Building business resilience in a boom.

Business resilience is the capacity of your business to respond to changes in business conditions.

A boom in economic activity brings with it risks and opportunities, an immediate impact of an economic boom can be:

  • an increase in new work, whether from new opportunities and clients or from greater success with existing clients.

  • a hire rate of staff turnover. Key personnel can be lured by new opportunities and skilled personnel becomes scarce.

  • materials and plant can become harder to find and rates can move significantly.

Strategies can include;

  • set objectives and targets for the structure and condition of your business at the end of the boom; debt, work portfolio; clients and jobs. What is the long term sustainable size of your business.

  • improving tender/quotes/estimate processes to ensure you are selective regarding your job portfolio. Ensure you consider possible resource and capability challenges.

  • Increase your capability incrementally, where possible expand without over extending your capacity; for example in a plant heavy operation use 60:30:10, own 60% of plant, longterm hire 30% (subcontract or dry hire) and short term hire 10%.

  • Use third party plant hire rates in estimates rather than internal plant recovery rates.

A boom should be an opportunity to work for greater return and deliver a more resilient business. Unfortunately some business will work hard for less and find themselves vulnerable when the boom ends.