You probably know old-school general contractors or subs who still keep all their estimates on paper and receipts from last-minute trips for supplies in a shoebox. This method worked years ago, but it won't begin to support a growing commercial construction company today. If you want to build a stronger commercial construction company and grow every year, you'll need to work hard to improve your relationships with people, your use of technology, and put together a strong business plan. We've put together five tips that can help you strengthen each of these areas for your commercial construction business in the year to come.
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If someone else wrote a business plan for you, update it yourself. Work on the financial projections first. Give an honest look at how many employees and subs you'll need if you're going to take on more projects in the year to come. Work on your cost basis for manpower, overhead, and look for areas where you can cut costs or charge more.
Forecasting and analyzing your costs in different functional budget categories is where programs like ProEst can make a big difference. You can easily see jobs where you bid well in the past and made a good profit. You can look at trends with material costs, labor, tools/equipment, and overhead and profit. Working with a construction management program will help you to plan more effectively and write a stronger business plan.
You can also use the reports from programs like ProEst as a model for analysis. Locate a job where everything went well. Use this job as a model for where you'd like your business to go in the future and beyond. People may roll their eyes at the saying, "if you fail to plan, you plan to fail," but there's a lot of truth in it.
Most of your work is going to come through referrals. You'll also want to cultivate relationships with developers and others who are putting big projects together.
According to Construction Business Owner magazine, many construction business owners will say that developing their customers is their top priority. The reality is that the majority of owners don't follow through the way they should. Have you taken your top 5 or 10 customers out to lunch in the past year? Or gone golfing, fishing, or any other activity you both enjoy?
You're likely to have a few clients who make up the majority of your business. Keep in touch with them via cards, emails, or personal thank-yous. A kind word here and there will help keep your relationship strong. If you're looking to grow your business, you should share your ambitions with them when it's appropriate. Physical touch, or seeing your clients in-person, is invaluable, too. If you spontaneously do something good for a valued client, they will remember it for a long time.
We touched on this when we encouraged you to write or update your business plan. You'll see your construction business in a new way with a cloud-based construction management system. If you're currently blending pen and paper estimating with spreadsheets, it's hard to picture how differently you can view information with a program designed for the construction industry.
You will also save time switching to cloud-based document management. McKinsey's surveys and projections for the construction industry between now and 2030 list some barriers to success and growth. They include:
You can strengthen all of these areas by using cloud technology to manage your documents in the cloud, not on paper or a single computer.
How many times have you paid a regular bill for your construction business and wondered if you could save money? From your phone, data charges, fuel, and equipment costs to insurance, you can look for ways to save without sacrificing performance. Insurance is one area where you know you have to meet all of your requirements, but it can also be one place to look for savings.
If you've had the same insurance carrier for years, you should take some time to request new quotes from at least three other companies to see if you can get the same service and coverage for less. You can also look for better deals on mobile phone and data services.
Mobile construction tech is helping employers to improve safety training, prepare RFIs, and make time and cost adjustments on the job. Not just any tech, however. You'll want to integrate your on-the-job work with your in-house duties. You can optimize progress reports and job tracking with mobile technology. Anything you can talk or text about is easier with mobile technology, including workflow management. Use the time you save with mobile tech and integrated construction estimation tools like ProEst to improve the human parts of your business that you could have been too busy to handle the way you'd like. Not only will you cut down on mistakes that cost time and money, but you can also plan for the future, keep up with clients, and continue to build your commercial construction business.
If you would like to learn more about how ProEst can help you improve your construction company’s accuracy and performance to increase your profits, feel free to schedule a free 1-on-1 walkthrough session today!