SCALE A SUCCESSFUL  CONSTRUCTION COMPANY

BUILD A CONSTRUCTION BUSINESS PLAN

Creating a business strategy brings the focus to your company’s 1 year, 3 year, and long term goals and helps a team like yours expand with actual intention and focus on the mutual goal.   The main point is a planned path to get you there with your team. Transparency is key.  Communication is the common issue in most companies.  Being open with your staff helps them to “Buy In” to your vision. 

BEGIN BY ASKING YOURSELF THE FOLLOWING:

  • What are the company’s values?
  • What is the expected growth in gross revenue and net profit margins?
  • What key hires will we need to get there?
  • What else is needed to attain your goals? (Financial, Culture, Accountability?)

Now drill down into the specifics. Get very granular and create the environment of collaboration and communication with your top tier staff. 

The key elements of a strategic plan will include:

COMPANY VALUES

The ideals that influence your decision-making in good and bad times.  What are the standards of your company?  Examples are: quality of work,  attention to detail, company culture, result oriented thinking.   Most companies believe they have the best of each category.  But as in everyday life, there are degrees of each. 

Once the company’s values are determined they must be communicated in every format and in every communication to the entire staff.

BIG GOALS

Visualize where you want the business to be in five years – include key measures of success. Ask your executive team if they are in line with the goals.    Determine what is needed to achieve them.

ANNUAL GOALS

Follow the S.M.A.R.T. goal methodology 

(Specific, Measurable, Attainable, Relevant, Time-bound).

The importance of goal setting has been diluted because of the “feel good” stigma that has been built up by the term being over used and underutilized. 

YOUR INITIATIVES

Projects and upgrades need to be in place to achieve and sustain growth. What is the specific and actionable plan to attain the necessary steps to make your vision a reality.

ANNUAL CRITICAL NUMBERS

Establish what key numbers that factor into the growth of the company that will be the measuring stick.  These metrics are the pulse of the year.  This is the most important segment to communicate with your entire staff.  This is the backbone to all levels of accountability. 

In order to chart your path for growth and build a stable infrastructure in your business, your key executives need to completely understand how the company makes money and how it loses money.  Not only on a high level, but on a very granular level.

NAIL DOWN YOUR ORGANIZATIONAL STRUCTURE

Define who does WHAT, WHEN and WHY in the business.  Ultimately, this creates accountability within the team.  When each position is tied to clear responsibilities, you can better understand how much ROI is generated per person.

HOW TO BUILD AN ORGANIZATIONAL STRUCTURE:

  • Define each role within the company. 
  • Then layer in the responsibilities attached to the specific role in the company.
  • Identify any gaps between each role that may create gaps in communication, work flow, responsibility, and ownership for the project. 
  • State how each person contributes to your business’s quality, volume and profit.
  • Outline the ways information flows between levels within the company.

THE BENEFITS OF HAVING A CLEARLY DEFINED ORGANIZATIONAL STRUCTURE INCLUDE:

  • Faster decision-making
  • Improved operating efficiency
  • Greater employee performance
  • Better communication
  • Increase in employee job satisfaction
  • More profitable resulting from efficiencies

INVEST IN HIRING AND ONBOARDING

People are essential to the growth of your business.  So, investing in talent should be a major factor in your company’s growth strategy.

Here’s what to think about when it’s time to hire:

  • Your company’s vision and how many people you will need to get there
  • What roles will be coming up, and what skills will they need
  • How you’ll build a brand to attract high performers and retain the talent you have
  • How to hire for a role you don’t understand

Investing in your current staff is equally as important.  Incentive based bonuses have proven to enhance the accountability throughout the construction industry. 

With transparency of how a projects are priced, and where the profit pockets are, such and labor efficiencies, material utilization, mobilization efficiencies all contribute to the profit of the company.  Creating a bonus schedule to encourage the efficiencies has proven to create larger profit centers and retain valuable people.

YOUR ONBOARDING PLAN

A well-thought-out recruiting and onboarding strategy as well as active construction networking will result in reduced turnover, less stress, higher engagement and job satisfaction, long-term loyalty and business growth.

BUILD EFFECTIVE SALES AND MARKETING CHANNELS

The difference between your sales and marketing channels is this:

Sales is a natural process, while marketing is more holistic and raises awareness of your company and its brand.  Both impact lead generation and revenue, and both have an end goal: To secure business and help grow your company.  Alignment between the two is necessary for business growth.

HOW TO ACHIEVE EFFECTIVE SALES AND MARKETING CHANNELS:

Identify your ideal client profile (the most common characteristics and locations of your current clients that you like to work with)

Build your brand through imagery and key messaging on social media apps (like LinkedIn and Instagram)

  • Seek testimonials and generate word-of-mouth referrals
  • Set goals and track your key performance indicators
  • Ensure open communication between departments

Implementing these strategies will optimize your in-field and online brand presence, attract suitable clients leading to more closed deals, increase word-of-mouth recommendations, boost construction cash flow and even attract potential hires.

CASH FLOW AND LEVERAGE

Positive cash flow can increase your purchasing power.  The construction industry has recently seen shortages of both labor and materials. With more cash on hand, you have the ability to request large orders from vendors, which may secure your order fulfillment if the supply chain is disrupted for any reason.  You also have more flexibility to offer incentives to secure suppliers or labor, such as paying upfront or within a shorter time frame.  Having the proper banking relationship and credit leverage can make the difference between success and catastrophic failure.

IMPROVED FINANCIAL PLANNING AND FORECASTING

If you’re constantly using incoming client payments to fulfill the next bill, you’re not going to see any long-term profitability. Having a consistent cash flow ensures you’re able to more accurately plan resources around anticipated expenses, without always playing catch-up on previous bills.  

This may also help your company take on more projects faster.  If you have a strong financial plan in place and enough capital to cover the costs of a new project, you could expand your revenue streams even as other projects aren’t quite finished up.

STRONGER RELATIONSHIPS WITH STAKEHOLDERS

When you’re paying your subs, employees, vendors and other stakeholders on time, you can establish a reputation as being a good company to work with.

As the industry continues to deal with worker shortages, it’s estimated more than 342,000 new workers will need to be hired to keep up with demand.  If you’re known as the company that always pays on time, it may increase your chances at securing these relationships when the rest of the competition is trying to hire these workers.

CREDIBILITY WITH LENDERS

If you’re in need of business loan or working line of capital , it may be easier to secure financing if you can prove you can maintain a consistent cash flow. Lenders and investors often require financial statements so they can decide whether you’re a risky client.

MORE OPERATIONAL EFFICIENCY

Construction software improves operational efficiencies by aligning teams and driving growth in simple, easy-to-use ways. The ability to invest in technology depends on you having enough cash to be able to prioritize these indirect costs.

With improved operations, your construction company can leverage budget allocations, hit deadlines, ensure profitability and keep customers happy. All of these factors are vital to the long-term success of your construction business.

SLOW DOWN AND BE PRESENT IN THE PLANNING STAGES

Sometimes, errors are made before a project even begins so to avoid this from happening, you need to slow it down. Devote plenty of time to planning in order to figure out the people, processes, information and materials you’ll need before the project begins.

LISTEN TO YOUR STAFF IN THE FIELD

Your workers out in the field are your eyes and ears when it comes to what’s really happening during a project. Give them tools to support this effort, providing areas where they can add comments and messages based on assigned tasks, raise issues and report progress.

INVEST IN MORE TRAINING

Training is critical to staying sharp during a project. By helping your employees develop and master critical skills, you’ll be able to reduce additional contracted work while creating an environment that fosters employee engagement.

Each person who steps onto a construction site should have the training and experience necessary to complete their assigned jobs in a safe and timely manner.

KEEP A CONSTANT FLOW OF COMMUNICATION

One of the most important parts of a project is communication.  Your employees need to know what you expect of them so they can deliver their best results. The best way to increase communication is to adopt mobile technology with messaging and commenting capabilities built in. This reduces miscommunication between your team members, subcontractors and clients.

As mentioned several times in this paper, communication has proven to be the Achilles heal of the construction industry.  Many companies believe they communicate, but the hard truth comes from the staff.  What do they think?  And does ownership feel that the staff communicates with them, or even amongst themselves.   More often than not the case is there is a communication issue.  When we identify the gaps in communication we can better understand what is needed to fill in the gaps in order to achieve the company’s goals, and then make the vision a reality.

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