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In this article, we'll explore the strategies and insights shared by Scott Reib, a seasoned lawyer and legal coach, on how to build a "shatterproof" construction business that can withstand the storms of the industry.
Navigating the Storms of the Construction Industry
As a construction professional, you know that the industry is no stranger to challenges and obstacles. From financial hurdles to legal disputes, the construction landscape is fraught with potential pitfalls that can threaten the very foundation of your business. However, with the right mindset and proactive approach, you can emerge as a true Construction Champion.
The Biggest Storm: Litigation
According to Scott, the biggest storm that construction professionals face is litigation. "Litigation is the biggest problem that we have in the construction industry," he explains. "It's not that you can avoid it really. It's just going to happen. You're going to run into a client that you can't make happy."
Whether it's a job that goes bad due to no fault of your own or a disgruntled client, lawsuits are an unavoidable reality in the construction world. The key, then, is to be proactive and prepared for when these legal battles arise.
Strategies for Shatterproof Construction Businesses
Scott outlines two fundamental strategies that construction champions can employ to protect their businesses:
Stay in Your Lane: Resist the temptation to venture into unfamiliar territory. "If you're a residential construction company, do residential. If you're a single-family person, don't start building apartments. If you're commercial, don't just jump off and do a residential," advises Scott. Diversification is important, but it must be done with a well-crafted plan that considers the necessary resources, funding, insurance, and contracts.
Utilize a Siloing Approach: Separate your business entities to create a layered, complex structure that makes it more difficult for litigants to target your assets. "If you are doing residential and commercial, have 2 different businesses that are doing it. Don't do them in the same LLC, have 2. They could be managed by 1 LLC, but have those 2 things in separate LLCs," explains Scott.
By implementing these strategies, construction champions can shield their businesses from the devastating impact of lawsuits and other legal challenges. As Scott emphasizes, "Simplicity does not work in the game of asset protection. The simpler it is, the faster it can be attacked."
The Importance of Proactive Legal Counsel
One of the key insights from Scott's experience is the need for construction professionals to proactively engage with legal counsel, rather than waiting for a crisis to arise. "Don't be the construction guy or gal that only calls your lawyer when the house is on fire. Call them before you light that fire," he advises.
By establishing a relationship with a trusted legal professional, construction champions can receive valuable guidance on contract drafting, risk management, and asset protection strategies. This proactive approach not only helps to mitigate potential legal issues but also empowers business owners to make informed decisions that strengthen the foundation of their companies.
Becoming a Construction Champion
To become a true Construction Champion, Scott emphasizes the importance of surrounding yourself with a team of key professional relationships, including lawyers, accountants, insurance brokers, business coaches, and bankers. These relationships can help construction professionals navigate the complexities of the industry and avoid costly mistakes.
As Scott concludes, "Having the right information at the right time is often the difference between success and failure. So, get the right information, even if you have to invest in it, and don't look at it as an expense. It's an investment in yourself because you'll get smarter by hanging out with smarter people."
By embracing the strategies outlined in this article and investing in the right professional relationships, construction professionals can position themselves as Construction Champions – resilient, adaptable, and ready to weather any storm that comes their way.
Watch the whole interview today!
Connect with Scott Reid
To learn more about building a "shatterproof" construction business, connect with Scott Reid:
Visit the website: reiblaw.com/constructionchampions
Download a special ebook
Schedule a 20-minute laser legal coaching session
Becoming a Construction Champion: Strategies for Building a Shatterproof Business