Strategies for Success in a Construction Business
Those who wish to start a construction business also need to learn how to develop it in ways that will allow them to achieve their desired level of success. Fortunately, there are numerous strategies that you can employ—each one guaranteed to help grow your construction business. Some of these are as simple as defining your goals one at a time for the sake of attaining realistic progress. Then some involve more complex scenarios and tools, such as the use of cutting edge technology and consistently detailed reports.
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Strategies for Success in a Construction Business
Define your Vision and Mission for Construction Company
The essential thing that you can do is to determine what vision drives your construction company. Many businesses are founded on the foundation of a singular vision. If you need help with yours, then a vision builder software comes highly recommended. Being able to identify and articulate both your mission statement and your capability statement is the next logical step to undertake.
The purpose of these things is to provide your company with the necessary direction. By knowing where you intend to take it, your strategic decisions going forward will be better informed, and success becomes a much more likely outcome.
Build a Committed Team for your Construction Company
Once you have uncovered the direction in which you want your construction company to go, the next step will involve the hiring of competent and committed professionals. Each person you hire becomes a crucial element to your business. Not only should you make it a priority to fill your staff with coachable and skilled contractors, but you also need to pay attention to who you decide to add to your construction project management team. Once you have found the right people, it is only a matter of extending an employment offer their way, before drawing up a construction management contract and a training request form, among others.
Cover your Construction Company Bases
Elements of any strategic plan will not be complete without the inclusion of the necessary licenses and permits. Likewise, you may not be able to begin any construction project at all if you neglect to acquire a building permit. Once you have accomplished the legal aspects of your company’s endeavors, the time will come for you to turn your attention towards the gathering of materials, including whether or not it would be appropriate to make use of reused materials. By covering your bases, you remove any possibility of glaring flaws in your operations and prevent your vulnerability to external threats that are usually avoidable.
Be an Organized Construction Company
You need a certain level of organization to ensure that your strategies are operating with a sound foundation beneath them. This includes a solid organizational structure that illustrates who does what, who works under whom, and so on.
Discipline in terms of schedule is also of paramount importance. To be successful concerning scheduling in construction, you can always make good use of items such as a construction project planning checklist, among others. Back to the topic of organizational structures, there are three main types that you ought to know about:
Functional
The way this works is to divide those within your company into their purposes. For example, within a different kind of company, you may categorize employees under different departments like marketing, accounting, and sales.
Divisional
This is an organizational structure used by larger companies. Usually, those are the companies that have smaller subsidiaries or have operations across a broader geographical scale. Each of the divisions is also known to operate independently from one another.
Matrix
This is a hybrid of the previous two types, used in even more significant, more multinational companies. As such, you can expect those companies to reap the benefits of both functional and divisional organization structures.
Understand Expenses
A great way to better strategize the growth of your construction business would be to improve your understanding of how costs affect your daily operations. Budget planning and expense tracking, therefore, must be done regularly.
The more in-depth your plans become, you should be able to set aside an expense budget, which will allow you to focus on how much money you can realistically and strategically spend. This will also include developing a construction project cost estimate and a construction labor cost estimate, which are two significant aspects of your overall expenses.
Have a Construction Business Marketing Plan
A construction marketing plan is a yet another path you can take to strategically place your company forward and keep it in the forefront of your customers’ minds. The creation of a unique marketing plan will depend on what you aim to accomplish and what your niche is in terms of products or services. If there has to be a tip that focuses on, it would be to come up with a construction SWOT analysis so that you can have a better idea of your company’s overall standing. A sufficiently effective market analysis will depend on a substantial marketing budget, which should be allocated before anything else is accomplished. For general tips on the creation of a marketing plan, refer to the following:
Know your Audience
This is key to any marketing plan that a company can come up with. Do your research and determine trends whenever possible. Staying on top means keeping up with everything that involves your audience.
Focus on your Unique Selling Point
A unique marketing plan wouldn’t be unique without your one-of-a-kind selling point. This is where your efforts need to be built around, so always keep this in mind whenever you work on your plans.
Be Clear and Realistic with your Goals
Pragmatism wins over fantasy when it comes to business. As you set goals, be sure that what you are trying to accomplish is not only achievable but also measurable so that you can gauge just how well you are doing.
Ensure your Goals are also Adaptable
Business can be unpredictable, and if your goals are rigid in the face of such a nature, then you may find yourself disappointed more than you expected to be. Adaptable goals can help ensure that you can easily adjust when unexpected occurrences happen.
Keep an Eye for the Bigger Picture
Amid all your short-term planning, it is worth stressing that it must lead towards a bigger, more long-term plan. Every tactic used needs to build towards these far-off goals, which is what strategy is all about.
Networking to Build Contacts in Construction Company
Networking, is defined as the act of meeting others with a common interest or profession to exchange ideas and information. This is something that generally takes place in settings that are considered rather informal to achieve a more relaxed vibe. Networking is an important act with tons of strategic value for any business.
As you try to expand your construction business even further, it is recommended that you turn towards avenues like social media marketing to locate and prioritize key contacts. Below are some suggestions as to how you can easily set yourself up for success through networking:
Find Groups Online
Through your social media efforts, it becomes remarkably easier to find groups to connect with. Although this may not fit the traditional views of networking, it is rather convenient, allowing you to find contacts without having to leave your office. Once you have located the right people, you can easily set up meetings or start exchanging emails for your mutual benefit.
Join Events
There are numerous events relating to your business or line of work going on at any time. All you need to do is search for them and then make an appearance. This is a suggestion that will fall in line with the more traditional ways of networking in the sense that you can meet up with people in person and instantly attempt a connection via common professional ties or interests. You can also determine more quickly as to whether or not the people you have just met can be worth connecting to in the long run or not.
Get a Buffer
A more in-between method is to have a friend, family, acquaintance, or business partner introduce you to someone that he or she believes can be good as a business contact. Going down this path can lessen or outright remove any uncertainty or perhaps even the awkwardness of having to filter people out from events or online.
Prioritize Customer Service for Construction Company
Although the specifics are going to differ, the purpose of customer service is the same regardless of industry. For construction, how you deal with your clients can ensure that you can earn maximum benefits, which will include referrals and return customers, among others. If you are trying to make strategic improvements to how you handle customer service, it is worth looking into the following tips:
Keep the Line of Communication Open
Project managers need to keep in close contact with the clients, to make sure that everything is handled the way both parties want it to be handled. If anything goes wrong, then clients need to be able to voice their concerns without fear of being ignored or misunderstood. The same goes for project managers on their respective end.
Make Sure you Deliver on Time
Part of the deal between the clients and the contractors would have to be certain deadlines that both have agreed to. It is excellent customer service if you do your best to keep any promises you might have made. Doing so will reinforce your company’s reputation as a reliable business, increasing the chances of you acquiring return customers or referrals.
Do not use too many Industry-Specific Terminologies
When communicating with clients, you should speak in layman’s terms. Do not use too much—or any jargon that may confuse them. Clients will appreciate it because they will be able to know what is going on without too much hassle on their part.
Occasionally do things for Free
There will be times when it will benefit you to offer certain services for free. Such services do not have to be anything major; in fact, it should be the exact opposite. Menial jobs or small installations are done without any cost to your clients from time to time will be a big enough threat for many.
Embrace Technology in Construction Company
When you look at the rate in which technology is progressing these days, it makes absolute sense to try and take advantage of it as much as you possibly can. Updating construction technology falls under the scope of those involved in project management, and as such, it becomes necessary to look into what brand new development can best lead to an excellent productivity rate in construction. If you are to embrace technology, then it is recommended that you take a look at the following:
Design Technology
CAD, 3D modeling, and BIM are all excellent when it comes to design. In particular, 3D modeling can aid in creating miniature versions of the planned building to use as a reference through the use of 3D printers.
Planning Technology
For both estimating and scheduling, there is various software that can be used. MBS is a solid choice that can allow you to have more accurate pricing of how much your building is going to cost, for example.
Supply and Purchasing
This refers to MRP, which is short for material requirement planning. This system is needed to help construction companies when it comes to the purchasing of large quantities of materials based on what your production schedule is.
Execution Technology
There are two types of tech that can fall under this category. One would be to help connect on-site personnel with a specific project’s budget, schedule, and materials availability, among others. Another is meant to aid in the construction phase, specifically by managing the preliminary scheduling, the committing of resources, the controlling of tasks and resources, and other related things.
Financing
This is where accounting or financial software comes into play. Project managers may decide to go for either dedicated software or get an ERP, which can be just as useful.
Embrace Automated Reporting Systems and Keep Detailed Records
No company will gain anything from the loss of records or the lack of reports. These are fundamental parts of any construction project, making the process easier and less complicated to do. If you are having trouble with your income statement, for example, then it may be time to look into systems such as payroll software and report building software. For the latter, that is particularly significant when it pertains to the importance of reporting. It can also be used to create an auto expense report in addition to the overall document management of your company.
Be Selective to be Profitable in Construction Company
When it comes to profitability, it takes a lot of work for you to convert your profit & loss statement into something admirable. As you calculate your profitability ratio, be mindful of what works and what doesn’t. In other words, be more selective about what your company spends time on. As they say, time is money. Here are some things that you can afford to be targeted on:
Services that don’t Sell
As time goes by, you should be able to take note of what services you offer that tends to make your company the most amount of money. Those may be installations of a specific sort, or perhaps it could be a particular niche that has proven unexpectedly popular. With that said, you should also be able to see which services are not very profitable. Do not waste further time on those and focus solely on what makes you the most money.
Equipment that isn’t Worth the Cost
It can be tempting to go all out on certain types of equipment or tech just because it seems like the new ‘in’ thing. However, not all of them will be worth the amount of money you’ve spent on them. Some may be decent for the purpose, but there may be cheaper or more efficient alternatives. Cut off anything that can help save you money in the long-run if you want to see an increase in your company’s profitability.
Customers that do not Enable Growth
There will also be clients that may not help your company in the best ways. Some of these clients may pay late. In more extreme situations, there may even be those that do not pay at all. Those are the worst and must be cut off in favor of more rewarding clients for higher profitability.
Quality Importance in Construction Company
When it comes to construction projects, it is imperative to have some construction quality control software in place. This is helpful for when you need to come up with and execute a quality management plan in addition to a construction quality control plan. For some tips on how you can pull this off, take a look at the following suggestions:
A Focus on Quality Communications
Be sure that you schedule meetings intended to smooth out tensions between project members and bridge any existing gaps between them. This will also keep everyone updated on what’s been going on.
A Focus on Quality Assurance Monitoring
This may be done through human-driven systems or perhaps through the use of an automated system. With this, you can keep a closer eye on the work being done and by whom so that any potential delays are avoided as much as possible.
A Focus on Project Quality Specifications
Before starting on a project, it is worth listing down all of the building codes so that you and the client can get them approved right away. Doing this will help avoid any confusion that may end up causing more long-term problems down the line.
Improve The Bottom Line of Construction Company
Part of any company’s enduring success would be securing their profitability. Even when things are going well, having a healthy bottom line is preferable since it can help the business in several ways. Expansion becomes possible, as is the establishment of emergency funds. For construction businesses, there are many ways to improve the bottom line, and here are a few examples:
Re-Evaluate and Adjust Prices as Needed
As a construction company, you may feel as if your prices can be set for life. However, when going through tough times, it can be worth looking into how much you charge for your services and determine whether or not it is worth adjusting. Depending on the results of your evaluation, you can choose to change things up to improve your bottom line.
Control Overhead Expenses
By controlling your overhead expenses, you can prevent any unnecessary costs that will just lead to limited finances. It may also be worth performing a building cost analysis so that you can more accurately estimate just how much a certain project will cost and therefore have an easier time keeping overhead expenses low.
Seek out Lower Rate Loans
By seeking out lower rate loans, not only will you be able to get the financing needed for your project, but the interest required to be paid will be much smaller and, therefore, more affordable.
Make Smart Decisions for your Construction Company
Decision making falls under the many responsibilities of management. In Amarjit Singh’s book, Quantitative Risk Management and Decision Making in Construction, he introduces several techniques that can be used by construction companies for their benefit. Among these techniques include probabilistic cost estimating, cause-effect diagrams, FAST diagrams, and more. In addition to those methods, it can also be wise to conduct a construction management SWOT analysis. By doing these things, you not only come up with smarter decisions in regards to your construction company’s operations, but you are also further aware of what strengths and weaknesses your management team possesses.
Conclusion
As you can see, there is a lot to be done for you to reach the level of success you want your company to enjoy. Even more than that would be the wonderful tools that are at your disposal, such as construction software to help grow your company and social media use for the construction business. Be sure to utilize these properly in conjunction with all of the tips and methods that are outlined above. By doing so, you will only serve to guarantee an even higher chance of achieving success for your construction company.
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