Why do Construction Companies fail
Running a construction Company successfully is not easy. The industry is full
of risks & challenges, which can sometimes lead to failure. According to the
US Department of commerce, contracting & construction businesses have
the highest failure rate than any other business.
1. Investment & working capital
Construction companies require huge capital to run the business. A large amount of capital is invested in fixed assets like tools, heavy equipment, vehicles, and more. Not having enough capital for investing in fixed assets is one of the reasons for the failure of construction companies. At times construction companies do not have enough working capital & reserves to overcome the expenses & unexpected losses which turn out to increase in liabilities.