It’s no surprise the construction industry is unforgiving. It’s a tough one to be part of and we see so many businesses start out promising but quickly run out of steam and finances with no choice but to shut up shop.
Whether it’s struggling to balance budgets, falling into over-financing or dealing with price increases across the board, it happens more often than it should.
Here are some key things to keep in mind if you want to keep your business running and avoid becoming another industry statistic.
1. Being Cheapest is a Race to the Bottom
It’s a competitive industry. It might be tempting to undercut the competitors with the lowest bid. However, this strategy often leads to unsustainable profit margins, compromising the quality of work and ultimately damaging your reputation. Focus on offering value and quality, and you’ll become known as the go-to in your area.
2. Stop Taking on Too Many Projects
Spreading yourself too thin by taking on too many projects can lead to missed deadlines, poor-quality work, and burnout. Instead, focus on fewer projects and deliver top-quality results. Prioritise projects that you know you can deliver.
3. Your Supply Chain is Crucial
A reliable supply chain is crucial. It means you have the materials and services needed to complete projects on time and within budget. Work on creating strong relationships with suppliers and have backup options to mitigate risks. Your supply chain can make or break your project timelines and profitability.
4. You Can’t Do It Alone
Trying to handle every aspect of your business alone is impractical. You might have had to do this at the start to get set up but it’s not sustainable if you’re trying to grow. Bring in experts like accountants, quantity surveyors (QSs), and Estimators to take on specialised jobs. It saves you time in the long run and gives you a much better position to grow.
5. Don’t Agree to Be Paid on Account
Agreeing to be paid on account has a serious impact on your cash flow. Make sure your contracts have clear payment terms that everyone agrees with. Getting paid for the work completed per the contract terms helps maintain a steady cash flow. A business without cash isn’t a business at all!
6. Don’t Sign Anything You Don’t Understand
Legal documents can be a headache to figure out. Instead of signing it and hoping for the best, consult with a legal expert or a QS to review contracts and ensure that your interests are protected. It’s worth it to make sure you don’t get caught up in any disputes down the line because you didn’t read the contract properly.
7. Invest in Training and Development
Continuous learning and development are so important as the construction industry continues to change. Invest in training for you and your team to keep up with the latest technologies, techniques, and safety standards. A well-trained team is more efficient, productive, and capable of delivering high-quality work.
8. Pay Attention to Project Management
Effective project management is essential for meeting deadlines and staying within budget. Use project management tools to plan and monitor your projects. Clear communication and regular updates mean everyone knows what’s happening and is on the same page throughout the project.
9. Maintain High Safety Standards
Safety should always be a top priority. Make sure all team members are trained, up to date and compliant with health and safety standards. A safe work environment reduces the risk of accidents, legal liabilities, and project delays.
10. Build Strong Client Relationships
Developing and maintaining strong relationships with clients can lead to repeat business and referrals. Build a reputation for yourself that people want to work with. Communicate openly, deliver on promises, and provide exceptional service to build trust and loyalty with your clients.
11. Monitor Your Finances
Regularly review your financial statements to understand your company’s financial health. Don’t bury your head in the sand over money. Keep track of expenses, revenues, and profit margins. This helps in making informed decisions and identifying potential financial issues before they escalate.
12. Embrace Technology
Technology is there to make life easier and reduce costly mistakes made by manually doing a job. Use software for project management, accounting, and estimating. Embracing technology streamlines operations and gives you a competitive edge.
13. Plan for Contingencies
Unexpected issues can pop up at any stage of a project. Having contingency plans in place can help you manage unforeseen challenges without derailing the entire project. Set aside a portion of your budget for contingencies to avoid being stung by any huge surprises.
14. Focus on Quality Control
Consistently delivering high-quality work is crucial for maintaining a good reputation and securing future projects. Implement quality control measures at every stage of your projects to make sure the results are consistent and meet your client’s needs every time.
Conclusion
Running a business is harder than it looks, especially in the construction industry. It’s competitive, costly and never ending. It can seem like a quick win to make easy money but that’s a trap so many fall into, failing to pay attention to the details of what really needs to happen to grow a successful business.
Talk to us today at Carroll Estimating to find out how we can help you grow your business and make more money with a seamless process from tender bid to final account.