Did you know that there are a staggering 3,759,710 construction businesses in the US right now?
That’s a lot of competition! The industry employs a huge number of workers. The industry is growing at 2.6% per year right now. But, that growth doesn’t come automatically to each construction company.
To find the success blueprint for your company, you need to look at the successes and failures of others and learn a few lessons. You need to learn how to get the basics right so you have a strong foundation for future success.
Let’s dig into 7 tips for how to grow a construction business.
1. Create a Solid Business Plan
To succeed in the construction industry, your business needs to understand its market positioning. Once you know where the areas you want to focus on, you’ll be able to research them and plan for growth.
Remember, there is a lot more to construction than just house building or renovation. To stand out from the crowd and fill local needs, it can be helpful to identify a niche to fill.
For example, is there a demand for ADUs in your area? If so, could you specialize? You could become a go-to local expert that is familiar with permits, etc.
Even if you add a specialty and continue as a general contractor, you can create a platform for future growth. There are a ton of support industries to consider branching out into as well. Think of supplies, site management, and even construction cleaning.
The planning stage is the time to consult with industry experts. Let them highlight areas for concern rather than running to them blind further down the line.
2. Build a Sound Financial Platform
You need to build any growth on solid finances and accounting practices. If you don’t have a firm handle on the figures at any given time, how can you say whether your business is growing or not?
Construction is a challenging environment. There are lots of cash flows out on supplies, and sometimes, you’ll have to wait a long time for payments to come in.
You need to have tight control over your finances at every stage. Build strong payment policies into your construction contracts.
If you want to secure funding for future growth, you’ll need to have easy access to your financial data. It’s worth investing in the personnel and software to get this side right. Otherwise, there will always be a limit on your future growth.
3. Strong Team
Your workforce is your biggest asset when growing your construction business.
You need them to have the right skills but also the right work ethic. When you find skilled, reliable workers, let them know you value them. Some keys to this include:
- Regular communication
- Meaningful praise
- Paying them what they deserve
Part of building a strong team is also knowing when to let some people go. If you have employees who are not team players, they can bring down the morale of the whole operation.
It’s a balancing act, and you must always act within the law. But, don’t let your best workers become dissatisfied because others are not pulling their weight.
4. Make Good Use of Technology
Industry-specific software and reporting tools can help you to cut costs. They also help you to make the right decisions for your construction company.
For example, roof estimating software has features that help you to provide accurate estimates. Construction management software brings projects together onto one platform. This can allow you to monitor costs and make decisions based on accurate data.
This software may seem like a large investment. But, if you’re serious about growing your company, you need it. Manually performing calculations or relying on spreadsheets is not going to cut it long-term.
5. Streamline Your Internal Processes
If your back office team is spending time on meaningless work, you’re pouring money down the drain. You’re also making it harder to put together winning bids for the contracts you really want.
Again, it’s worth considering investing in software to streamline processes. Also, bringing in an expert consultant to analyze your processes can help. Their analysis can help you to decide what software would be most effective for your company.
6. Focus on Quality and Customer Service
Future growth starts with excellence now.
Handle each job as though it were a major contract and you’ll build up a base of satisfied customers. They’re the people who recommend you to their friends and write glowing testimonials.
In this industry, customer service also matters. Take care of the details, like the respect you show for people’s homes and how clean you leave the site after you’ve finished. This will help you to build a reputation that money can’t buy and support your future growth.
This is another reason why assembling the right team is so important. If your construction company focuses on smaller projects, they are the face of your company when you’re not there. It’s crucial that you can rely on them to project a courteous and respectful image.
7. Build Strong Links with Suppliers and Subs
Your suppliers are the lifeblood of your business and it’s a mistake to rely on a single vendor.
The worldwide construction materials crunch in 2021 highlighted this. By building strong links with a few suppliers, you can maintain the steady flow of materials into your business.
The best way to keep them sweet? Pay them on time. The same goes for subs.
Develop a great reputation as a reliable payer and both vendors and subs will be lining up to work with you.
The Bottom Line: How to Grow a Construction Business
Want to know how to grow a construction business? It all starts with a great business plan. Build a reputation for quality work and prompt payments.
Treat all your customers with courtesy and respect. Assemble the best team of workers who don’t just get the job done, but turn up ready to work day in, day out. With a little help from the latest tech, you’ll be able to gradually build your business on a strong footing.
For more great ideas and insights to get your company booming, head over to our Business section today!