SlideServe
Télécharger Obtenir Pro
Menu
Accueil Pro
Préférences
ApparenceLight Aide et commentaires
© SlideServe · v2026

Understanding Contractor Failure: Key Risks and Tips for Success in the Construction Industry

fayre avatar
fayre
29 diapositives · 411 Views · Sep 08, 2014

Between 1989 and 2006, contractor failure rates in the U.S. were significantly influenced by factors such as insufficient capital, high material costs, and inadequate management. Many contractors face risks including low profit margins, slow collections, and issues arising from unrealistic growth expectations. Warning signs of trouble include tight cash flow, poor project management, and inadequate financial oversight. This guide highlights the reasons behind contractor failures and offers actionable tips for both contractors and owners to navigate challenges, ensure compliance, and maintain a successful business.

#understanding contractor failure: key risks and tips for success in the construction industry #understanding contractor failure: key risks and tips for success in the construction industry ppt #powerpoint #presentation
Understanding Contractor Failure: Key Risks and Tips for Success in the Construction Industry - slide 1
01 / 29Understanding Contractor Failure: Key Risks and Tips for Success in the Construction Industry
1 / 17

Télécharger la présentation

Understanding Contractor Failure: Key Risks and Tips for Success in the Construction Industry
Une image / un lien ci-dessous est fourni (tel quel) pour télécharger la présentation

Politique de téléchargement : le contenu du site vous est fourni TEL QUEL pour votre information et votre usage personnel ; il ne peut être vendu, concédé sous licence ni partagé sur d’autres sites sans l’accord de son auteur.Le contenu vous est fourni TEL QUEL, pour votre information et votre usage personnel uniquement. Téléchargez la présentation en cliquant sur ce lien. Lors du téléchargement, si vous ne parvenez pas à télécharger une présentation, l’éditeur a peut-être supprimé le fichier de son serveur.Pendant le téléchargement, si vous ne parvenez pas à obtenir une présentation, le fichier a peut-être été supprimé par l’éditeur.

F I N

Plus de contenu associé

Transcription de la présentation

  1. WhyDo Contractors Fail?

  2. Failure Rates Source: US Census: 1989-2002 Business Information Tracking Series

  3. Failure Rates 2002 - 2006 Failure Rates 2002 – 2004 2004 - 2006 Trade Contractors 29.0% 24.4% Heavy Highway 27.4% 21.6% Nonresidential Bldgs 25.0% 17.5% Industrial 24.6% 14.6% Source: BizMiner

  4. Failure Rates

  5. Surety Losses & Profitability

  6. Prequalification Financial Statements Capacity Organization References Credit History Banking Relationships

  7. Contractor Failure Risks Low profit margins Onerous contracts Slow collections Unreasonable owners RISK Insufficient Capital High Materials prices Shortage of qualified, skilled workers

  8. Contractor Failure Risks Inadequate Management New Owner Change in Scope of Work Over Expansion RISK Sub Failure Materials Shortages Inclement Weather

  9. Contractor Failure Accounting issues Management issues Personnel issues Performance issues Failure Unrealistic growth

  10. Accounting Issues • Inadequate cost tracking systems • Estimating or procurement problems • Underinsured • Improper accounting practices

  11. Management Issues • Leadership changes • No continuity plan when key person dies or becomes disabled • Changes in scope of business

  12. Personnel Issues • Key staff leave company • Character issues

  13. Performance Issues • Unrealistic growth • Change in type or scope of work • Poor project selection • Onerous owners • Unsettled claims & change orders

  14. Shorter Lead Time Increase in Backlog Work Unrealistic Growth Unrealistic Growth

  15. Factors Beyond Control Economic Downturn Inflation Failure Weather Delays Site Conditions Labor Difficulties Materials Shortages

  16. Warning Signs That a Contractor Is In Trouble...

  17. Ineffective Financial Management System • Tight cash flow • Slow receivables • Past due bills • Vendors demanding cash

  18. Bank Lines of CreditConstantly Borrowed to Limit • All credit fully secured • Lines not renewed

  19. Poor Project Management • Inadequate supervision • Not getting best prices • Projects behind schedule • Claims • Litigation

  20. No ComprehensiveBusiness Plan • No contingency plans • No “road map” • No goals • No objectives

  21. Poor Estimating & Job Cost Reporting • Revenue & marginsdecrease • Continued operating losses • Loss of bonding capacity • Bid jobs too low

  22. Communication Problems • Disputes between contractor and owner • Poor communication from field to management

  23. Loss of Loyal Customers • Decreasing reputation for company’s ability to perform contracts on time & within budget

  24. Tips for Contractors To Avoid Default • Rights & responsibilities • Capabilities • Growth & overhead • Causes & warning signs • Communication Contractors

  25. Tips for Contractors To Avoid Default • Contract • Bond forms • Qualify surety • Qualify owner • Surety Relationship Contractors

  26. Tips for Contractors To Avoid Default • Construction-oriented CPA • Adjust overhead • Bank credit • Conserve capital • Bond subcontractors Contractors

  27. Claims Expectations Rights Obligations Resolution Completion

  28. Tips for Owners – Navigating a Claim • Understand bond • Cooperate • Comply with contract • Don’t overpay • Lien waivers • Timely default • Termination Owners

  29. For More Information Surety Information Office 1828 L St. NW, Suite 720 Washington, DC 20036 202-686-7463 | Fax 202-686-3656 www.sio.org | sio@sio.org