Your construction company is struggling.
- You’re lacking cash-flow
- Your list of clients is becoming smaller and smaller
- You feel unorganized; and
- Like you’re drowning in paperwork.
The good news is that you’re probably not the only construction business that feels this way.
The construction industry is constantly facing delays, payment issues, or unpredictable scenarios. These issues can cause setbacks for construction companies that can ultimately become detrimental and stunt growth.
This guide offers tools and tips to successfully grow your construction company, including how to:
- Better manage payments
- Market your company
- Use a project management system
- And more
Gain Access to Working Capital and Solve Cash Flow Problems With Flexbase
In the construction industry, delayed payments are almost considered the norm.
The construction billing procedure is complicated and typically must go through a chain of people.
This usually includes:
- Property owner and lenders
- General contractor
- Material suppliers
Delayed payments can put a chokehold on your cash flow. The Flexbase Card was designed to solve this problem. With 10x the credit limit of traditional cards, the Flexbase Card gives you access to capital that can help float business costs while waiting on payment from clients.
As a bonus, the Flexbase Card offers 0% APR for the first 60 days*. Click below to get pre-approved today.
Common Struggles Faced When Learning How to Grow Your Construction Business
Construction companies often fail for the same reasons time and time again.
If you’re looking into how to expand your construction business or you’d like to see some construction company growth, here are common struggles you should investigate and address.
Construction is a trade job.
It is not uncommon that construction workers only intend to work for a short time.
They might not have much experience with the job or the motivation to work hard knowing they won’t be staying for the long haul.
To help your construction company growth, you can:
- Look to hire from staffing agencies who already have skilled workers vetted that want to work for you.
- Offer competitive salaries to make the job more desirable.
- Provide training for employees to help them learn the trade and your business expectations.
- Promote from within your company to encourage employees to work hard.
Lack of Available Profits to Reinvest
Maintaining positive cash-flow in the construction industry is difficult. Many of the problems related to cash-flow come from:
- Projects that are funded upfront without receiving payments
- Continuing a project when there is a late payment or non-payment
- Poor planning with cash capacity
- Poor management of orders
It is not uncommon for setbacks or unpredicted events to occur during construction projects, which can affect cash-flow.
When there is no money on hand, it can be increasingly difficult to continue a project without running into more money issues.The Flexbase Card can help minimize the cash-flow problem in your construction business.
How Do I Get My Construction Company to the Next Level?
Construction companies often struggle because of:
- Limited cash-flow
- Multi-level projects
- Seasonal work
If you’re growing a construction business, focusing on your cash-flow and how you manage invoices and payments can help bring your company to the next level.
11 Tips on How To Grow Your Construction Company: Advice From Real Construction Company Owners
If your construction business is struggling to grow, know that you aren’t alone.
There are strategies you can implement that can help your construction company reach new potential, like:
- Focusing on cash flow and payments
- Customer support
- A project management platform
- And more
#1: Forecast Your Cash Flow as Best as Possible
With a positive cash flow, construction companies have a better opportunity to quickly pay bills, clients, and other project obligations.
But it can be difficult to project your cash flow in construction because there are often:
- Unforeseen obstacles with a project
- Multiple subcontractors involved in a project
- Varying costs of supplies and materials
By using a construction management software with budget and forecasting tools, you can get a general idea of:
- The cash you have on hand and;
- The different payouts and incoming money you have ahead
This is helpful when planning a project so you can spread out your costs without going into the red.
#2: Invest in Marketing for Your Construction Company
Companies in the construction industry allocate about 13% of their budget to marketing.
Construction is typically a word-of-mouth referral business. Happy customers often share who did work for them while unhappy customers might encourage people to look into other construction businesses for their work.
Investing in your marketing strategy could largely aid in growing a construction business and can help bring new and potential clients to your doorstep.
Experimenting with multiple channels of marketing is a great way to help grow your business. “We’re very strategic on our marketing approaches,” John Hogan, owner of Blue Nail Roofing and Siding shared, speaking about the multiple marketing strategies his business implements, such as:
- Neighborhood canvassing
- Social media ads
- Ad retargeting campaigns
- Utilizing drone video footage
- And more
#3: Invest in Customer Support
Excellent customer support goes a long way.
If customers are unhappy they’re sure to let their friends and family know to steer clear of your business.
On the flip side, if customers are pleased with your work, they’ll likely recommend you when others need construction.
Investing in customer support could help your construction company avoid some negative talk or poor feedback from customers.
Customer support can help with:
- Easily putting clients in contact with a human.
- Helping to address and solve problems with clients.
- Keeping track of the details of projects.
- Showing your company cares for its customers.
Ultimately, having happy customers can go a long way in growing a construction business.
#4: Focus on What Makes Your Business Different From Your Competitors
Why should clients accept bids from your construction company compared to other competitors? Do you have a reputation for keeping a super clean job site? Do you hire the top talent in your area?
Focus on your strengths and qualities that make your business stand out from the crowd and then showcase them.
“We took an approach that we weren’t going to be a traditional contractor,” John Hogan from Blue Nail Roofing and Siding shared, “We were going to introduce technology early, offer different experiences, and do things differently.”
Having something different to bring to the table — whether it’s your affinity for technology, your highly experienced team, or your reputation as a transparent, honest business owner — can make your business more attractive to potential clients and win you more jobs.
#5: Develop Both Short and Long-Term Goals
Are you stuck on how to make your construction company grow?
Setting both short and long-term goals can keep your business on track for growth.
You might want your business to:
- Earn a set amount of revenue
- Have an average project value
- Have a set close rate to work towards
Or maybe your profit margin isn’t where you want it to be.
Consider these goals and brainstorm specifics for your construction business to help give your team an idea of where you want your company to be by a certain time.
This will ensure your entire team knows what they are working for and how it can positively affect your business moving forward.
#6: Complete Your Billing on Time
Payouts in the construction industry can take a long time — sometimes upwards of 80 days.
By completing your billing on time:
- You are better at managing your cash flow.
- You look more desirable to clients and subcontractors.
These can both help with construction company growth in the long run.
Use a Schedule of Values to Bill for Your Projects
It’s clear that billing projects and waiting to receive payouts in the construction industry is not a simple task for a number of reasons:
- The process is long.
- There is often a lot of paperwork involved.
- There can be multiple levels involved in payments for specific parts of a project.
A Schedule of Values (SOV) itemizes each separate part of the job from beginning to end and breaks down the total project price into smaller pieces.
In construction, this is important because it can help ensure that bills are paid promptly and that cash-flow remains positive.
#7: Embrace Remote Work Opportunities
The Covid-19 Pandemic has ushered in a newfound desire for remote positions among employees. One survey showed that 58% of respondents wished to continue working remotely after the pandemic, and 39% of respondents wished to work in a hybrid environment.
Offer remote work and flexible remote work can help you grow your business in several ways, including:
- Retaining top talent - One survey found that 58% of respondents shared that they would “absolutely” look for a new job if remote work was no longer available at their current job.
- Increased productivity - Research has shown that remote-working employee productivity is 35-45% higher than in-office counterparts.
“We built SnapADU to be a flexible remote company,” Whitney Hill, co-founder of SnapADU shared, “We embrace technology and the new ways of working. We are open to having people work from home and work off-shore.”
#8: Invest in Project Management Software
Keeping track of multiple projects in an organized way can be beneficial for your construction business.
When you have a lot going on, it can become too easy to get caught up and confused about the whereabouts of the different projects.
Project management software that helps keep your construction business organized and can:
- Collect all of the project information in one space.
- Show the schedule of values for the project.
- Save information about the client in one space.
- Allow for documents pertaining to the project to be uploaded.
#9: Utilize Complimentary Payment Software
Many construction businesses already use project management software or applications and have success with them.
However, most of that software is just for project management.
By using a platform like Flexbase, you are getting the best of both worlds.
Holistic construction management software options can allow you to pair project management and account software together so you can keep track of every aspect of your project in one place — payments included.
#10: How Do Construction Companies Find Clients? Use Lead Generation Services
Statistics show that generating leads is the biggest challenge for 63% of companies.
Many businesses don’t know where to look or advertise to find their clients, so lead generation services help.
- Provide online databases of potential contacts
- Help improve your marketing.
- Review and fix your online presence.
If you are expanding a construction business, lead generation services can help set your company up for success.
By reevaluating your marketing strategy and allowing insight to potential clients, you’re more likely to gain paying customers.
If those customers are satisfied with your work, your construction business is likely to grow.
#11: Get the Flexbase Card
What’s the best way to help grow your construction business? Keep your cash flow in check.
The Flexbase card offers a variety of perks that can help you manage your cash flow, including:
- 0% APR for 60 days*
- 10x the credit limit than traditional credit cards
- 0 annual fees
- Receipt tracking and expense management features
Click here to get pre-approved today.