What is a common reason for more business failures in construction than contractor incompetency?

In the context of the construction industry, poor record keeping is often cited as a significant factor contributing to business failures, even more so than contractor incompetency. Maintaining accurate and comprehensive records is crucial in construction for various reasons, including financial management, project tracking, regulatory compliance, and resource allocation.

When a contractor fails to keep clear and organized records, it can lead to a myriad of problems. For example, costs might be mismanaged, leading to budget overruns. Project timelines may become unmanageable if progress is not tracked accurately. Furthermore, without proper documentation, disputes may arise with clients, suppliers, or subcontractors, as there may be no clear evidence to support claims or agreements made during the project.

Consequently, this lack of accountability and clarity can culminate in financial losses, legal issues, and ultimately, the collapse of the business. Thus, while other factors such as poor project management, customer service, and subcontractor relations certainly play a role in the success or failure of a contractor's business, the foundational aspect of record keeping holds paramount importance, as it underpins the overall operational health of the construction business.