how to grow a small construction business

The Secret to Growing Your Small Business

Drive-thru:

  • Balancing growth with company infrastructure is especially challenging for construction companies.
  • Put your core customer values on the lips of everyone in your company.
  • Balance business infrastructure and human resources with realistic growth projections, and then analyze and revisit them regularly.

Growing a small construction business is different from growing most other types of businesses. That’s because each construction project is unique and is most likely a big ticket item that requires many participants. Compare that to selling a manufactured widget, and you can quickly see that construction business growth has many places to get out of balance.

Without balance, your construction business will force you to navigate troubling ups and downs in revenue. This month you’re flush with contracts, but two months from now you’re staring at zero. And that throws everything out of balance—like staffing, partnerships, your equipment investments. Even the funding for your offices. If you take the long view, a construction business that doesn’t balance its project portfolio with its infrastructure is in for tough times and troubled growth.

Balance Defines Points of Emphasis

With too much emphasis on growth, companies face project overload leading to bonding, insurance, quality and completion troubles. They also are more likely to take on projects that don’t fit their core strengths. On the other hand, putting too much emphasis on infrastructure in preparation for the growth when it happens results in waste and inefficiencies that weigh down operating budgets.

Getting business growth and infrastructure to harmonize is a journey. If you do it well, you will achieve a balance that supports your growth projections and your finances. However, you will always need to review and adjust regularly as things change.

Here are four steps to getting in balance:

Understand the Customer

Start with customers and refresh your understanding of why they hire you. Over time, it’s easy to forget what customers like about the way you sell your services. You may lose track of the things that inspire customers to tell others about the good experience they had with you. Condense your core customer values into talking points and make them part of every employee’s training. When growth happens and brings its inevitable chaos with it, your employees won’t lose sight of what makes your company great for its customers.

Acquire as You Grow

Examine your infrastructure, from tools and equipment to office supplies and beyond. Make sure that it all still supports the kind of building you do. Check which equipment is outdated, unused, or worn out, and plan to pick up replacements and new technology as you meet your growth projections. By tying acquisitions to growth, you not only ensure you’re ready to handle new work, but also that you aren’t burdening today’s budgets with unnecessary expenses.

Connect Human Skills and Experience

During this phase, you’ll also reap rewards by balancing your human resources. For example, if you are targeting some projects in your growth projections that use building information modeling (BIM), you better make sure you hire new people with those skills or train some of your existing people. Growth always entails lining up the right talent for the upcoming projects. That includes not just construction talent, but also legal, admin, and managerial. And human resources extend to partners who build with you. The subs and suppliers you work with must meet the expected demands of your business’s growth.

Get Real

Next, review your growth plans, and be hard on your estimates. Are you really going to pick up those new accounts you’ve been working on? Are there too many headwinds shaping up for that large contract that’s been in the works? What do others in your organization think? Growing to the next level means relying on the stories told by information and data sequestered throughout your organization. Your people need to know that each of them holds part of the answer to the company’s growth.

When you can connect all the data, you get a more reliable picture of future prospects. By tapping the knowledge of others in your company, you harden your growth estimates, plant expectations, and allow reality to prevail.

Now, go back and balance your updated growth projections to your infrastructure and human resources accounts. The first time you do this exercise you’ll be surprised at how far off the mark your balance has been. But, as you revisit it regularly (preferably each quarter), your business will become more agile, less burdened by inefficiencies, and overall better prepared to hit your realistic growth projections.

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