I happened to find a presentation given by an accounting firm that deals a lot in the construction industry and thought I'd share a few of their insights into why some construction companies fail:
Ten Most Common Reasons for Construction Company Failures:
- Growing too fast
- Obtaining work in new geographic region(s)
- Dramatic increase in job size
- Obtaining new types of work
- High employee turnover
- Inadequate capitalization
- Buying dumb stuff (cars, boats, ranches, etc.)
- Poor estimating and job costing
- Poor cash flow
- Poor accounting system