No matter how established you are as a company, or whether you’re new to the construction industry, growth is never a bad thing. It also shouldn’t be too difficult if you follow the right strategies. By focusing your priorities on the correct things and forming the right partnerships, you can easily increase business.
Here are some effective practices and methods to follow to grow your construction business.
Use Funding
Managing your cash flow is a crucial part of not only succeeding as a business but growing it as well. In construction, where invoices don’t always get paid right away, getting enough cash to pay for materials to take on more work is necessary for growth. You can get funding by simply using your current outstanding invoices as credit.
For some very large projects, it can be very difficult to obtain all the materials needed without getting funding in the first place. For companies that want to scale to take on bigger enterprise-level projects, funding is an important piece to make that growth possible.
Form Partnerships with Others
Communicating with others, whether it’s subcontractors, suppliers, manufacturers and customers, is a must in this industry. Therefore, it’s important to realize that every person you come into contact with is a potential business opportunity waiting to happen. Forming partnerships with the people you already talk to is an effortless way of gaining new business.
Suppliers or manufacturers who often make a specific product will receive queries from customers who are looking for contractors who use this specific product. By making yourself known and available to the manufacturer or supplier, you can potentially get referrals from them. Subcontractors who often work with similar clients you work with might refer some to you as long as you’re referring clients to them as well.
Ryan Thompson, a plumber from PlumbingInformer, mentions, “As a plumber, I often get a ton of referrals from commercial construction companies to work on the plumbing systems for their projects. In return, I’ll provide them with referrals with some of the commercial companies I work with who are planning construction projects in the near future.”
Word of mouth is one of the best ways to grow your construction business. If you can offer incentives to your previous customers to spread the word about you and help you gain business, you can form very profitable partnerships with them. The best thing about this is that it easily scales, as the more customers you gain the wider the word-of-mouth network grows.
Properly Manage Your Team
In the construction business, your employees are everything. Whether you end up with quality finished projects that get you recurring business from happy customers will more than likely come down to the team you manage. By managing your employees properly and keeping them disciplined while rewarding them appropriately, you can help maintain a healthy work environment.
There are different ways you can go about managing your team and keeping them happy. While most companies are aware of things like offering competitive pay, flexible schedules, and training opportunities, there are other things they miss. As a company, have you thought about offering individual coaching, providing fun, out-of-work team-building activities, or even offering tuition reimbursement to your employees? The last, by the way, can provide the company with some decent tax benefits.
Use Construction Software
You can find construction software for just about anything you might need in the industry. You can use it to provide updates to customers, manage the progress each of your employees makes as well as your company’s financials, and analyze where you can improve upon.
One of the most common mistakes in construction is making inaccurate estimations on your estimates and bids. By using software to correctly estimate project costs, you can avoid expensive mistakes that affect your profit or submitting incorrect bids that lose the company potential jobs. In an industry where profits are razor-thin, keeping profits as high as you can allow you to invest in other things that might help you grow.
Prioritize Your Marketing
It’s a fact that you cannot grow unless you’re gaining a steady stream of new clients. While word of mouth and effective networking can help you gain more opportunities, marketing can help obtain an influx of steady jobs continuously. It also helps the company avoid relying too much on current customers which can have disastrous consequences if one of them stops doing business with the company. By having a strong social media presence, along with a strong focus on search engine optimization for the website, you can get a steady stream of new construction leads.
Apart from social media and search engine optimization, bidding on search engine ads can be a profitable way to gain more customers. Whether you do this yourself or hire a company for it, it’s important to know the basics of it. Once you have the correct type of ad down, the rest tends to be easy going by routinely making small changes to it.
Depending on the type of marketing you focus on, you might not get immediate results right away. However, once you get it down right, that initial investment pays itself off in the long run.
Offer Extraordinary Customer Service
By keeping your clients happy and building a reputation as a trustworthy company, gaining new clients becomes much easier. As you start to bid for larger construction jobs, the requirements become more strict, and having a list of happy customers to vouch for you is key to landing these larger projects.
Happy customers are likely to refer you to potential clients. You’re also more likely to get recurring business from a customer, which can help lower your marketing costs if needed. Keep in mind that it’s less expensive to keep a current customer than it is to find a new one.
Focus on Recurring Business
Sometimes, you’ll have to make a decision on which projects to take on if you have a limited amount of resources. You should have a strong focus on customers that can offer you repeat business.
Your networking efforts should also have a strong focus on talking to those who can offer recurring business. Property managers who can sometimes be in charge of up to 100 properties need companies to work on projects for the properties they manage. Architects tend to be the first point of contact for clients who are looking for new developments. By focusing your efforts on the right people, business growth becomes straightforward.
Consider Specializing in a Niche
While keeping your company open to general jobs is a great business move, becoming the best company in one specific niche is a better one. If you build the reputation as being the go-to company for a specific niche — for example, school construction — you can get a ton of business from that area.
With that in mind, you don’t want to specialize too much; otherwise, you run the risk of narrowing yourself down to only doing specific jobs. Niching down doesn’t mean you have to close yourself down to other jobs; it just means you put more focus on learning the best practices and excelling in a specific area when compared to other more general areas.
Growing your business takes time and effort. There are multiple ways you can go about it, but by focusing on the right steps, you can take on more customers, land recurring business, and gain a steady influx of new customers, which will impact your company’s growth in a positive manner.
This is a guest post from Mark Soto, a construction freelance writer for ContractorAdvisorly. He also works as a roofer for a family-owned roofing company in Milwaukee, Wisconsin.
Further reading
- 5 Steps to Launching a Construction Business in an Economic Downturn
- Strategies for Running a Successful Construction Business
- How to Protect Your Construction Business from Late Payments