If you’re looking to grow your construction business, the best time to start is right now. It can feel like a daunting task and you may not know where or how to begin, so we thought we’d give you hand, and list some basic strategies that you can start putting in place. These are some take–outs from our webinar ‘The Biggest Future Growth Opportunity in the Building Industry Right Now’ that we co-hosted with Builders Coach, Kurt Hegetschweiler.
- It all starts with you and your team
Most builders don’t start out as business–people, but if you want to fast-track your business, then you need to first alter your mindset and your habits, and see yourself as a business leader. Embrace the concept of business development, set your standards and your goals, and make the commitment to put in place the changes necessary to set your business up for success.
What do you want your business to look like and what needs to change in order for you to achieve your business goals? You must have a clear vision before you can start on your action plan.
Equally as important are the people that you surround yourself with. Your team must share your standards and values. This includes everyone from your subbies, admins, bookkeeper, to your accountant and solicitor. When you have the right people in place with clearly defined roles and responsibilities, and with you leading the team, changes are easy to implement.
2. Find your niche
When you actively start marketing your business, there’s a good chance that you will be inundated with enquiries which can sometimes be overwhelming. Some enquiries may be exactly the type of opportunity that you want, while many won’t be a good fit and not worth your time or effort.
So before you go full steam ahead with your marketing, find your niche or specialisation. This will help differentiate your business, narrow down the type of enquiries you get, and make you more relevant to your prospective clients. For example, you may specialise in renovations and extensions, heritage builds, eco-friendly houses, etc.
Once you have determined your niche, start marketing! For tips on how to get your marketing up and running, check out our blog titled How to Win More Work in a Competitive Marketplace.
3. Get your ‘financials’ right.
Profit, cashflow, margins, break even points … you must have these under control for every single job. Using estimating and job management software such as Buildxact will enable you to ensure your quotes are accurate with consistent margins across the board, and that you’re able to gauge your profit and cashflow at any given time during a job.
While using a system to track your financials is a ‘must’, there are also other things you should start doing:
- Price your work properly by applying a mark-up of 25% for all items (according to Kurt Hegetschweiler, specialist builder’s coach, this is the minimum mark-up and you should never go below this figure)
- Don’t forget to cost yourself into the jobs you quote
- Have a payment schedule for every job and use the progress payments to cashflow the job rather than your own finances.
- Build cash reserves – ideally 2% of turnover as working capital that you put in a separate bank account
- Have a 12–week cashflow forecast. Knowing this allows you to make decisions for your business, eg. when to add a new staff member, when to put new systems in place, etc.
4. Systemise your business
A lot of builders are still using ‘old school’ methods to run their business and are doing things the hard way. In this day and age, you just can’t compete unless you implement the right systems and technology to improve efficiencies and take control of your business.
You may already be using accounting software such as Xero or MYOB, but you’ll find that you can systemise most areas of your business. Buildxact can help you when it comes to estimating and job management, while Deputy will take care of all your time–sheeting requirements. These systems all integrate with each other so that there’s no double-handling. That’s the type of efficiency that you need to set up so that your staff can work smarter and not harder, while increasing productivity.
5. Take control of your leads
When you’re presented with a potential job that is a good fit for your business, take control immediately and steer the conversation and the process. Communication is the key.
- Start by charging for your quotes as this will eliminate any tyre kickers and will also place a value on your quoting process.
- Have the difficult conversations with your potential clients up front and set expectations so that they know what will happen if, for example, a variation is required during a job, or there are defects at the end.
- Set up a client portal for your potential clients right from the get-go so that they can see first-hand how they will work with you. Buildxact can help you with this.
Being open and honest and showing that you are in control builds trust and credibility and leads to repeat and referred business. It helps you convert your leads into clients, and once you’ve won a job, it protects both you and them, and helps ensure that your jobs are delivered to budget, on time, and most importantly for you, that they are profitable.
6. Get help
As the leader of your company, you are tasked with steering your business in the way you want it to go and spearheading the change necessary to increase its success.
Remember that you are not required to be an expert in all areas so get the right help to assist you in kick starting and managing change. It will be money well spent and while you may not see immediate results, be patient because you will certainly reap the rewards in the not too distant future.
It usually takes about 12 to 18 months to experience the full impact of the changes you implement in your business, so grab the bull by the horns, get the help you need and stick with it. Consistency is the key here.
Here’s to your success!
These are just the six top takeaways from our webinar ‘The Biggest Future Growth Opportunity in the Building Industry Right Now’ that we co-hosted with Builders Coach, Kurt Hegetschweiler.
If you’re interested in finding out more, click here to watch the webinar recording.