Do you want to start a construction company but you lack experience? ? If YES, here are 20 sure tips on how to manage a construction business successfully. Managing a construction company or any other business for that matter is not easy. Many people go into the business thinking that contracts will just come their way, and they will start making money, but that is not so.
In order to run a successful construction business, you will need to employ careful planning and you should also ensure that you have all the resources to do your work. To successfully manage a construction company, you have to be flexible, have a sound plan and exemplary organizational skills among other things that come along with it. If you have a construction company that is not running properly, may be a few things are off with your management skill.
In this article, we would attempt to bring to your attention gainful tips that can help you run your construction company to profitability.
20 Tips on How to Manage a Construction Company Successfully
Table of Content
- Put together a dependable team
- Be willing to invest in your business
- Up your networking game
- Be proactive
- Outsource when necessary
- Embrace Change
- Update your certificates
- Encourage more collaboration between teams
- Get a niche for yourself
- Always be available
- Let your integrity guide you
- Get organized
- Never neglect technology
- Make sure your records are always up to date
- Create a Flow of Communication
- Plan for contingencies
- Track your budget
- Embrace Automated Reporting Systems
- Operate with best business practices
- Choose the best customers
Put together a dependable team
A construction company is as strong as its team. This is because construction is one business you cannot carry out on your own. You must have to bring other people into the picture. To ensure that your company runs well, you must take your time to hire dependable, knowledgeable and skilled employees. You should also make an effort to retain your best employees by promoting and rewarding them for their hard work and reliability.
The team that you have working can also be the difference between making profits and losses. A construction business is demanding, and this is the reason why you need people who are fully committed. How do you get them to commit and work hard?
You can start by creating specific goals and sharing them with your team. These goals will make them understand why they show up to work every day and also make them accountable for their activities. Apart from goals, the team must have the right balance. Proper recruitment and training are crucial, plus you should make sure that you motivate them.
This is basically your long-term answer to any micromanagement problems that you may have. By hiring people who are smarter and more talented than you are, you can trust them to handle any assignment on their own without your supervision. This gives you more time to focus on growing your construction business. You will also learn a whole bunch from them along the way.
Be willing to invest in your business
A construction business is not just something that grows on its own; you need to invest a lot of things into it to take it off the ground. If you want to earn more business and contracts, you have to invest time and money into your company. This means that you need to look out for new equipment and technology when needed. You should equally invest in training your employees and actively marketing your business.
Up your networking game
Networking is one of the major ways to market a construction business. You need to put the word out there about the service you render. One of the best ways to network is to join and be active in the local chapter of a trade association in your business line. Networking can be a useful tool to build brand awareness for your company, generate leads and find vendors. Being active and giving back to your community is also a great networking opportunity for your business.
You can’t just sit back and expect more work to just fall on your lap. You have to proactively seek out new opportunities to retain and grow your business. You should constantly reach out to property owners, architects and general contractors to find out what projects they have on the horizon.
There are different reactive and proactive steps a construction leader can take to achieve safety on their job site. By using basic data access and reporting techniques, companies can answer the ‘what happened’ and ‘where, when and how often?’ questions.
Outsource when necessary
There are a couple of facts that you need to accept: one, there are only 24 hours in a day; and two, you aren’t perfect. This means that you cannot do everything by yourself. It’s never possible especially in a construction company. Do what you can yourself but get the professional help you need to do things right, avoid costly mistakes, increase the likelihood of success and maximize the results for your all your efforts.
You can also start outsourcing certain tasks so that you can relieve some stress and focus on growing your business steadily. For example, accounting can be nerve-wracking and time-consuming. So, why not contract out all of your bookkeeping and accounting needs to a freelancer or CPA?
Construction is an evolving industry. It seems like nearly every day there are new elements to consider, new materials available and a shifting workforce. While it can seem easier to keep things as they always were, businesses must accept change in order to grow. As a leader, it’s your job to adapt and set the tone for the rest of your company.
Update your certificates
A misconception in any industry is that once you get your initial certification, you’re all set. While nothing can replace experience in the construction industry, there are certifications that will benefit your business.
For instance, the push toward sustainability is a trend to follow. It’s becoming more prevalent in the real estate markets and there are expectations now for builders. Take the time to get training in sustainable building practices and then showcase your capabilities to clients. Separate yourself from the competition.
Encourage more collaboration between teams
The construction industry is falling behind other industries in terms of productivity. So while the industry might be booming with projects, your teams are not working as effectively and efficiently as they could be.
Experts claim one of the major productivity hurdles is the way a construction company is set up. A construction project has so many workers participating in their individual tasks. They are working in different groups. For this reason, there seems to be an aversion to collaboration inside the job. This practice needs to change if you are to build a formidable team. You should look out for ways to better integrate your workforce into the job.
Get a niche for yourself
There are so many different areas of contracting, a interest to carve a niche for yourself. It will be in your best if there’s something in which you specialize, and you must make that known. Promoting your company as superior in one specific niche, whether it be window installation or roof repair, is a great way to ensure that you’re the one a client calls when the window cracks or the roof starts to leak. Even if you’re a general contractor, you can still offer a more broad spectrum of services while branding your company as “the best” in A, B or C.
Always be available
This step comprises two parts. First, no matter what, you must remain available to your customers. Construction can be a confusing process for those not familiar with it, so your clients may have questions or simply want to be updated on how things are going. The more time you set aside to hear them out and alleviate their concerns, the more comfortable they’ll feel hiring you in the future or recommending you to a friend.
Second, staying involved also means personally showing up to supervise on site. Obviously, you can’t be everywhere at once, but it’s important that both your clients and employees know you will be popping by regularly. This will show your customers that they are a priority and will remind your employees that they need to do their best work.
Speaking of customer service, your prospective customers want to talk to an actual human being and not a robot during normal business hours. Of course it’s asking a lot to have someone handle the phone all day, but if you don’t want to lose customers to your competitors, then that’s necessary.
One way to get around this is by sending business calls to your cell phone when you’re out of the office. Even if you can’t get to the phone, you can probably call the customer back faster than waiting to get back to the office.
To avoid any confusion, clearly state your business hours on your business cards, website and social channels, and of course state your physical location. If you close at 5 p.m., then a customer shouldn’t be upset that no one is answering the phone at 8 p.m.
It is also recommended that you set up automated email and social media messages during off-hours. A simple message informing customer that their message was received and they’ll receive a response within 24 hours should be enough to keep them satisfied.
Let your integrity guide you
It might be tempting to go with less expensive materials, but it’s important to keep in mind that often, saving now means spending later. Make sure that all the equipment you work with is up to the task and can withstand the test of time.
For example, investing in stainless steel screws might be a smart move when working on a location vulnerable to wet weather conditions. Customers may not be well versed enough in construction to know the difference, but they’ll certainly notice if things start to rust or break down.
Keeping everything in order is crucial to running a smooth business. You want to maintain thorough bookkeeping in order to ensure you’re sticking to your budget and, of course, getting paid for your work.
This also means tracking how much time and energy you need to dedicate to every kind of service you offer. This will prevent you from spreading yourself too thin and taking on too many clients or tasks at any given time. It might seem like more customers are always better, but that’s only true if it doesn’t require you to sacrifice the dedication you can give to each one.
Never neglect technology
The construction industry is information intensive. As a result, you need to embrace new forms of technology to achieve time, cost and quality goals of whatever projects that you undertake. As the projects pickup, you need to avail crucial information that enables task control, data integration and even communication with suppliers.
Therefore, make use of technological advancements such as cloud computing for increased freedom and access to information. You will also need construction management software to manage the different processes that go with construction such as planning, organizing and managing resources. This software also gives you the ability to execute projects efficiently and thus increase profitability.
Make sure your records are always up to date
This is another way to exploit technological advancements for the benefit of the business. Maintaining detailed records allows you to keep track of everything in the business. Keeping detailed business records tells you the position of the business both in terms of finances and operations. You can also easily pick up the challenges that need to be addressed from these records and thus formulate strategies that work best for the venture.
While documentation is essential, many construction companies and managers put it on the backburner, and unknowingly put their business at risk. Professional, detailed documentation can shield your employees and business in the face of liabilities and risks.
On top of being consistent, make sure that your documentation is accurate, comprehensive, and accessible. Taking seconds to collect and organize your data regularly can save you hours of stress in the future. Documentation impacts a variety of construction components and complications, including on-site accidents, legal issues, and overall project management.
Create a Flow of Communication
Communication is essential in every phase of a construction project. Establish a flow of communication with everyone on the ground — and every stakeholder and supplier in the plan. This transparency will make the process smoother and will reduce the number of emails and phone calls whenever a problem arises.
One of the simplest ways to create a flow of communication is a work execution platform. By syncing comments, photos, documents, and calendars in a single location, you can monitor updates, budgets, and scheduling changes as they occur.
A robust platform also allows you to relay these changes to other managers and accounting offices in real time through instant alerts, automated actions, and easy-to-visualize dashboards, providing a nearly email-free and paperless method of project management. That means more time for you to spend at the construction site meeting contractors to coordinate the next stage of work.
Plan for contingencies
Construction project managers always need to start planning long before actual construction begins, and continue revising and developing plans until the project ends. The design, pre-construction, and procurement stages of a construction project each require extensive planning — and each may need to be revised as the next stage unfolds.
Anything can happen at a construction site. If you encounter unexpected environmental problems during the pre-construction phase, the design may need to change. Even slight adjustments can affect the overall plan and timeline. This remains true during the actual build. While you will be working with experienced professionals in electrical engineering, plumbing, scaffolding, and carpentry, they still need a focused direction to coordinate their efforts with each other.
Track your budget
In construction, the permits, wages, materials, and equipment needed for projects are often exchanged between an array of financial sources and vendors. From the initial bidding process to the project closeout, construction PMs are responsible for tracking and monitoring all costs, especially as they relate to initial budgets.
Even relatively small construction projects contain hundreds of moving parts and individual costs, so to remain effective, you need to use software that can also help you manage costs as you move through the key phases of construction budgeting. In addition, through your software platform, you should have access to templates for construction project management.
A best-in-class work execution platform can enable you and all of your stakeholders to input costs, budget changes, and other calculations to keep track of your project’s finances, alleviating the need to coordinate with every participant or to calculate your budget. Additionally, integrating DocuSign reduces time spent collecting signatures for every invoice, which means you and your contractors can devote more attention to the task at hand.
Embrace Automated Reporting Systems
No construction project manager has the time to reply to hundreds of emails a day — or use the phone to call and address every question about budgets and progress. In addition to concentrating comments and schedules, you can cut down further correspondence by implementing automated reporting systems.
Construction project management requires the weekly distribution of various spreadsheets and status reports, and automated delivery tools will save significant time over the span of the build. This automation will ensure the right reports go to the right people on time, allowing you to focus on other tasks and communication. Other reporting systems, such as safety and health management, can prevent hazards, track incidents, and streamline worksite analysis when issues do arise.
Operate with best business practices
One of the most common problems that contractors run into when they to attempt to improve efficiency and grow their business is agreeing on what’s considered the industry’s best practices. After all, they already have some sort of system in place that they’re familiar with and believe is working just fine.
To put an end to this debate, you can use whatever system you prefer to handle everything from bookkeeping, scheduling and invoicing, to training and task management, as long as that system contains basic knowledge of the task and helps each employee by providing step-by-step instructions for each employee.
When you have an effective system in place, it allows you to not only maintain your current level of success but also helps you to be prepared to scale properly when it’s time to grow.
Choose the best customers
I wouldn’t recommend turning away a customer. But the hard truth is that some customers are better than others. Is it really worth chasing down a couple of hundred bucks from a deadbeat customer who only asked for some minor contracting work? Or, would you rather land a major project from a client who pays you upfront?
Always keep in mind that you want customers who deliver a solid return on investment, instead of those who give you headaches. To save you this aggravation, learn how to spot these customers before agreeing on a project. For instance, you can ask some of your fellow contractors if they’ve had any experience with this customer in the past. Other signs of troublesome customers are if they’re rude or abusive to you or your staff from the get-go or refuse to give you a down payment.