646: Insights For Small Construction Business Owners Post-Disruption

This Podcast Is Episode 646, And It's About Insights For Small Construction Business Owners Post-Disruption

The past few years have been challenging for small business owners everywhere. For contractors, the global disruptions—pandemic shutdowns, supply chain bottlenecks, labor shortages, and inflation—hit especially hard. Projects were delayed, material costs spiked overnight, and cash flow felt like a rollercoaster.

 

If you’re a small construction business owner, you’ve lived through it. And while it’s been painful, it’s also been a powerful teacher. As construction bookkeeping specialists, we’ve had front-row seats to see how disruptions shook contractors and what strategies helped them survive—or even thrive—despite the chaos. 

 

Here are the key lessons learned from global disruption that every small contractor should carry forward.

 

1. Cash Flow is King

When the world turned upside down, it wasn’t just about profits on paper—it was about cash in the bank. Contractors who had substantial cash reserves or disciplined systems for separating money (using methods like Profit First) were able to weather late client payments, supply delays, and unexpected expenses.

Those who ran lean with no buffer struggled the most. Many relied on credit cards, lines of credit, or personal savings to keep projects moving.

Lesson: Always budget with a cushion. Build a reserve fund equal to at least two to three months of operating expenses. Cash flow isn’t a luxury—it’s survival.

2. Material pricing can change overnight

Lumber tripled in price. The costs of concrete, steel, and copper spiked. Even basic items like drywall screws saw shortages. For contractors who bid on jobs months in advance, these increases wiped out their profit margins.

The most resilient contractors learned to:

• Add price escalation clauses in contracts.
• Limit the validity period of an estimate.
• Communicate openly with clients about material volatility.
  
  

Lesson: Build flexibility into your pricing. Protect yourself in writing from market swings you can’t control.

 

3. Diversification builds stability

Some contractors relied heavily on one type of work, such as extensive remodels or commercial tenant improvements. When those markets slowed during lockdowns, their revenue disappeared. Others had more diversified income streams—such as small service calls, maintenance contracts, consulting work, or digital products—and were able to pivot.

Lesson: Don’t rely on one type of project or client. Diversify your work mix so when one stream slows, another sustains you.

4. Relationships matter more than ever

When suppliers had limited stock, who got the materials first? The contractors have strong, long-standing relationships. When crews were in short supply, which subs stuck around? The ones treated fairly, paid promptly, and respected.

Lesson: Invest in your relationships. Pay suppliers and subs on time. Be transparent with clients. In times of disruption, trust and loyalty can save your business.

5. Technology isn't optional anymore

The pandemic accelerated the adoption of technology across the industry. Contractors who relied only on paper receipts, hand-written invoices, or in-person meetings found themselves at a standstill. Those using cloud-based bookkeeping, project management apps, digital invoicing, and video calls continued to move forward.

Lesson: Adopt technology before you “need” it. Utilize digital systems for bookkeeping, estimating, contract management, and communication. It’s not about replacing personal touch—it’s about being adaptable when disruptions happen.

6. Lean teams are resilient teams

 

Many small contractors discovered they were carrying extra overhead—unused office space, underutilized vehicles, or administrative costs that didn’t directly produce profit. During global disruption, reducing the crew to essentials, subs, and systems made survival possible.

Lesson: Know your actual costs and eliminate waste. A lean operation is easier to sustain through downturns and easier to scale when demand returns.

 

7. Communication is your strongest tool

 

One of the biggest frustrations during disruption was uncertainty. Clients wanted updates. Subs wanted to know if they’d be paid. Suppliers were vague about delivery dates.

Contractors who communicated clearly—even if the news wasn’t good—earned respect. Those who stayed silent or overpromised quickly lost trust.

Lesson: Make communication a priority. Share updates often and honestly. It builds confidence, even when circumstances aren’t ideal.

 

 

8. Mental health and burnout are real

 

Global disruption didn’t just strain finances—it strained people. Many contractors burned out from trying to keep jobs going under impossible conditions. Some worked longer hours to break even.

Those who emerged stronger learned to set boundaries, delegate, and take care of themselves as much as they did their businesses.

Lesson: You can’t build a sustainable business if you’re running on empty. Take time to recharge. A healthy owner leads a wholesome company.

 

9. Long-term planning beats short-term panic

 

Disruption exposed those who were running their business reactively and those who had systems in place for long-term stability. Contractors with business plans, financial tracking, and clear goals were able to make adjustments without losing direction. Those who made decisions only in the heat of crisis often compounded their problems.

Lesson: Develop a Long-Term Strategy for Your Business. Even if the world shifts, you’ll have a framework to guide your choices.

 

10. Adaptability is a competitive advantage

 

Perhaps the biggest lesson? The contractors who survived weren’t always the strongest or the biggest—they were the most adaptable. They adopted new ways of working, revised their bidding process, experimented with various marketing approaches, and weren’t afraid to adapt their business model.

Lesson: Stay flexible. The ability to pivot quickly is more valuable than size or experience.

 

Final thoughts

Global disruption has left scars on the construction industry, but it has also left lessons that we can’t ignore. For small contractors, the takeaway is clear:

• Protect your cash flow.
• Write airtight contracts.
• Diversify your work.
• Invest in relationships and technology.
• Prioritize communication and your own well-being.

Disruptions may come again—whether global or local. But the lessons you’ve learned now can make your business stronger, more resilient, and more profitable in the long run.

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About The Author:

Norhalma Verzosa is a Certified Construction Marketing Professional and serves as the Web Administrator of Fast Easy Accounting, located in Lynnwood, WA. She holds a Bachelor's Degree in Psychology and is a Certified Internet Web Professional, with certifications in Site Development Associate, Google AdWords Search Advertising, and HubSpot Academy. She manages the entire web presence of Fast Easy Accounting using a variety of SaaS tools, including HubSpot, Teachable, Shopify, and WordPress.