Surviving Tough Times in Construction: Lessons From An Expert

The construction game isn’t for the faint-hearted, especially with all the ups and downs we’ve faced recently. The boom during COVID felt like winning the jackpot, but now, for many builders and tradies, things have slowed down, cash flow’s tight, and it’s getting harder to find solid leads.

We recently sat down with Mick from Builders Business Blackbelt to chat about how tradies can survive (and even thrive) in these tough times. Mick’s no stranger to the challenges of running a construction business, and in this session, he shared some absolute gold on how to stay ahead of the curve, keep your pipeline full, and build a resilient business. Here are the key takeaways.

Watch the full webinar here.

Know Your Capacity (And Stop Chasing "More")

Most tradies fall into the trap of always chasing “more” work. It sounds good in theory, right? “Make hay while the sun shines.” But Mick made a solid point: If you’re not clear on your business capacity – how many jobs you can actually handle – “more” can lead to chaos. Too much work and suddenly you’re overloaded, stressed, and at risk of letting down clients or burning out your team.

Here’s what Mick suggests:

• Break it down. What’s your ideal mix of work? How many big dream jobs, bread-and-butter projects, and smaller filler jobs do you need to stay full for a year?
• Stick to your plan. Balance your workload so you’re delivering top-quality work without pushing yourself or your team to the limit.

Knowing your limits isn’t about saying “no” to work – it’s about saying “yes” to the right mix of jobs that keep the cash coming in and the stress at bay.

Don’t Stop Marketing (Even When You’re Busy)

One of the biggest mistakes tradies make is putting marketing in the “too hard” basket when work is flowing. But as Mick said, marketing is like a hot water tap – turn it off, and it can take ages to get the hot water flowing again.

Even when your calendar’s packed, you’ve got to keep marketing. Why? Because when the work dries up, you’ll already have leads waiting. Mick gave this tip:

• Set a marketing budget. Use the Profit First method (more on that below) to allocate a percentage of your income to marketing, and treat it as a non-negotiable.

Profit First: A Game-Changer for Financial Management

Cash flow problems are one of the biggest killers for building businesses. You’ve probably been there – you finish a job, the client pays, and suddenly it feels like you’ve got cash to burn. But then the bills come, and it’s back to square one. Mick swears by the Profit First system, which flips the usual way of running your books on its head.

Here’s how it works:

1. Set up separate bank accounts for income, profit, tax, owner’s pay, and operating expenses.
2. When money comes into the income account, divide it up into these accounts on set dates (e.g., the 10th and 25th of the month).some text
   • Start small – even 1% into profit is a win.
   • Pay yourself first – don’t just scrape by.
3. What’s left in the operating expenses account is what you have to work with.

This system forces you to plan ahead and avoid the temptation to spend money that’s already earmarked for other things. Mick reckons it’s one of the simplest ways to stop living from job to job.

Small Jobs = Big Opportunities

Ever turned your nose up at a smaller reno or repair job because it felt like a waste of time? Mick says these “filler jobs” can be absolute gold for testing new systems, workflows, or processes.

Think about it – if you’re trying out a new software or scheduling system, wouldn’t you rather work out the kinks on a $10k job than a $1.2m custom build? Smaller jobs are the perfect training ground to refine your processes, so when the dream jobs roll in, you’re running like a well-oiled machine.

Build Resilience: Prepare in the Good Times

The COVID boom was a wild ride, but now we’re seeing the flip side – liquidations are at record highs, and cash flow issues are rife. Mick put it bluntly: Resilience isn’t about luck. It’s about preparation meeting opportunities.

To build a resilient business:

• Invest in solid financial systems when times are good.
• Never stop marketing.
• Keep your pipeline balanced with the right mix of jobs.

If you’re relying on the next job to pay for the last one, you’re already on shaky ground. Planning ahead is the key to staying steady.

Labour Shortages: It’s All About Relationships

Finding and keeping good tradies has been an uphill battle, but Mick says the best way to hold onto your team is to treat them well. It’s not just about paying top dollar (though that helps); it’s about showing respect, recognising their efforts, and making them feel like part of the team.

A few tips:

• Be open and honest with your subcontractors.
• Support them by sharing tips on better systems or processes.
• Give them a pat on the back – a little appreciation goes a long way.

Good tradies are hard to come by, but if you treat yours right, they’ll stick with you even when times are tough.

Final Thoughts

Tough times aren’t easy, but with the right systems, mindset, and preparation, your business can come out stronger on the other side. Whether it’s using Profit First to get your finances sorted, keeping your pipeline full with the right mix of jobs, or investing in your team, small changes can have a massive impact.

If you’re keen to dive deeper into any of this, Builders Business Blackbelt has some awesome resources like their scorecard tools to help you figure out your next steps.

Keep your chin up, keep learning, and keep moving forward. Tough times don’t last – but smart, resilient tradies do.