I’ve seen many
contractors thrive
over time. While
each company
has its own story
and its own
ingredients for
success, I can
pinpoint one common element in all:
they are committed to investing in
crucial resources and to consistently
reinvesting in their companies. The keys
in this process are keen decision-making
and the vision to identify and prioritize
investments based on expected returns
and risks to their businesses. A routine
assessment of a contractor’s strengths,
weaknesses, opportunities and threats
serves as a guide in directing resources.
Thriving contractors direct resources to
developing a niche and establishing a
competitive advantage that may drive
revenue, increase margins, facilitate
operational efficiency or improve the
ability to make timely and accurate
planning decisions in a dynamic
market. Contractors that establish
capital reserves can take advantage
of opportunities to attract new talent,
expand into new markets and improve
project management, estimating and
accounting infrastructure. A contractor’s
ability to accurately identify and
consistently invest in key resources will
drive the company’s success over the
long haul.
Contractors need
to pay special
attention to the
language they
have in their
contracts with
their owners
and with any
subcontractors that they bring on
the job. Insurance policies, especially
general liability policies, follow certain
forms. If the contractual language does
not tie insurance into a contract, there
could be issues where a contractor
would be expected to take care of
something from an indemnification
standpoint that is not insurable.
It’s important to remember that
indemnification doesn’t necessarily
mean that there’s insurance.
The obligations that a contractor has
are usually defined by the contract.
This includes language that refers to
additional insureds, additional named
insureds, to indemnification clauses
and hold harmless agreements.
Contractors need to be sure that their
insurance program will match what
they are agreeing to do. We are now
seeing most insurance carriers taking
particular care to ensure that all of the
necessary insurance is in place for what
contractors signed to owners and what
their subs sign to them.
n
JOSH HAUSERMAN
BOND MANAGER AND
CONSTRUCTION RISK SPECIALIST
HMS INSURANCE ASSOCIATES, INC.
The majority of
small business
owners are highly
skilled at what
they do but may
not be effective
at working on
their business
because they are too busy managing
the day-to-day issues. The number
one thing we discuss with our clients
and prospective clients is their vision:
what the company will look like once it
grows to maturity. Most want to grow
their business to a certain level but are
ineffective at managing this growth;
growing too fast is the number one
reason contractors fail.
Establishing a strong foundation of
accounting controls and procedures
and leadership accountability early
in a company’s life cycle is the way to
manage growth. Timely and accurate
financial information gives management
the necessary tools to make smart
financial decisions. Management by
exception reports allow owners to
identify and correct problems before
they become larger issues. A strong set
of financial statements will also help a
company with its banking and bonding
relationships and allow it to increase
access to capital as it grows.
JEFF LAVORE, CPA
MANAGER
LANIGAN, RYAN, MALCOLM
& DOYLE, PC
JOSEPH R. WOLF
SENIOR VICE PRESIDENT
COMMERCIAL & CORPORATE GROUP
ALLIANT AMERICAS
What one piece of advice would you give to construction executives
who want to ensure that their own businesses will thrive?
16 Building Washington
