As 2023 ends, it’s time for businesses to complete budget audits. Reviewing your business plan and market research are crucial parts of every budget audit, but there are some specific updates to keep in mind when building your budget for 2024.
Start simple: Tackling annual budgets for any business can be a daunting task. However, you have one tool in your kit that is always a solid step No. 1 – your business plan. What services are outlined in your business plan and how does that list compare to the actual services you provided throughout the year? Compare your plan with your actual services to help dictate the flow of cash.
Industry trends: September 2023 saw a slight decline in construction backlogs, but the ABC Construction Confidence Index indicated growth into 2024. Additionally, the industry is seeing an increase in wages and job opportunities, making the field appealing to newcomers. The U.S. Department of Commerce is proposing $12.3 billion in discretionary funding and $4 billion in mandatory funding in 2024 with a big push in technology advancement for businesses.
Construction is also shifting away from traditional materials and looking into more sustainable building materials. “Green building” is in demand due to consumer trends focusing on environmentalism and sustainability.
Technology is a big focus for 2024, too. Generative AI is of particular interest, which could improve project designs, productivity and costs. As always, keeping high productivity and lowering costs can have big impacts on annual budgets. Investing in the right technology is necessary for businesses to remain competitive.
Legal updates: The updated Davis-Bacon Act has its pros and cons for the construction industry. Carefully review the updated act and what it could mean for your business.
Employment challenges: Since COVID-19 just about every industry has struggled with maintaining a solid workforce. The construction industry is making strides toward investing in technology to help attract younger workers, but working with interns and apprentices is another option to consider going into 2024.
Supply chain challenges: Parts and materials are crucial to keeping your business going. Mitigate ongoing supply chain issues by placing orders early, creating contingency plans and finding backup vendors or subcontractors with more competitive rates. These steps will help keep your projects running on time and cost effective throughout the year.
Advanced building materials: With the previously mentioned push for sustainable building materials, other advancements are being made – and made more affordable to use. Engineered cementitious composite (ECC) is particularly interesting because it is stronger than traditional concrete while being cost-effective. 3D-printed materials are coming to the forefront for being quick to produce to meet rising demand in home construction.
Set your business up for success in 2024 by auditing your budget now. With all the industry changes, like legal updates, new materials and a post-pandemic workforce, even a little bit of planning will go a long way.
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