Whether you are new to the construction business or have been in it for a few years, growing and expanding can be a challenge. Sometimes growth can come naturally with opportunities presented before you. Other times it’s not as straightforward.
I believe construction companies that grow successfully are often those that are business oriented first and builders second. This doesn't mean that building skills take second place. But it is my personal belief that 90% of all construction company problems, both in the office and the field, can be traced back to poor management.
There are many ways that you can grow your company. You can take on larger projects, increase your project workload, add a new scope of work, hire additional key employees, purchase more equipment, purchase real estate, and/or update technology.
Growth can trigger a chain of events that affects outer parts of the business, forcing those areas to grow as well. For example, taking on more work may force you to hire more employees and purchase additional equipment. It may also affect cash flow, areas of administration, safety, and insurance.
Here are some solid ideas to help you grow your business.
- Hire someone with experience. For many contractors, stepping into the next phase of growth can seem natural. For example, a landscaper may have many opportunities to build decks or construct concrete patios to go along with landscaping, which could be a great fit. Hiring someone who has strong experience and is seasoned in decks or concrete can make the transition easier and more profitable.
- Protect your cash flow. When expanding your business, make sure you don’t interrupt the business that is bringing in the company’s main revenue. If you don’t have a line of credit to access capital when you need it, talk with your banker. Or you may need to increase your credit in some cases. I personally believe in not getting overextended at the bank and that you should try to position yourself to be able to finance your own projects. This will save you interest and strengthen the company.
- Delegate. Developing your team and managing people is at the heart of delegating. This can free you up from tasks that others can do and give you more time to focus on other things. Delegating can build self-esteem within individuals by showing you have trust and confidence in them. It can also benefit the entire team’s efficiency, workload, communication, and flexibility, which can lead to improved teamwork. Don’t be scared to trust others. Delegation can be viewed as a long-term investment that, when implemented successfully, can achieve positive results.
- Use technology. What is out there today, in the way of technology to help your business, is truly amazing—management and estimating software, GPS and security equipment, safety programs, tools and equipment, materials for the job site, and much more. Social media and the age of digital marketing can bring visibility to your company like never before. Photos of your projects from start to finish can be part of an impressive portfolio that can be used on your website to introduce your company and service. Attending larger trade shows can be time well spent. There is so much you can learn about your industry—and it is all in one place. Even many seasoned contractors attend to see the latest technology and make connections.
- Evaluate risk. As you expand your business, evaluate any risk exposure in the office and the field. Having an attorney who understands construction litigation review any changes in your business can protect you in ways you may not even be aware of. Do your contracts need to be updated? Do employees have critical company information that may require you to draft a company/employee agreement (non compete)? Will labor or union issues come up? Are there any regulatory or environmental issues?
- Insurance. When you make changes to your company, always check with your insurance agent to make sure you have the proper coverage in place. Working with an insurance carrier who fully understands your construction business can help ensure your risk is properly evaluated and protected.
Growing your company is linked and motivated by your vision for the company’s future. I believe slow and steady growth is always better than fast and unstable growth. It takes time to present yourself professionally, to be competitive, and to improve your chances of winning bids and capitalizing on opportunities. It’s experiencing those growing pains that sometimes drives the best results.