[Management Column Vol. 28] Case Studies of Local Construction Companies Surviving

basic information

Please use this as hints for management decisions, such as building a management foundation, improving management quality, cash flow management, bank relations, business succession, and restructuring after the appointment of the second or third generation. Additionally, feel free to contact us with any questions or inquiries when putting this into practice.

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Applications/Examples of results

As a survival strategy for local construction companies, one option is to join a franchise, but only a handful of companies can actually do so. The reason is that the joining fee alone is around 5 million yen, which is certainly not a small amount for local construction companies. Moreover, if they want to build a model house, they will need funds exceeding several tens of millions of yen. Therefore, a common strategy is to venture into the "renovation sector." The goal is to create a new business model as a corporate revitalization measure for the housing construction industry and to apply it to the challenging task of corporate recovery. The business concept includes: - Clearly distinguishing oneself from competitors and promoting differentiation - Ensuring appropriate profits without resorting to unreasonable price cuts to secure orders - Easing cash flow through strict process management (creating a situation where working capital is not needed) - Not engaging in sales activities and not requiring sales personnel These are business models that take advantage of the issues faced by small and medium-sized construction companies. There are methods that local companies and small businesses can adopt that large construction firms cannot. Next time, I will discuss "Marketing for Local Construction Companies."