still try to plan for interruptions to your business, like:
And that’s not even mentioning the usual unforeseen risks that can happen to contractors, like property damage and accidents!
No one is a mind reader, so it’s tough to plan for every risk (after all, there’s a reason they’re called “unforeseen”). But given what we’ve all just been through, it’s worth putting clauses and practices in place that can help protect your work in case something happens.
At the very least, make sure you have some form of contractors insurance to mitigate any risks that could arise from customer accidents, property damage, and claims of negligence.
We wish you the best of luck in getting your contractor business back up and running. Keep checking back to get the latest news and business recovery strategies dedicated to helping you bounce back!
I love writing about the small business experience because I happen to be a small business owner - I've had a freelance copywriting business for over 10 years. In addition to that, I also head up the content strategy here at Simply Business. Reach out if you have a great idea for an article or just want to say hi!
This content is for general, informational purposes only and is not intended to provide legal, tax, accounting, or financial advice. Please obtain expert advice from industry specific professionals who may better understand your business’s needs. Read our full disclaimer
*Harborway Insurance policies are underwritten by Spinnaker Insurance Company and reinsured by Munich Re, an A+ (Superior) rated insurance carrier by AM Best. Harborway Insurance is a brand name of Harborway Insurance Agency, LLC, a licensed insurance producer in all 50 states and the District of Columbia. California license #6004217.