The Secrets To Growing Your Construction Business

Good news! The construction industry future is looking bright – commercial, residential, and industrial construction specialty lines are reporting strong year-over-year growth and forecasting steady increases in total projects and revenue into the foreseeable future. This sounds great on paper and it has many construction professionals charging ahead to grow their operations while the numbers are good and the outlook is positive.

We all want to welcome opportunities for business growth, but without proper planning, allocation, and strategy…growing too quickly could bring your construction business to it’s knees. Construction professionals clamor for bigger projects and more revenue; however, you must ask yourself if your business is ready to handle a jump in liability, risk, labor, overhead, and expense at the same time. If so, how do you lay the foundation for growth in a healthy, stable fashion? Read below as we detail some strategies and tips to help you grow your business, the right way.

Are You Ready to Rumble?

This seems like a pretty silly question, but it has to be asked. Is your business ready to grow?

For most construction businesses, the choice to stay at the current scale does not mean the business will not be successful. If you are landing projects, leaving behind quality, lasting work, and making your clientele happy, then continue doing what you do best at your current scale. That being said, construction businesses that try to spur growth and change when they aren’t prepared are doomed to fail more often than not.

So how do you determine that your business is ready for growth? Ask yourself the following questions:

• Do you get referrals from your valued clientele?
• Are you earning business from repeat customers?
• Do you have the personnel and management practices in place to handle greater workloads?
• What type of feedback do you receive on the jobsite, from suppliers, from vendors, from your clientele?
• Do you have the budget to handle greater workloads?
• Do you have the infrastructure to expand to new markets and territories?
• Does your company have a clear mission statement and vision that will both differentiate you from competition and take you to the next level?
• Does your team hold regular training sessions?
• Do your employees undergo routine safety and quality control education?
• Does your company staff project management personnel that follow up and maintain relationships with new, current, and former clientele?

If you’re seeing a solid balance of new and repeat business, positive feedback from the community at large, and can maintain customer relationships, it might be a good sign that you’re poised to grow your business. Conversely, if you don’t have a clear vision of where to go, safety & quality control procedures in place, financial resources, or the human capital to get the job done…chances are you’re not ready for expansion.

Do What You Do Best

Another point that needs to be mentioned – expand your business in the areas and competencies of what you do best. Build your expansion around your brilliant work and everything else will fall in place. Far too often, we see construction businesses try to expand into other lines of construction work, biting off way more than they can chew.

Stick to what you do best – you already know how your will be received; you already know the ins and outs of each task; you already know you can control quality and safety measures. Without bringing a partner onboard that has multi-faceted experience, expanding your business to include unfamiliar processes is a dark recipe for disaster. If you want to grow your business in it’s core competency, consider the following three methods:

• Find and acquire a construction firm that does what you do, just in a different market or trade area.
• Partner with specialty professionals within your core service strengths that can add a unique level of customization or artisanry to your projects.
• Prospect, attract, and nurture clientele looking for specific installations or custom upgrades – go to where the money is.

Marketing Tactics to Circle Back

There’s a lot of information out there on the best marketing practices and tactics for construction professionals…some of it is good, some of it is bad, and the grand majority is pretty much useless hogwash. Since construction doesn’t really fit the “gotta-have-it-now” mentality, paid advertising and direct-response marketing will typically burn through your budget without generating much lasting traction. However these time-tested, old-school marketing techniques fit the bill in the construction world, and basically cost nothing…

• Meet the neighbors – whether you’re working on homes, office spaces, industrial facilities, retail buildings, or even multi-family domiciles, it is imperative to introduce yourself to the neighbors. Knock on some doors, ask some questions, engage in friendly conversation, share what you’re doing next door, and leave a card behind. It costs nothing but your time to create a personal connection that could manifest estimates and projects in the future.
• Implement a referral/reward program – deliver high quality work and create a program that rewards customers for repeat business and referrals. You could offer discounts, upgrades, rebates, etc…it’s up to you to create the vehicle that builds repetition into your operation. Let your portfolio of work go to bat for your as both a calling card and a marketing tool.
• Learn how to engage previous customers – this piece isn’t the easiest of strategies to master, but if you pull it off, you can develop a nice line of repeat business. The key here is to not appear too sales-y and desperate…that turns people faster than any other marketing tactic. If you just installed brand new hardwood floors, email over a maintenance article with tips to keep those floors looking tip-top. If you focus on flips and remodels, send over some demographic information on the best neighborhoods to invest in your locale. Positioning yourself as a competent construction professional that is also an expert on a wide range of home/office/industrial opportunities, best practices, and tips will cement you in the conversation as the professional people want to work with.

In conclusion, expanding your construction business is quite a daunting task. There are a lot of question marks, moving pieces, and flat-out unknowns out there that could spell disaster for your operation. However if you have the proper finances, personnel, and outreach resources in place, you can strategize a slow, steady expansion that keeps quality and safety at the top of the list. Invest your time in strategic planning, acquisitions and mergers that make sense, and old-school, pavement pounding marketing tactics and your company will have the proper foundation in place to expand properly.

About CSLS:

CSLS is the largest contractor licensing school in California with over 25 locations throughout the state. We have the highest success rate of any school – 99% of our students pass their exam on the first try, and that’s guaranteed or your money back.
Our teaching process prepares you in a step by step manner for everything you need to know to pass the law, business and trade portion of your exam. Our programs are designed for convenience. We have online programs, home study, crash-course and in-school options, making it easy and affordable for you to become a licensed contractor.