b'ACCOUNTING COLUMNSTAYING COMPETITIVE IN UNCERTAIN TIMESH O WT O B O O S T E F F I C I E N C I E SA N D P R O F I T I N R E A L E S TAT EA N D C O N S T R U C T I O N BY JESSICA GRANTHAM, PARTNER, MNPhe 2023 economic landscape hasday-to-day work and decision making. This Slow industry movement: The T introduced many new challengesconstruction industry is moving at ashifts responsibility from team members to the real estate and constructionslower-than-average pace due to factorsonto higher level managementand industry, including slow industrysuch as lagging approval times anddecreases enterprise value by tying the movement, impacts of high interest ratesskilled labour shortages. operations of your company to only a few and talk of a looming recession. So how cankey figures in your business.you position your construction business toHigh interest rates: Many companiesremain competitive and profitable duringare struggling to keep up with debtDecentralizing decision making will enable these uncertain times? paymentsand some are nearing highyour business to make decisions quickly risk levels for insolvency. and increase its value. You can get started Lets review the emerging trends weveby implementing processes and systems seen in the industry in 2023 and the fourNew investments in construction:that place responsibility and accountability for outcomes at the right level insteps you can take to face these challenges,Significant investments in housing,your hierarchy.improve performance and achieve success. infrastructure, municipal, industrial and other segments are providing businesses in the construction industry with new2. De-leveraged debtWHAT EMERGING TRENDS opportunities in 2023. It is essential to pay off your debt quickly ARE IMPACTING THEin a high interest rate environment to CONSTRUCTION INDUSTRY? maintain profitability. You can get started HOW CAN YOUR CONSTRUCTIONby building tools to forecast your cashflowncreased costs and lower EBITDAfor a minimum of 12 to 16 weeksor I BUSINESS IMPROVE ITS margins: Companies are experiencingthree to four billing cycles.increased costs to run day-to-dayPERFORMANCE?business operations, which is erodingWhile the current landscape poses manyCashflow forecasting will help you margins and profitability. challenges for construction businesses,proactively prepare for the future by there are steps your business can take toallowing you to predict how much money Consolidation of suppliers: Someimprove performance in the months ahead.will enter and exit your business, where it issuppliers have gone out of businessCompanies that have remained profitablecoming from and whether you may need to due to increased costs and supply chainand successful share four key characteristics: use your line of credit to make up for any complexity. Work is now flowing intopotential shortfalls.the remaining sub-suppliers, who may1. Decentralized operationsnot have the capacity or resourcesMany leaders in the real estate andInvoice projection and creation systems needed to handle more business. construction industry are highly involved incan also help maximize your invoicing on INDUSTRIAL - COMMERCIALTWIN RIVERPlumbing & HeatingGeneral Contracting(1985) Co. Ltd.Construction ManagementCRAIGMAINProject Management Business Leasehold ImprovementsA proud 50 year member Commercial - Industrial Projects 227 Leigh Road, Kamloops, BC V2B 2L72355PleasantValleyRoad Residential - Custom HomesCell:250-550-5754Box546,Armstrong,BCV0E1B0 Phone:250-546-9551 MARK HENNING Bus: 250-376-0221Phone (250) 546-9551lFax (250) 546-8900 President Fax: 250-376-7249Email:cmain@maddocksconstruction.com Fax:250-546-8900email info@maddocksconstruction.com Email: mark@trph.caCell: 250-318-883722 SOUTHERN INTERIOR CONSTRUCTION ASSOCIATION'