Ten Most Common Causes of Contractor Failure

Posted on

CFMA Article written in 1986 by Robert Davidson and Danny Parrish

In a presentation to our construction industry niche group, Robert Davidson presented his top 10 list of the most common causes of contractor failure. They are as follows:

  1. Poor bidding and estimating – not knowing “true job cost”
  2. Growing too fast
  3. Catastrophic job loss – excessive single-job risk
  4. Obtaining new contracts outside of your experience, expertise or region
  5. High employee turnover and inexperienced workforce
  6. Inadequate capitalization and poor cash flow (not a job loss, just ran out of money – “can’t make payroll”)
  7. Excessive litigation, claims, or legal issues (including safety issues)
  8. Poor accounting system and job costing – bad scorekeeping!
  9. Subcontractor (non-bonded) or supplier failure (price/supply)
  10. Buying dumb stuff

About BMSS

BMSS Advisors & CPAs was established in 1991 with the vision of creating a CPA firm that would provide peace of mind for its clients while sustaining a healthy, happy culture for its employees. As this dream has been realized, BMSS has grown to become one of the Southeast’s top advisory and accounting firms, now with eight offices throughout Alabama and Mississippi.

The CPA firm specializes in several industries, including (but not limited to) manufacturing, wholesale distribution, construction, technology, nonprofit, and government contracting. In addition to tax planning, compliance and assurance services, the firm boasts a robust business advisory practice area which includes transaction advisory, valuation, client accounting solutions, and CFO advisory services. BMSS also specializes in state and local tax, estate planning and employee benefit plan audits.

See more articles from BMSS

Contact Us

Name
This field is hidden when viewing the form

Local Firm. National Knowledge. Global Reach.

Get In Touch