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May 05, 2005
Project Risk in Construction
Some young construction contractors dispute the risk factors that banks, sureties and others assign to construction projects. He just doesn't believe that the risk is there. The confidence which the youthful contractor shows is needed if he is to weather all the ups and downs of this business. However, risk in construction is a given. In any town in the United States, there is a local story of a bankrupt contractor.
A Contractor's Risk on a project is caused by two potential events.
1) Unaccepted work by the client
2) Higher than estimated project costs
Most contractor's project defaults generate from these two sources. Sureties, banks and investors know these risks and take conservative financial approaches to manage them.
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This and other management information are part of our 300+ page book - to be published September 27, 2006 by McGraw-Hill Inc. "Managing a Construction Firm on Just 24 Hours a Day”. It includes 170 best Practices Used in Construction Contracting with over 100 illustrations and examples. We include a Free CD of 60 Excel Templates when you buy 1 book from our website. We also include our library of forms.
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Matt Stevens is a management consultant who works only with construction contractors. He has performed training and business consultation for the contracting community since 1994. Matt can be reached at mstevens@stevensci.com.
Posted by Matt Stevens at May 5, 2005 02:32 AM
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Comments
I've managed to save up roughly $88788 in my bank account, but I'm not sure if I should buy a house or not. Do you think the market is stable or do you think that home prices will decrease by a lot?
Posted by: Courtney Gidts at March 7, 2006 06:18 PM