Managing a general construction or construction management firm can be an exhausting job. It involves juggling many different departments and factors, and often some aspects can be put to one side in favor of more pressing matters. Unfortunately, business growth can often be one of these.
While it’s not unreasonable to assume that an effective construction firm management strategy can result in business growth, this isn’t always the case. We at Construction Guide believe that business growth should always be at the forefront of every strategy and business decision. That’s why we’ve put together this guide to explain how you can re-center your management strategies to focus on construction business growth.
Simply saying that you want your business to grow isn’t enough of a goal when it comes down to planning your strategies. Instead, you must think about what business growth means to your construction company, and what results you want to see from any new strategies.
Realistically, you should draw up a plan that focuses on 5 main goals that reflect business growth. And remember, these don’t always need to be about increasing profits (although that’s obviously a desirable goal). For example, you might consider increasing your bid-win ratio as a fundamental goal, or increasing your on-time completion rate.
The bottom line is that goals will be specific to your company and your position within the market. You might set your top goal as becoming an industry leader, but how does that translate into short- and medium-term goals for your company? This is the strategy you need to decide and implement.
Decide on your goals
As mentioned, goals don’t always need to be about profit, as business growth manifests in a number of ways in the construction industry. That said, your goals should always focus on bringing value to your business, although this doesn’t have to be monetary value. For example, your goal might be to improve customer satisfaction, which results in more long-term growth through positive referrals.
As you can see, focusing on business growth doesn’t have to entirely revolve around your profit margins. Many of these goals instead focus on improving productivity and employee and client satisfaction. While some goals may require you to invest more money upfront, they all result in long-term business growth.
When it comes to translating these goals into workable strategies, many shouldn’t be too difficult. Your main goals will realistically revolve around employee satisfaction and improved productivity, so bear these in mind when developing strategies for the coming period. Here are some example strategies to consider when setting out your business goals.
Many of the jobs in the construction industry require specialist knowledge, whether employees are involved in planning, construction, or administration. What’s more, training new employees in your company’s specific processes takes time and money, which is definitely better spent elsewhere.
But how does this translate into strategy? In short, you want to retain your employees. If you’ve invested time into training them, why would you want to make it tempting for them to go elsewhere?
To begin with, make sure you’re paying your employees a wage that reflects the work they do. Similarly, review the benefits you offer and consider adjusting these to make them an appreciable bonus. Also, foster a work environment in which your staff feel valued and that gives them the opportunity to progress if they want.
However, you should also make your employees accountable for their actions and incentivize them to produce quality work every time. The flipside of this is that you need to not tolerate those who produce poor quality work. While the threat of being fired isn’t a great incentive to produce quality work, there’s no reason why employees should feel they get to coast by on sub-standard performance.
For construction firms, winning a bid is the first step in a project’s journey. It can be tempting to just bid on any and every job you see, as this will surely result in some wins, right? While this is true, it’s not the best use of time and money and we at Construction guide make sure your time and investments are properly allocated.
Instead, focus on bids you’re confident you can win. A good example is lawyers; the reason why many high-profile lawyers have such great win ratios is because they don’t take on cases they don’t think they can win. This might seem harsh, but if you want a good win ratio then you need to get rid of the losers.
However, it’s not always that simple. For example, you might focus your bidding strategy on several local clients or projects in an attempt to foster loyal and long-term relationships. This can be much more effective than bidding on a few projects on the other side of the country.
Similarly, don’t bid on projects with more than 4 applicants, as this will greatly improve your chances of winning. You should also consider setting yourself an exact project range, suitable for you particular niche as this will allow you to focus your efforts on achievable projects, rather than stretching yourself too thin.
That said, it can still be beneficial to bid on the odd project that might be out of your range; taking risks is often a good way to win business. Just limit the amount of risky bids you make in order to not overspend.
Another key area to focus on is quality of work, which should realistically be your main priority at every stage of a construction project. Quality work results in fewer callbacks or safety issues, which equate to lost time and productivity. Therefore, quality work should always be number one standard.
Begin by consistently enforcing company rules regarding quality. Do you feel some departments don’t reflect the overall level of quality you want? Invest in training to ensure everyone is on the same level. Every employee should know the standard expected of them, and they should want to achieve this.
Similarly, make every effort to only hire subcontractors that share your commitment to quality work. You should treat these subcontractors with respect, but should also be firm with your expectations; after all, you are paying them for the service they provide. Also, they effectively represent your company while working on the project, so always remember this.
Quality doesn’t just refer to on-site employees though. Employees on the office side need to also reflect the level of quality you expect, whether this is in administration, planning, HR, or management; everyone should be working to the same standards. Your team is only as strong as the weakest link in the chain.
Finally, don’t overlook safety as part of your quality strategy. Provide staff with regular training, carry out regular site inspections, and provide all the relevant safety equipment. Employees who feel safe at work are not only happier to turn up, but will also work harder because they’re not concerned about their chances of having an accident.
Although it can be tempting to take any profits home, investing them into strategies that produce growth is surely a better use of the money. Consider using a minimum of 25% of your profits as investment into income-generating processes.
These could be training schemes to improve productivity and staff retention, or switching to a paperless system to improve productivity, or something non-business related. Consider your company’s areas of weakness and begin with these. Improving the strength of your business as a whole will only increase its ability to generate profit in the future.
While it can be tempting to use the idea of profits as a motive to completely reinvent your company image, this isn’t the best use of your time. Construction Guide’s team will help you to begin by deciding on your main goals for growing your business – whether this is building your client base, improving your bid-win ratio, or something else – and then develop your strategy around these.
Once you have a good handle on targeting specific areas of weakness, you can then expand into other areas. However, don’t allow yourself to be stretched too thin, as it’s much better to vastly improve one area than it is to marginally improve several. And remember, business growth is at the forefront of every decision you make.