By Garry Bartecki – August 28th 2024 – For Construction PROS.com
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.