{{first_name}} Every construction business should have a safety poster. However, in many shops, it's been on the wall so long it's now become load-bearing.
For many owners, that's where safety lives. It's a poster, a binder, a toolbox talk on Monday morning, and something that matters when an inspector shows up.
However, anyone buying a business, sees it differently.
Many years ago, I worked with a commercial contractor that had strong revenue, good margins and a solid team. On paper, the business looked like a clean sale.
Then the buyer's team pulled the safety file. They found a workers' comp premium rate running well above the company's industry class, a few lost-time claims over three years, and an open item from a ministry inspection that nobody had closed out.
None of it was a disaster, but all of it cost money. The buyer asked harder questions, wanted extra protection in the deal, and started wondering what else hadn't been looked after.
The owner had thought of safety as an operations issue. The buyer read it as a financial statement issue.
Where safety shows up in your numbers
Your safety record touches your business in more places than most owners realize:
Premiums. A worse claims history usually means you pay more for workers' comp than competitors in the same line of work. That money comes straight out of profit, every year.
Insurance. Liability and auto insurers look at your history too, and a bad record can raise what they charge you.
Access to work. Many GCs, owners and public buyers won't let you bid without a certain safety standard or certification. If you can't prequalify, the work never reaches you.
People. Good tradespeople talk. A shop with a reputation for injuries has a harder time hiring and keeping them.
Buyer risk. Open claims, unresolved orders and a weak safety program are all potential costs a buyer may inherit. They'll either price that risk in or ask you to carry it.
So a strong safety record is more than the right thing to do for your people, although it is that first. It also lowers your cost of doing business, opens doors and increases your value.
Read your safety file the way a buyer would
If a buyer asked tomorrow, could you hand them these?
Your workers' comp premium history for the last three to five years, and how your rate compares to your industry class.
Your claims history, especially lost-time claims, and what caused them.
Your inspection history, including any orders and proof they were closed out.
Your certifications and prequalification status. Which safety certifications do you hold, and which customer platforms are you approved on?
Your written safety program, with training records that show it's actually used and not just filed.
If you'd struggle to pull any of these together, you've found your first project. It's much easier to clean this up two years before a sale than two weeks into diligence.
The Number This Week:
What is your workers' comp rate vs. your industry class?
Pull your latest premium statement and compare the rate you pay against the standard rate for your industry class.
Below your class: Your record is helping you, so make sure buyers and GCs see it.
At your class: You're average. That's fine, but it's not a selling point.
Above your class: You're paying for your claims history every year. Find out why before a buyer asks.
Then look at the trend over three years. A rate that's moving in the right direction tells a better story than one good year.
Question This Week?
When did you last look at your safety numbers the way a buyer or a GC would?
If you know an owner who treats safety as "just the binder," forward this to them. It might save them a claim and a chunk of their sale price.
Build deliberately.
P.S. We are now on YouTube. Same no-fluff advice, but you can listen between job sites. Please SUBSCRIBE and SHARE it with an owner who could find it useful.
Why am I writing this? I've spent over 20 years working alongside construction and trade business owners across Canada. My firm, N3 Business Advisors Inc., has helped hundreds of contractors buy, grow, value, and sell their businesses. I started my career as a teacher, and that part of me never left. So once a week, I put one lesson in your inbox, for free, to help you build a business that buyers line up for. If this was useful, pass it to one owner who needs it. If it wasn't, reply and tell me what you'd rather read about.
Nitin Khanna, CFA · Founder, N3 Business Advisors · Mastering the Business of Construction