Whether you’re new to the industry or a seasoned pro, running a successful construction business is a challenging job. It’s easy to get bogged down in operational details and forget the basic rules of managing a business well. This is particularly true when things are running smoothly. After all, if you’re already doing great, why rock the boat?
Well, for one thing, “doing great” is a relative term. There’s always room for improvement, and a quick review of the basics doesn’t take much time. Who knows? A little tweaking of your business practices might just take you from doing “great” to doing phenomenal.
So what are our top five tips to running a successful construction business? Check out our favorites here.
No. 1. Keep Learning.
Whether you’re new to the construction game or have been in the business for 20 years, you can’t grow your business if you don’t learn. Building ongoing education into your regular routine is the best way to accomplish this.
Learning doesn’t need to take a lot of time. Subscribe to some trade magazines and online blogs, and read the articles that challenge you to open up to new ideas. Take a class a few times a year, either in person or online. And make sure that you attend at least one major conference annually. It’s a great way to pick up on industry trends, make new contacts and increase referrals at the same time.
No. 2. Up Your Game
Let’s be honest. The public perception of most construction contractors isn’t all that great. Many people see the profession as generally unreliable, and with good cause. Research shows that construction contractors are late (or don’t show up) for appointments about 30 to 40 percent of the time.
One way to set yourself apart, then, is to show your clients how professional you are. Start by:
- Returning all phone calls promptly.
- Showing up on time for every appointment
- Having professional business cards
- Dressing appropriately for client meetings
- Preparing a detailed, written contract for every job
No 3. Qualify Your Clients
When you’re trying to build a business, it’s tempting to bid on every job. But not every job is going to be a good fit for your company, and not every client is going to be someone with whom you want to work. So before you begin selling yourself, qualify the client first. Find out:
- What they want to do
- When they want to start
- How much they are willing to invest
- When they want the work done.
- Who will make the final buying decision
- What is their time frame is for moving forward
Getting these questions answered up front will save you from wasting time on jobs that you really don’t want or require more resources than you have to invest. Remember, running a successful construction business is about choosing wisely and making every job count.
No. 4. Use Fixed-Quote Pricing
The best way to invite disputes with your clients is to structure your contracts on a “time and materials” basis. Yes, these kinds of jobs sometimes work out. But sooner or later, you’re going to encounter a customer who doesn’t want to pay and find yourself in court. Of course, this could happen with any job. But a well-written, carefully crafted fixed-price contract is your best weapon if it does.
No. 5. Don’t Underbid
As a professional construction contractor, you know how much you need to make to turn a profit. But when you’re competing in a hot market, it’s tempting to compromise and shave a little off your markup to try to win the job. But that’s rarely a good idea.
Research shows that price is not the top reason why clients select a contractor. (In fact, it barely makes the top 10.) What clients want most is a dependable professional who will take care of their needs and provide quality work. Sell yourself, not the price, and you will usually come out ahead.
Running a successful construction business is not just about doing a great job. It’s just as much about knowing how to position yourself and your company so you stand out from the crowd. At The Carmoon Group, we specialize in helping construction professionals succeed. Whether you need help with financing, insurance or a risk-management plan, you can count on us to for sound advice. So give us a call now or contact us online. We’ll get back to you right away.