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How to prevent construction project failure becoming a financial disaster

 

The Queensland building and construction industry has had a particularly difficult time in the last 12 months.

Significant builder collapses have sent ripples through the industry, causing losses exceeding $100 million, and bringing many projects to a standstill. Subbies have suffered losses, builders have lost livelihoods, and bank funding has become more uncertain for developers.

We believe that while problems in business are inevitable, failure is not. When problems arise, directors who delay getting help allow problems to worsen, and place themselves under pressure to make reactive, rather than proactive decisions. Payments are promised and missed, work quality can suffer, relationships are burned. The result of this is collapse and loss to stakeholders that may have been prevented.

Building and construction projects involve a lot of moving parts. It’s a team game, and working collaboratively is the key to achieving successful outcomes. There is plenty of news about failures, but it’s important to remember that most businesses, the ones we don’t read about, are surviving or doing well through good management or by solving problems head on. No one wants to see a business fail and working together with the right team is the best way to avoid it.

We believe we play an important role in helping directors of struggling businesses in the building and construction industry, overcome obstacles and achieve better outcomes. We work with industry professionals – accountants, lawyers, financiers and consultants – to relieve the stress on directors to develop and implement recovery plans. As a result of our experience, we’ve developed this guide to help all sectors of the industry avoid making the next news headline.

Our guide aims to:

  • Start conversations between advisors and clients about ways to strengthen and improve good businesses.
  • Encourage directors to seek early assistance when problems arise.
  • Give directors and advisors a better understanding of the options available to proactively deal with challenges.
  • Reduce insolvencies and the disputes, costs, legal claims (eg. preferences) and substantial losses to business and people that accompany them.
  • Help advisors focus on improved commercial outcomes, knowing the significant losses caused by construction failure.

We believe in a stable and sustainable building and construction industry. This guide represents our team’s knowledge and experience in achieving collaborative solutions for distressed businesses. If you have any questions, comments, or would like to arrange a meeting to discuss your specific situation, please get in touch.

Michael Dullaway, Jarvis Archer and Mark Pearce

 

 

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