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How Will The Coronavirus Pandemic Affect my Construction Business?



How the world has changed in a few short weeks. It’s March 20th 2020 & less than a month ago I was on holiday, relaxing & planning the year ahead. I never in a million years expected events to escalate & deteriorate so quickly in the UK & largely around the world.


I have had many business owners get in touch with me, from builders, electricians, landscapers who are concerned about what impact the coronavirus (covid-19) will have on their business for the short, medium & long term.


I am not going to sugar coat this, there will be a significant impact on the construction industry(and most industries) but it’s not a time to panic, it’s a time to prepare and reinvent. Over the upcoming weeks you will be hearing a lot from me as I try and guide you through this as much as possible to reduce the impact on your business.


For today though, let’s look at the short, medium and long-term impact this is likely to have and what positive action you can start taking today.

Short Term


I am hearing already that new enquiries for planned works have come to a halt. It is very unlikely clients will be giving large deposits for home extensions, lofts or refurbishments at the moment until things stabilise as they will be unsure what is happening with their own jobs/business.


The first thing I would recommend is to cut back on online advertising for this type of work as it will not be productive in the short term.


However, there is still a need for reactive works to be carried out and this is where you need to focus your attention on to get you through the short term and try and hold on your team of workers.

Boilers do not stop breaking down, electrical items do not stop breaking, roofs that leak need to be fixed, for the short term this is where you may need to turn your attention to keep your workers busy and you making some sort of profit.


This is a time to think outside of the box. Are you in an area or could you travel to one of the areas where they had all of flooding’s recently? Those properties will need repairing. Could you do work for insurance companies? Will your local hospital need repair works? The supermarkets? Look at all the businesses that are NOT going to suffer through this pandemic and try and get business from them.


You may simply assume that these businesses already have a construction company in place and likely they do. However, just as you will, many businesses will not be able to carry out their works when staff start self-isolating and they will need a construction company to step in and take over. It’s important that they know you are the business they can turn to.


If you have a full order book, it may well be business as usual. However, there will still be an immediate impact on your workforce. Staff self-isolating will likely impact on you over the coming weeks when they or family members display symptoms. Children are now off school so your staff may have childcare problems & need to take time off to resolve.


So even if you have a full order book & it’s business as usual, there will be an immediate impact on your staff productivity and therefore your financial turnover. This is something you will need to forecast for immediately.


Your clients may also be worried about having you in their houses, so think seriously about educating your staff on avoiding the spread of germs by following government guidelines i.e. hand washing etc. You may want to start equipping your staff with protective masks & overalls too if you are in close vicinity of the public. This measure would help reassure your clients that you are not going to be spreading the disease inadvertently.


Are you on top of your invoicing and cash flow? If you are due a payment, make sure you have sent the invoice, if a payment is past is due date, you need to chase it. As the weeks go on more of your clients will hit financial difficulties which will then mean late or no payments, so it’s important you do all you can to be on top of this.

What happens if you have to self-isolate? USE YOUR TIME WISELY. It is time to do a full evaluation of your business and start tightening up on the areas that you are lacking on.



Medium Term


Without a doubt, the next 3-6 months are going to be the most challenging we have ever faced. The construction industry has been through some tough recessions, but we have never faced a crisis like this.


I would expect builder’s merchants to start having staffing problems & most likely cash flow issues in the next few months, as companies stop or delay paying their accounts due to their own cash flow problems. You may start to see requests for upfront payments for materials to be delivered.


Specialist production items are likely to have lead times increased as factories shut or minimise their workforce. Bear in mind China is still in lockdown, so many items produced there will start to go out of stock completely in the medium term until they get back on their feet.


Companies coming into this crisis on an already poor financial footing will start to go bust & that will knock on to tradesmen being unpaid, further worsening their dire situation. If I was a tradesman or construction company at this time, I would strongly avoid allowing large debts to build up with one company. You really need to protect yourself & limit your exposure to being ‘knocked’.


That being said, if your clients are reputable companies or affluent homeowners then there may not be any issue at all. You may well breeze through this period relatively unscathed. You may even find it’s easy to find decent trades people as many could be looking for work in the medium term.



Long Term


The construction industry is resilient, it is vital and cannot be replaced. Whatever happens consumers will always need things fixed, extended & will start to undertake new projects. People will always need to live in homes.


There will be many projects that will have been cancelled in the short term that will now be looking to start again once confidence is back. You could be in a prime position to win those contracts.


There will be excellent staff available that could be picked up from rival companies.


You personally cannot control the coronavirus and the damage that it will create.


How you come out of this in the long term, will really depend on the actions you take now to prepare & protect yourself & ensure your company has the cash flow to get through this. If you can tighten things up in this period, you will be there when it rebounds.


Now is NOT the time to sit back and see what happens. You must take action right away.


I am going to be talking about this and many other things to help you weather the storm in the upcoming weeks so make sure you are following me on Facebook/twitter/LinkedIn and/or Instagram so you can keep up with the advice.

For now, most importantly please keep safe & follow the government guidelines for your health & well being.

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