Valued at over $2 trillion, the US construction market is booming. However, despite the many opportunities, construction companies and professionals face various challenges–from increased cybersecurity risks to dealing with demand fluctuation and seasonality.
It’s the latter that’s going to be the focus of our article.
If you are worried about your construction business not coping well with seasonal changes and would like to keep it profitable all year round, then keep reading.
Seasonality and Its Impact on the Construction Industry
You’ve worked hard on your marketing, closed a profitable deal, and are now ready to start your construction project. Great, right? Well, technically, there’s a small issue: it’s December, and the local weather is usually extremely cold and snowy.
Seasonality can make or break your project – unless you’re prepared. In this context, seasonality refers to two seemingly separate but often connected aspects: customer demand and weather events. Let’s examine both in more detail.
Demand is often dependent on the season. For instance, when it comes to home renovations, homeowners will be less prone to embark on a major project during the colder months of the year, and they might be similarly less inclined to do so in the summer holidays when they are more focused on things like vacations and childcare help.
But seasonality doesn’t just affect residential clients – it can also impact commercial and business ones. These, in fact, often prefer undertaking construction projects towards the end of the financial year or during other times of the year that might be more cost-effective for them.
Of course, we can’t talk about seasonality without addressing the weather. This can pose another big challenge, particularly in areas generally more susceptible to extreme or adverse weather events. Anything from heavy rains to snow storms and even extreme heat can hugely delay even the most streamlined construction projects while also posing further risks related to costs and safety.
Stay Profitable All Year: Five Ways to Tackle Seasonality Effectively
Now, let’s examine what you can do in five key areas to mitigate the impact of seasonality on your business.
Plan Your Finances Ahead
A solid financial plan is essential for all construction businesses to face the ebbs and flows of seasonal work. Make sure you allocate some time each year to review where you currently stand financially, set a budget for the year ahead, and plan for any unknowns and disruptions that might affect cash flow.
You could also explore lines of credit and set aside some of the cash you earn during the busiest seasons so you have a financial cushion for emergencies.
Optimize Staff and Resource Management
The cost – and availability – of labor is another factor that seasonality in construction heavily influences. This industry often relies on temporary workers who might not be available all year round and who, conversely, might be in high demand during peak periods.
Consider, then, your hiring processes: do they consider these seasonal differences? Make sure you are well equipped to face surges in projects during specific times of the year, and be prepared to scale down your workforce at other times.
Similarly, you’ll also want to assess the tools, materials, and equipment your workers will use. Is everything up to scratch? Are you running regular audit trails of your processes? How about technology – are you using the latest software and solutions to enable your staff to perform their jobs to the best of their abilities? Slower times present the perfect opportunity for you to take stock of all this and get ready for busier months.
Price Your Work Appropriately
Similar to what other industries do – such as retail, travel, and hospitality – the construction sector can highly benefit from pricing its services differently depending on the time of the year. A great way to do so is by leveraging dynamic pricing. This is a technique that allows you to change your prices to match current supply and demand, as well as the prices set by other companies in your field. Incorporating this into your sales planning template gives you scope to build custom quotes based on seasonality, location, and the relevant challenges for each new project.
Another tactic is offering discounts. When work is sluggish and demand plummets, consider launching special deals for specific projects, whether residential or commercial. This might entice both individuals and businesses to embark on a project when they would have otherwise passed on the opportunity because of cost.
Adjust Your Marketing Strategy
A solid marketing strategy is another vital element that can help you face seasonality challenges more effectively. After all, the way you promote and market your services to your target customers is, ultimately, what attracts them to your company and – if done well – wins them over.
So, consider reviewing your overall marketing strategy and making necessary tweaks according to the specific time of the year. For example, offering discounts at slower periods might be a great incentive – make sure to market special deals and offers.
Consider strategies like inbound marketing. What does inbound marketing mean? Attracting potential customers through the content you create. This could be blog posts, white papers, and opt-in mailing lists. You can also use customer feedback here – ask your satisfied clients for reviews that you can publish on your website and post success stories that showcase how your construction project succeeded at delivering what the client wanted.
Get Ready for Weather Changes
As mentioned earlier, extreme weather events in both winter and summer can pose risks of various kinds, including to your staff’s well-being and productivity, as well as the maintenance and working conditions of your tools, materials, and equipment.
What to Do in Winter
To begin with, make sure that your work schedule is planned according to the weather forecast for the following days. If, for example, it looks like it will be cold and overcast for the first three days, but snow is expected later in the week, make sure that you plan the right tasks and activities on the right days.
Similarly, remember that the days are much shorter in winter, so you’ll enjoy fewer daylight hours. So, ensure you plan for slightly shorter shifts during those months and that the bulk of your day’s work is completed before sunset.
In the case of heavy snow, it’s wise to have a solid snow removal strategy to access the construction site while also preventing the buildup of snow in high-traffic spots.
What to Do in Summer
Just as you did for your winter work, you will want to plan your schedule carefully if you embark on a construction project in the middle of summer. For example, it’s a good idea to begin work early in the day, take a break during the hottest hours, and continue work in the evening, when temperatures usually go down.
Similarly, you’ll also want to allow your workers access to cool drinking water and the opportunity to take plenty of breaks in a shaded area. Consider adding a few fans or air conditioning units to make the break area even more restorative, ultimately allowing your staff to be better prepared to tackle the rest of the work later on.
Working Through the Seasons
Successfully streamlining projects is crucial for the construction industry due to its inherent complexity and duration. By taking proactive steps to address seasonality-related challenges, you can ensure your business remains profitable year-round. Embrace innovative marketing strategies and consider options like lines of credit to navigate fluctuations in demand. By implementing these strategies today, you will position your construction business for sustained success, regardless of external conditions. Take action now, and watch your efforts pay off in the long run.
About the author: David Becker is a Growth Marketing Manager at Leadfeeder, a powerful website visitor analytics software. He helps drive Leadfeeder’s growth strategies and demand generation with a keen focus on mental health and well-being in the workplace.