New Book Focuses on Contractor Survival vs. 70% Failure Rate
July 18, 2007 Business News(PRLEAP.COM) A new book on the market published by RSMeans can help new or struggling construction contractors beat their industry’s high failure rate says Nick Ganaway, author of Construction Business Management: What Every Construction Contractor, Builder & Subcontractor Needs to Know. The book discusses what every contractor must know to set up and run a construction firm that will not only survive the high-risk early years but endure throughout the owner’s business career and beyond, says Ganaway, a commercial contractor for 25 years. Ganaway, citing a sobering study by the U.S. Department of Labor’s Bureau of Labor Statistics, says there’s tremendous risk in construction, but that it can be managed.
The BLS report by researchers Amy E. Knaup and Merissa C. Piazza is based on business enterprises in ten major industries that began operations in March 1998 which they tracked through March 2005. Among their findings: 57% of new construction firms are no longer in business by the end of their fourth year in business and 70% have failed by the end of seven years. Only the information industry fared worse than construction.
“Construction is pretty easy to get into.” Ganaway said. “An ambitious project manager who has made some money for the company he’s been working for may decide to do it on his own. But it’s not long before he realizes you can be the best project manager in town and still not know what you need to know to run the business of construction in its entirety. That’s where the high failure rate comes from,” he added.
Ganaway said contractors can learn more about his book and also get free information and ideas at his website, www.ConstructionBusinessManagement.com.
The failure rate reported by BLS translates into large real numbers, considering the magnitude of the construction industry. According to a report by Kenneth Simonson, chief economist of the trade group Associated General Contractors of America, construction provides jobs for 7.7 million employees, or about 5% of the total workforce in the U.S., and accounts for 9% of the nation’s gross domestic product. The average construction firm had only eight employees, and 91% of construction firms had fewer than 20 employees, Simonson reported.
Ganaway, whose former construction firm still operates under his name, said he likes helping contractors who may have some concerns about their construction business during the first few years to get their feet on the ground. “I took risk I didn’t even know I was taking in those early years—starting fires faster than I could put them out,” he said. “It doesn’t have to be that way.”
Note to editors:
Nick Ganaway, a commercial general contractor for 25 years, owns Construction Business Management, LLC, and is author of Construction Business Management: What Every Construction Contractor, Builder & Subcontractor Needs to Know. Ganaway lives in Atlanta, GA, and may be emailed at email@example.com. Telephone 770-394-7291. Website www.ConstructionBusinessManagement.com.