Reason of Construction Failure
Reason of Construction Failure

6 Key Reasons for a Construction Company’s Failure


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Even the most successful construction company went through the risk of failing. It’s a normal part of any business. The Small Business Administration previously revealed the surprisingly high failure rate among startup companies. The report revealed that around 20 percent of companies in the U.S. failed in their first year of operation while 50 percent flopped within their first five years.The construction industry is in an even more unfortunate position. Over 60 percent of the U.S. construction companies were said to have closed down within their first five years of operation. These companies reportedly blamed several factors for their failure, including labor shortage, politics, insurance, taxes, natural disasters, and subcontractor incompetence.

But looking into the root cause of the problems, one will realize that the real factors that brought about a construction company’s failure are internal and within the owner’s control. The real reasons? They are more likely because of poor planning, inaccurate builder schedule, hiring the wrong people, inability to innovate, and unskillful project managers, among many others.

The good news is that the new generation of construction businesses can learn from their forefathers’ mistakes and avoid falling for the same reasons. And that is what we’re going to look into this article.

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