For those in the construction business, laying the foundation for a house can be a piece of cake. But what about laying the foundation for your business’s growth? When you’re looking to expand your construction business, you have to make sure you have the right foundation. Otherwise, your business may collapse.
In this article, we break down sustainable strategies you can use to help you scale your construction business.
How to know if your construction business is ready for growth
Choosing to expand any business takes some major consideration, analysis, and thought before deciding to take the plunge. If you’re thinking about expanding, here are some signs that you should take the leap:
- You have more incoming requests than you can handle | Finding there’s no room in your schedule for even simple phone calls or consultations? It might be time to add some help to your team to screen those initial phone calls and quotes.
- Your schedule is backed up months in advance | The phrase “booked and busy” comes to mind, and your business fits that bill. If you’re backed up more than 6 months in advance, expanding your business can help reduce the amount of time customers have to wait.
- Your profits are far exceeding your business expenses | Sure, businesses aim to be profitable. But if you have a surplus in profit, why not invest those funds back into your business?
3 barriers to growth in construction
When you’re looking to grow your business, it’s important that your growth is both intentional and sustainable. According to the Bureau of Labor and Statistics, approximately 1 in 5 businesses fail within their first year. Too much growth too quickly is often the downfall for new businesses.
If you’re wanting to grow your businesses sustainably, keep an eye out for these barriers that may get in your way.
1. Taking on too much work
Saying yes to all of the projects coming your way seems like a sure fire way to grow your business—right? While doing more work will earn you more money, stay conscious of your team’s ability to manage. If you don’t, you run the risk of running your crew down, and the quality of work may decrease. If you want to guarantee customer satisfaction, only take on what your team can handle.
2. A drop in service quality
When you take steps to grow your business, that requires delegating more work to team members. That means stepping away from being super involved, which can be tough. And unfortunately, that may result in a drop in quality if your team doesn’t take the same level of care into their craftsmanship.
This can be avoided. Make sure the employee you delegate major responsibilities to shares the same level of care and consideration to the end product. Look at the people on your team who are consistently performing well, and crafting good work without being prompted.
When you’re looking to add new people onto your team, make quality a top priority in your candidates. You can screen your candidates by asking them for portfolios for their work, or conducting reference checks from past managers.
3. Not investing in the right tools
If you’re looking for places that you can save on costs, you don’t want those to be the tools you use to conduct your business. Investing in good quality tools and equipment is important both for your craft and the safety of your team. If one of your tools suddenly breaks in the middle of a job, this can unexpectedly set you back thousands of dollars and hours of work.
Instead, consider introducing consistent times to both upgrade and maintain your existing tools to ensure that they’re in good working order. That way you can carve a set budget aside specifically for the maintenance of your tools. The alternative? Receiving an unexpected expense in the middle of a job.
Tip: This doesn’t just include hammers and nails. A tool like Homebase helps you pay your crew, create schedules, and share info. The more seamlessly those tools work, the better off you’ll be.
The importance of a construction business plan
Creating a strategic plan for the growth of your business is a smart way to start your construction business expansion. A construction business plan will help you understand where your business is, what kind of growth you want to achieve, and what you need to do to get to that point.
A construction business plan commonly includes:
- Business summary or executive summary | This is a high level overview of your construction business, and what goals you want to achieve.
- Company description | This details your company, what services you offer, your team members, and how you plan to conduct service.
- Competitive research | What your competitors offer, their pricing strategy, how they market, and how your business is different.
- Financial overview | Your current financial status. Includes regularly occurring expenses, your current profits, and any loans or funding that you currently have.
- Marketing strategy | How your company plans to find new clients, both digitally and otherwise.
Strategies for growing your construction business
There are a handful of strategies that can help you grow your construction business, but deciding where to focus can be a challenge. Here are different areas that you can focus on to help your construction business expand.
1. Implement smart marketing strategies
Marketing strategies can help increase the amount of incoming quotes and requests your business receives. This helps expand your existing client base. While word of mouth is the most common way construction businesses grow their clientele, investing in good marketing strategies can help.
Start local: list your business on common business listing sites such as Yelp, Angie’s List, or NextDoor.
Updating your website with good lead capturing strategies is another idea. Add something simple like a quote request or a call back form, making it easy for clients to contact you. Bonus: you can easily pick and choose which incoming clients you’re be willing to work with.
2. Hire the right team members
If you have more customers to service, you’ll have more work to complete. As much as you would want to do all the work alone, you’re going to need some help if you’re looking to take on additional clients.
Trying to find the right people to help expand your business is challenging, especially when it comes to the construction industry. You want to make sure that your contractors have relevant experience, certifications, and that the work they complete is to your quality standard. Using a hiring tool like Homebase can help you source new team members quickly and onboard them onto your team with ease.
3. Specialize in your own niche
A jack of all trades is a master of none, and construction clients want someone who specializes to ensure they’re getting the right person for the job. The more you generalize, the harder it is to find clients.
Specializing makes it easy for past clients to refer you for specific projects, and it’s easier for new customers to find you. Identify a specific subset in construction you like to do. Maybe you like working with cabinetry, or you’re good at leveling flooring. Whatever it is, specialize in it, create good work, and happy clients will share the word.
4. Partner with other business owners
Consider how your construction business interacts with other related businesses. For example, if you’re an electrician, you might want to partner with some real estate agents who specialize in selling fixer-uppers. If you enjoy doing tiling work, maybe partner with an interior designer who works with kitchens and bathrooms.
Strategic partnerships can help provide you with a steady stream of business without much effort. As long as you do great work in a friendly way, people will be willing to partner with you.
Business tools to help manage growth
Construction workers have an entire belt of tools to get their work done. But often, construction business owners fail to stock the tools that can help manage their business. Software and other digital tools can help you stay organized and keep the administrative side of the business flowing without much heavy lifting.
These are the best tools to consider to help with construction business growth:
- Construction project management software | This can help keep your clients, quotes, and workflows organized so you can easily tell when projects are on track or at risk.
- Website management tool | Organize your website and manage incoming digital quotes with website management tools. Most website hosting websites offer this as part of your package.
- Business management software: Think about a tool like Homebase to help cover off all your administrative tasks. Payroll, hiring, time clocks and more: completely taken care of, and entirely integrated. Nice.
Construction business FAQs
What type of construction business is most profitable?
The type of construction business that’s often the most profitable is general manufacturing. If you’re a small business owner looking to identify a niche, looking at specialized segments within the residential construction industry can be a good place to start.
How can construction businesses maximize profits?
A construction business can maximize profits by creating a sustainable business growth plan and following the strategies outlined in that plan. Some things that you might find in a construction growth plan may include specific marketing strategies, key hires, and plans for handling new clients.