Businesses face challenges all the time. Some challenges are industry specific while others are general. The building industry, just like any other industry, faces challenges that are unique to it as well as others that affect all industries. As time passes, new challenges emerge, forcing companies to adapt or exit. Companies in the building supplies industries have to be aware of the major problems in the industry in order to come up with solutions that would shield them. The various problems affect a company’s ability to generate income, grow and stay afloat. Inability to manage these problems would inadvertently lead to failure. It is thus very important that businesses pay keen attention to these problems that plague the building materials industry.
- Inability to Build Online Presence
Times are changing. As times change, so does technology and customer needs and preferences. One recent development is the emergence of online businesses. Many businesses are building an online presence. Companies are investing in developing facilities to enhance online businesses. Most industries are taking advantage of this trend as businesses open online stores. More consumers are shifting their transactions online. The online platforms allow customers to view many products at their own convenience. They can even compare different products from different businesses.
For most industries, meeting the ever-changing needs of the modern customers has become an important part of business. However, most of the companies in the building materials industry are still stuck in the old mindset. They still rely on traditional selling techniques. While some of these techniques, such as personal sales calls may work, their effectiveness is fading. Building an online presence holds the key to the future of sales. Thus, it is necessary for you to invest in building an online presence for your business. That will help increase your visibility and enhance your brand and product awareness. That will result in greater results, improving revenue generation.
- Inadequate Investment on R&D to Develop New Products
Most companies that are able to take advantage of opportunities in the market invest heavily in research and development. Such investment allows a company to monitor trends in the market to know the changing needs of consumers. Most industries are very competitive in the area of research and development as the companies try to outdo each other in launching new products. However, for the building supplies industry, there is rarely competition to develop new products. The industry maintains the same or a similar inventory of products as it has for many years. Most companies invest very little in R&D. However, there is need for the building materials companies to rethink their product strategies. They need to pay more attention to the changing needs of different types of builders. An investment in R&D would enable them understand the difference between a factory builder and a site builder. Thus, they would be able to tailor products that fit the different needs of the different users.
- Complacency and Stagnation in Growth
The nature of the building materials industry makes causes companies to be complacent. Most companies have established most of their major customers. They rely on maintaining their relationships with those customers for repeat business. They also have established distribution channels that serve them. However, such overreliance on existing customers and distribution channels inhibits growth. There is need to constantly review the market conditions and seek new ways to get new clients. A constant monitoring of the market will allow you to know the needs of different markets. You will be able to use such information to develop penetration strategies into new territories. You can also expand your product offering based on the information you collect from the market. That will fuel growth both internally and into new markets.
- Ineffective Accounting and Debt Collection Policies
Finance forms a key part of any business. Failure to manage your finances is almost a definite precursor to failure. Some policies in a company can cause financial distress. For instance, where there are constant delays in paying suppliers, disputes are very likely. Disputes cause disruptions in production. Disruptions in productions lead to losses as you lose your customers to competitors due to unavailability of products when customers need them.
A major problem facing many companies in the construction materials industry is payment delays. Although you may make deliveries in time, a major hindrance to your operations will be delays in payment. Many material suppliers face a big challenge collecting their dues from their clients. That poses a major hurdle to the continuity of business. On average, 80% of the companies report cash flow issues with 20% facing negative cash flow issues. Companies have to allocate resources to collect debts while also trying to maintain production.
A possible solution to payment collection issues is the use of third-party collection agencies. Using a collection agency is highly beneficial to your company as it helps you manage your cash flow without hassle. Since the agency earns fees based on their collections, they take up the responsibility and allow you to focus on your core functions of manufacturing products and supplying them. A reputable firm will give you an assurance to collect your debts and give you the peace to continue your operations.
As a building supplies company, you will face many challenges. The hurdles you face can be industry specific or general to the entire economy. You have to be prepared to come up with effective solutions. Debt recovery through collection agencies is one of the solutions that ensures you remain in operation.