How to Grow Your Construction Business
Published on June 17th, 2020
As with all businesses, no one can afford to be complacent. The markets are continually changing. Every bit of new equipment or technology gives your rivals a chance to overtake you and steal your business. This article is designed to highlight some of the things you need to think about – then, you’ll sustain your business and have a good reputation, but you’ll be able to enlarge and expand.
If you have a construction project underway, keep your business customers up to date. They want to know you are on the ball and will be able to tell whether or not you’ve done regular site visits. Technology has a significant part to play in communication. Many companies are gaining standard billing code systems. From a trawl of the internet, I discovered Messente, which enabled companies to provide notifications to their customers of prices, bills, and activities. Companies are also using such technology to conduct SMS marketing campaigns.
This is absolutely essential. You need to know you are pricing up potential work correctly. The temptation is to look at undercutting the rivals. Look at the costs of workforce and resources, and ensure there will be a net profit afterward. You’ll go nowhere if you just strike even, and you might also go backward and make a loss.
As with most businesses, employees are the biggest expense. Paying low salaries is not the best way to get good work out of people or to retain them. Focus on building up a team of competent and committed people – you might have to pay more for them, but cheap labor can be counterproductive.
Like it or not, everyone expects to find your company on social media as well as on a website. This will take time and money to get up to speed, but it is a hugely valuable way of getting your business known. People need to know what you do if they are going to consider you. Updates on current and previous projects can add validity – if others are using you, they will feel safer doing the same. They can ask other customers for reviews too, or even find them on social media.
You may be happy to limit your construction work to your local area. Remember, though, there is only so much property, and rival companies are here too. Think about extending your reach. Again, it will cost you time and money, but it’s essential to consider this as it is to think about your company ten years from now.
Narrow Your Niche
Rather than saying you can do all construction work, it is wiser to focus on one area, particularly at the beginning. If you specialize, you’ll be seen as a specialist! Read about the 80/20 rule. Focus on what makes the most money rather than doing lots of low paid types of work. To stand out from the crowd, you need to make it clear what you have to offer and why you are different. They need to know why they should choose your company. Branding is also important, including your logo.
This can be seen as a drain on your valuable time, but it’s well worth it. Join a local trade association to make new contacts, give and receive business cards, and encourage one another and pick each others’ brains. Sometimes it’s not what you know but who you know. Go to construction events. You can meet new contacts here too, and learn more about the latest innovations. You want to stay up with the pack, or even get ahead.
The Legal Stuff
Your business needs to be organized and compliant in order to survive growth. You need to have business insurance to protect against lawsuits and injuries. Stay on top of all things related to health and safety. Have well-created employment procedures and contracts. Your accounts have to be continuously managed for tax purposes and audits. You’ll never have a clear picture of your company and it’s growth without regular reports on a weekly, monthly, and annual basis. As you know, cash flow is a major consideration in the construction industry, as materials are often purchased before the job is paid for. If all these areas are managed well, you’ll be able to survive the growth pangs when they come.
They say quality pays for itself, and this is true. Use cheap materials and cheap labor, and the adverse results will not be a surprise. Remember, your reputation is at stake. Buildings must be safe and live not put at risk. If you want your company to grow, there has to be plenty of good work under your belt that satisfied customers will talk about to others.
At the end of the day, it’s really good to stand back from it all and consider the big picture. The tendency is to be preoccupied with everything that occurs from day to day. Your company will hugely benefit if it’s well organized and full of great employees. Use the best materials and marketing, and know your rivals and the latest technology. See what the opportunities are, and look to enlarge and expand your territory.