Material availability and a shortage of labour are already putting the brakes on the building boom of the last 18 months.

Figures for June from the Office of National Statistics (ONS) showed a drop in construction output for the third consecutive month, declining by 1.3%. The drop was attributable to a 4.2% decline in repair, maintenance and improvement projects – the bread and butter work of many small builders.

The Federation of Master Builders (FMB) Q2 membership survey, published at the start of August, highlighted the pressure that material prices was putting construction firms and sole tradespeople under. According to the survey, 98% of builders faced material price rises between April and June, and nearly all expect the issue to continue in Q3.

The causes of the current predicament are well documented; there has been an astonishing increase in demand on certain materials at an international and domestic level.

Sales of timber for example, are 75% up on last year alone. Other product categories have seen demand increase anywhere between 30-to-50% year-on-year.

Given that the materials crisis isn’t going to improve before end of the year, we spoke with several tradespeople to get their advice on handling the material shortage, and protecting their business.

1) Never agree start dates, until you have your materials – Nobody wants to be in the position where promises have been made to a client, subbies booked, and materials paid for, only to be let down by your supplier. As your suppliers’ terms & conditions will say they are not responsible if delivery doesn’t happen, there is little you can do. So don't put yourself in that position. Do not confirm start dates with the client (or subbies) unless you have the materials in hand.

2) Stick to your own terms & conditions – If your invoice says the quote is valid for thirty days, stick to it. This will give you an opportunity to revisit the materials cost if necessary. With some jobs, using hard to obtain materials like timber and bricks consider reducing the time your quote is valid for.

3) Communication – Do not miss an opportunity to communicate with your client. Inform them about the material supply issue and its impact on prices when preparing a quote, remind them again when sending your quote, and before you start work.

If you foresee further problems be proactive. Discuss it with your client and offer alternative solutions. If aspects of the project change (for whatever reason), discuss it with the client, and get verbal and written approval before moving ahead with work.

Constant communication is time consuming and sometimes painful, but it builds trust (and your reputation).

4) Breakdown quotes and invoices into labour and materials – When quoting and invoicing clients, provide separate line items for materials and labour. Some tradespeople will be nervous about providing this level of transparency, but in the current volatile environment it is easier to tell clients about the problem if you can show them how it impacts the project cost.

Greater transparency will also help build trust with your client.

5) Protect your cash flow – Cash flow is the lifeblood of any business so don’t move forward with work without a deposit from the client. (You are not a bank, so don’t finance the client’s project.) A rule of thumb suggests 25% of the cost of the job would be a fair deposit. If that doesn’t work for the client, then the deposit should at least cover the initial price of materials to start the job.

If the client doesn’t want to provide a deposit, suggest they purchase the materials.

If you client doesn't want to do that either... well look at point 6.

6) Walk away – If material prices mean you cannot complete the job and make a worthwhile profit, walk away. It may seem counterintuitive to turn work down, but it frees up time to either work on (or find) more profitable projects, hopefully with better clients. Have confidence – good tradespeople find work.

7) Shop around – With prices flatulating widely and supply inconsistent, it is common sense to shop around for materials. With more merchants online it has become easier to check on product availability, but not all supplier websites necessarily reflect the stock levels in their warehouse.

Some of the large merchants will operate a just-in-time supply chain; meaning that what you’re ordering (and paying for) may not be immediately available, but in transit. It is worth making a call to ensure the materials are actually there before purchasing.

As one tradesperson said: don’t pay for it unless you’ve seen it.’

8) Cultivate relationships – It can be frustrating if you’re let down by a supplier, particularly if you've paid up front. But put that to one side, and focus on building bridges with merchants, rather than burning them down. Pre-COVID you may have had one regular supplier, but now you need to develop relationships with several suppliers. 

Remember: in your hour of need, one of these building merchants might just be able to save your bacon.

9) Fill your order book – Material delays will mean longer working cycles, which are frustrating, but unavoidable.

Use the time to communicate with your clients, plan your working schedule in detail and develop your social media channels to attract more work. Many tradespeople have work booked well into next year – but you need to be flexible and build strong relationships with your customers if you're going to deliver those projects successfully.