Planning For Circumstances Out Of Your Control
When it comes to mitigating risk, it is essential that you work with a professional and experienced organization. Our business professionals are experts at identifying and planning for risk that you might not consider significant. The conditions under which you do business are always affected by outside forces over which you have little to no control. If you are not prepared to handle that type of risk, then you could be out of business in a hurry.
Shopping malls were hot commodities in the 1980s and 1990s and made up a large percentage of all of the commercial construction that was done. The need for shopping malls became so significant that hundreds of construction companies popped up that were created solely to serve the mall building appetite of the American public.
As technology kicked in and the Internet started to get involved in the retail industry, the need for shopping malls dropped off almost overnight. Consumer trends had shifted to online shopping, and developers stopped planning for the construction of new malls. The companies that took on the risk of serving only the mall construction industry suffered, if they did not have a risk contingency plan in place.
If your construction company is at the mercy of consumer trends, then you need to plan for the time when those trends change. Home builders need to be ready for the day when smaller homes are more in fashion, and utilities construction companies have to be prepared for the day when alternative energy solutions are more popular than traditional power plants.
Let’s say you win a project that starts in June of the year, and you make plans to get the project going on time. It is a large project which will take you into at least February of the following year, so you plan accordingly. Then the state where you are working in decides to alter construction laws that disrupt your planning and threaten to add thousands of dollars to your budget.
Political changes are not usually figured into a construction company’s risk planning, unless that company is using a professional risk management organization. Anything can happen in the world of politics, and your business must have risk contingency plans in place to make sure that you survive the changes in the political winds.
Whenever it is possible, we always recommend that our construction company clients discuss their plans with the neighborhoods where they will be working to avoid any issues. Once a project gets underway, any changes could cost the company a lot of money. If the people living and working near the project take exception to something the construction company is doing, that could cause the local government to force changes in the company’s methods.
These changes can become extremely expensive, and that is why it is best to reach out to neighboring homes and businesses before a project starts to avoid unpleasant surprises when the project gets underway.
Sometimes risk is simply out of your control, but that does not mean you should avoid planning for it. A professional risk management company will help you to avoid the kind of financial disaster that can strike when you are not prepared for circumstances that are out of your control.