Don’t Be A Construction Industry Statistic

Are you considering starting a construction or remodeling company?  Or are you already in the construction industry as an independent contractor or a small business owner?  If you are in the industry, you might get some strange looks when you tell your friends and family that you are thinking of getting into the trades.  Compared to an office job, construction sites are never ideal and working conditions are always a challenge.  All too often they are too hot or too cold, too dirty, too windy, too wet, too dry…  well, you get it.  They are not climate controlled and conditioned environments that you would find if you got a job in an office building.  They are as one individual has put it – the peacetime equivalent of war.  

Even with the drawbacks that are associated with jobs in the construction industry, there are still a lot of people entering the industry as employees and small business owners. For the foreseeable future the demand for quality companies and skilled tradesmen in the construction industry will continue to grow. Aging infrastructure along with the demand for new roads and structures will continue to place a strain on construction resources.  And until we figure out a way to automate the construction industry, it will take skilled companies and skilled tradespeople who can complete the work to meet the demands.  

3 Reasons why People Join the Construction Industry

There are unique reasons why everyone chooses to enter their profession.  For some, it is because they are second or third generation within their businesses… thanks Mom and Dad!  For others, the choices may be limited due to a depressed economy in the area that they live.  While there are unique issues that impact everyone’s decision, there are also common reasons as to why people choose their professions.

People who choose to join the construction industry for some specific reasons. These apply regardless of whether they are independent contractors or they choose to start their own company or they choose to work for someone else.  They do so for some specific reasons.

The following are three reasons why people choose to join the construction industry:

  1. Money, money, money – There are a lot of studies out there that say that money is not the primary driving force for people making a decision where they will work.  When push comes to shove, money may not be the sole deciding factor as to where someone works.  But, when it comes to the construction industry one of the deciding factors for people being in the construction industry at all is the potential to make a significant income.  Without the potential for a good income, most people would not work under the conditions required to complete the work.
  2. Rewarding Work – Imagine sitting at a computer all day long answering questions and keying in responses. You get to the end of the day and you look back – what did you accomplish?  It becomes harder and harder to determine if you accomplished anything and one day begins to blend into the next.  Construction and remodeling offers those directly involved in  projects a chance to see what they did all day long.  Painters can look back at a room and see how they changed the very feel of the room.  Roofers can look back and see how their newly applied shingles have changed the look of the home from the outside.  
  3. Control Their Own Destiny – Contractors and those working in the construction industry are typically very independent thinkers.  They prefer to control their own schedules instead of “punching a clock”.  Self-employed contractors accept work that they need in order to meet their financial goals.  They have the ability to control their schedules to accommodate vacations, a son or daughter’s sporting event or other responsibility.  They can also work for the amount of money that they want to earn.  If they can sell their services for their intended rate, they get to reap the rewards of their hard work.  

3 Reasons Why Construction Companies Fail

You may be thinking of getting into the construction industry or you might just have jumped in and are learning to swim .  An important statistic to be aware of is the rate of failure for construction companies. According to Statistic Brain as many as 53% of all construction companies fail within the first four years of their start-up. It is not that the owners of these companies start out to fail.  Nobody starts out with the intention of failing.  

A new start-up has a better than one in two chance of failing within the first four years after its start-up.  The odds are definitely stacked against construction entrepreneurs and independent contractors.  

But don’t let the odds scare you away from taking the risk.  The best defense is to be aware of the risk and put steps in place to avoid becoming a statistic. The first step in avoiding becoming a part of statistics is to look at some of the reasons why other companies have failed and put processes in place to avoid those same missteps.  

  1. Cash Flow – you have heard it said to the point where hearing it again will make you sick – cash flow is the lifeblood of the company.  Go ahead get sick, get over it and learn to embrace it.  Without cash flow, the oxygen to the brain of the business is cut off.  The business will suffer – and your startup will help support the statistic shared earlier.  Construct-Ed has a great course on cash flow.  Philip Campbell is a contributing instructor for Construct-Ed and has developed a course – Understanding Your Cash Flow – In Less Than 10 Minutes.  
  2. Safety Risks/Losses – safety is a critical component of the construction industry.  Even if you are working as an independent contractor it is critical.  Individ who are working as independent contractors are exposed to this type of loss as well.  They don’t have any other employees to support them if they should get injured!  Safety and risk management is not only about compliance – it is about learning how to work safe and how to minimize the risk of doing business. 
  3. Lack of Work – the one thing that plagues contractors is the lack of work opportunities.  Most contractors start out working for close family and friends.  They build their reputation and grow their businesses slowly over time.  In order to be successful, contractors have to learn how to generate work opportunities.  This is directly associated with the cash flow of the company.  Without work flow there is no cash flow.


The name of the game in the construction industry is to deliver a good product for a fair price.  Contractors who are looking to add value to their clients by delivering a great product or installation will find success.  Construct-Ed looks to add value to its members by teaching them how to build better businesses and companies.  Whether you are an independent contractor or you are leading a growing company, our courses can help you accomplish your goals!