It might be hard to imagine how building and trade companies could struggle in the midst of a building boom.
But 221 companies were reportedly liquidated in the 12 months to March 30 as a result of being unable to pay their bills, largely due to the length of time they had to wait for payment from customers. So what is happening in these companies? Is it finance that's let them down? Bad workmanship? In my experience, the most common pitfalls builders and tradies face are the following.
Not knowing your worth. A lot of builders I see undercharge or don't charge for their work appropriately.
This can especially be the case in housing/building contracts in group housing. Most likely you are paid by the square metre so check your rates and see what others are paying and getting for their contracts. Pay attention to the detail to see what the fine print includes that you need to provide. Little things such as nails and mileage add up.
Not getting progress payments to help cashflow. I've seen a few tradies enter into contracts and not bother to work on a progress payment schedule. If you're hiring staff to complete a contract, not receiving payments will eat away at your cashflow.