Running a construction business is a challenging task. With the industry being extremely volatile and prone to delays, business owners and project managers strive for continuous improvement to perfect its project delivery process. However, there will be many problems to solve, and if you do not plan and run your construction business well, it might fail.
Most people who own construction companies spend their time working to improve their business instead of in it – they work long hours to get everything right. In this article, let us look at how you can grow and expand your construction business with seven strategies. But first, let us dive into why most businesses fail.
Why Do Most Construction Businesses Fail?
Growing and expanding your construction business is easier said than done. So the million-dollar question is – how can you grow and expand the business without going gray in the process as the leader of a construction company? Before finding ways to improve your business, you need to figure out what is stopping you from growing your business.
Starting Slow
You will only get very far if you put effort into it. Even though many business owners know what they want for their business, others do things without much thought because they think they will not lose their business. If you are going to start something, make sure you do it all the way and do not do things halfway. This can lead to significant impacts, not just for your company but also for yourself. It will be much easier to run a business with the right work attitude.
Financial Issues and Tight
Cash Flows
The worst thing you could do for your business is keep putting your money in to cover its costs without any means of getting it back or earning profits. Make a solid plan of action and a detailed estimate of your daily budget – a clear plan that lists the costs and expectations is the way to go. It keeps the client well-informed so they can make sound decisions if they can afford to go through with the project. Be honest and specific with your client.
Aside from needing more money to start, contractors often make another mistake: giving wrong quotes. If you do not take in the full scope of the work, costs could go up, which would be stressful for you and your client. In this case, the contractor is often the one to should these costs.
Lack of Planning and Preparation
Every business needs to have an excellent strategic plan for managing its operations or a specific project. Many things, like natural disasters, structural problems, mold, or asbestos, could be missed by contractors. This is why you need an effective construction planning management system to help you prepare for possible roadblocks without suffering consequences.
Putting together a business plan can take a lot of time. But it is better to have a detailed plan now than to move without it, lose money, and waste time and effort.
Poor Time Management Skills
Contractors can quickly get into trouble when they cannot strictly stick to the schedule. This is usually because of delays – be it due to inclement weather, material shortage, or even something as simple as miscommunication. Sometimes it is also because tasks are not given to the right people – this can cause the completion of specific activities to be delayed, affecting the whole project’s timelines.
When making a schedule, you put contingency plans for delays during the building process. Keep an eye on the due dates for tasks and the schedule for finishing the project to ensure it ends on time.
Bad Leadership Skills
When crew members need to be more motivated, they almost always bring the whole team down. They could only hurt your reputation if they took responsibility for their tasks to complete them with the highest quality possible. As the leader, it is your job to ensure that your subcontractors or employees are adequately trained and paid and that they share your enthusiasm.
It is better to work somewhere where your job does not make you feel small and everyone is happy and content. If you do this, you won’t have to do any extra work or pay extra money. This is why you need to maintain a healthy work environment and increase employee engagement.
Handling More Projects Than You Can
Everyone who owns a business wants it to grow – however, it can be dangerous to grow too quickly. Most construction companies want to do every job that comes their way, but the question is, can they afford to do so? Most of the time, the quality of service and its ability to deliver on schedule and within budget may be compromised since you are handling more than you can. Try to take things slowly, one step at a time, and keep track of your progress so things stay in order.
Lack of Marketing
What good is a good service if no one avails it? You know you have an excellent service, but you need to market it to the right people to take on projects. It would help if you had a marketing plan to know your target market and why they should buy from you instead of one of the thousands of other construction companies. Think about how you can set your services apart from the rest – then make sure your marketing plan gives them precisely that.
Seven Strategies You Can Use to Upscale Your Construction Business
It can be a daunting task, but luckily, there are simple strategies that you can take to find your construction company’s growth roadblock and upscale your business. In this section, we have listed seven strategies to quickly improve and expand your business.
Build an Efficient and Effective Team
A construction company’s success is often dictated by how efficient or great its team is. Your team members are your most essential resources, so one of the best ways to grow your business is by hiring the right people, rewarding their hard work, and giving them the tools they need to keep improving.
When you delegate tasks to the right person, invest in their skills and training, and take care of their career growth, you can encourage everyone on the team to be responsible for their actions. When each job has clear responsibilities, it is easier to determine how much return on investment each person brings in.
However, these goals take time for the industry to reach. You still need to consider many things – filling skill gaps, like needing more bricklayers and dry liners, lack of leadership, and good construction management.
Invest in Your Hiring and Onboarding Process
As stated earlier, your people are essential for your business to grow. As a result, hiring good people should be a big part of your construction company’s plan for growth.
A well-thought-out strategy for hiring and getting new employees up to speed will lead to less employee turnover, less stress, more engagement and job satisfaction, long-term loyalty, and growth for the business. You can look for ways to keep your employees engaged and create a happy and healthy work environment that keeps everyone motivated.
Get Valuable Insights to Improve Your Data and Analysis
Data can help you make better decisions about projects and make the right ones in the least amount of time. Luckily, many project management tools for construction can help you get access to updated information to spot any red flags and get rid of them before it becomes a bigger problem.
Using digital tools can make it easier to see what is happening across different projects, teams, and locations, whether you are at the office or on-site. It is essential to help you reduce mistakes, improve communication, boost productivity on the job site, and reduce risks.
Streamline Communication Channels
Make it easy for your clients, subcontractors, and other stakeholders to contact you. One of the benefits of using construction software is that it helps bridge the gap between your crew members. You can access the same information or know what happens in a particular task with a simple click.
Win More Construction Bids
Winning more construction bids lets you handle more projects, effectively growing your capabilities as a business. You could miss out on many new construction projects if you are too busy with paperwork and processes. A centralized system, like affordable construction management software, can automate administrative tasks. Large chunks of data will save you hundreds of hours a year, giving you more time to bid on construction projects.
Prioritize Customer Satisfaction
When hiring employees, look at their hard skills first to see if they have the right contracting skills you need. But making sure they can give good customer service is almost as important. Putting together a team of people who treat your customers with respect, patience, and understanding will help your business get repeat customers and valuable referrals.
Invest in the Right Software for Your Organization
Using efficient construction project management software can make everything about managing the project easier – from accounting to managing documents. It can significantly increase productivity and cut costs for a business when utilized effectively – allowing you to grow your construction business quickly.
