Small businesses operating in the construction industry that want to grow and develop need to ensure that they have a structured plan in mind when it comes to engineering that growth. You wouldn’t think about building an office block, a carpark or constructing a highway without a set of plans and blueprints, and the same goes for the strategic development of your operation.
It is important obviously to focus on the day to day side of the company, with the projects and jobs out in the field that have to be carefully managed and overseen. However, getting away from the role of the foreman and stepping into a CEO role to manage the direction of your construction business is going to have to be a priority. In the same way that you mastered your tools of the trade in the building world, you are equally capable of taking on the skills of management, and there are 5 concepts that you will need to master in order to move your company forward.
Review your internal operations
Every building and construction project needs sound footings and a good base upon which to build, so you have to start with a review of the internal workings of your organisation. This is not as difficult as you imagine because it mainly involves asking yourself a number of questions. You do however, have to be prepared to take the blinkers off and list all the negatives as well as the positive aspects of the company you run. If you ignore all the shortcomings and allow yourself to be subjective at this point then you need to face the facts and get a third party in to “review” your business processes and procedures. There are consultants who can put this in place for you or you may be able to connect with some form of business support from your local council or trade organisation.
If this is an area that you are going to find difficult to do, then you need to be thinking about what role you will play in moving your company forward. But, if you have been successful so far, it would indicate that you have got what it takes to objectively review and polish your internal operations. Carry out a SWOT analysis, which involves listing the company’s Strengths, Weaknesses, Opportunities and Threats, and look at how you will address each issue.
Set out a plan of communication and feedback starting with key personnel, managers and finance officers. Ask if the business is financially stable, and if not, why not? Gather feedback from customers as well as workers on the ground, and if you have never asked for customer feedback, then ask yourself why? See if you get repeat work or customer referrals; if your customers are not happy then you need to start with some basics such as reviewing the service and after care offered, training of staff members, review where and how you market and advertise yourselves, etc. Have you got a high rate of staff turnover and, if so, why? Could it be low wages, bad conditions or are they not being treated properly by the supervisor in charge?
Once you have analyzed areas that are not working well, you need to reorganise and ensure that all the staff working for you have the correct skills to carry out the work involved. If you cannot address all skill shortage areas then you will need to bring in professionals to help out, and this can be on a temporary basis as well as part or full time, depending on your needs.
Source other areas of funding
As a small business it is a real problem keeping on an even keel with the cash flow situation, juggling payments to suppliers, wages for staff and other business expenses while you chase unpaid bills and invoices. Now you need to sit down, either with a financial adviser or bank, and, as a contractor, start to look at different ways of being able to access other funds. Build up a professional portfolio and business plan that you can present to finance organisations, and look at accessing different lines of credit or banking loans as well as overdraft protection.
Talk to your industry sector trade organisations or chambers of commerce and get their recommendations and advice on whom to approach for funding and the way in which to approach them. You have to step up and demonstrate that yours is a business ready to take the next step and grow in a steady fashion. A professional portfolio of bank statements, tax returns and financial returns from work undertaken, along with a full inventory of assets, is part of demonstrating your professionalism.
Develop a strong customer service team
Word of mouth is very powerful and the smaller construction companies do well because they take time to get to know their clients and become a “trusted” contractor. Capitalize on this and aim to exceed your customers’ requirements by building a dedicated customer service team and ensuring that the ethos of good customer service is embedded throughout the business. Encourage feedback from your customers and make it easy for them to interact with your business via the website and over the telephone, which leads onto the next stage…
Develop an effective marketing strategy
It has never been easier, with the rapid growth of social media, for your clients to interact with your business, but you will need to take your marketing to the next level. You need to look at establishing a professional website and one that is mobile friendly. It costs very little to get your firm onto LinkedIn, Twitter, Facebook, Pinterest, Instagram, Yelp and the like.
Make sure that you have a recognizable brand or image that is replicated on social media pages and on your website, and a logo that can be replicated on corporate clothing and letterheads. Offer incentives for your customers who pass on referrals, and build up a strong marketing database. Keep all marketing activities up to date, including posting regular and relevant updates on your website and Twitter feeds, which can greatly help to generate word of mouth referrals.
Review your prices and debt collection processes
If you cannot manage your cash flow and cover the costs of your overheads, you will fail as a business. As you work through the above stages you may find you need to review the cost of your services in order to cover costs. This might involve researching what your competitors charge for the same or similar services and testing the market to see if you can obtain orders at your new pricing level (should the prices increase).
Getting paid on time is particularly important for small businesses, and perhaps more so for businesses in the construction industry that rely on smooth cash flow to operate and expand. If you find yourself constantly having to worry about debt collection, it might be time to review your payment processes and terms to see if you could improve on that. After all, you should be spending your time on working and growing your business, not chasing up late payments.
The construction industry is a competitive marketplace, and many are finding that it is not enough to just do their job and carry out their projects, they also have to constantly work at developing and growing the company in order to survive. If you’re looking to expand your business and grow large-scale, these guidelines are a great place to start.
About the author
Grant Wigney is the owner and director of National Waterproofing and Industrial Flooring (NWIF), one of the leading experts in epoxy flooring in Melbourne. With more than 25 years of experience in construction and building under his belt, he has seen the industry evolve over the years and knows what it takes to keep a company current and successful.