Learn how to accelerate your construction business growth and ingrain your reputation with commercial and residential clients.
In this article, we cover how you can combat minimal or slowing growth and build up a stable revenue stream. If you’re in residential construction or commercial construction, then this is for you.
Identify the reason for slowing growth
When business slows down, you need to find the reason for it pretty quickly. Often, it’s just a case of looking at your marketing, your sales process, and what the local industry is doing.
Some questions might be:
- Are you not offering services the local community needs?
- If most projects don’t fit your speciality, can you be adaptable?
- Is there more competition? Have more new construction businesses been opening recently in your area or are more prominent companies/interstate companies moving into the space?
- Are your current customers happy with your service? Just asking your customers how they feel about your service and if they would recommend you is a great way to find out what’s right and what’s not. You might also find out about competitor offerings too.
- Are you in a niche that doesn’t generate enough business year-round? Are your services seasonal? It might not always be evident that other factors are affecting how busy you are.
- Do you have enough tools? Are your costs unsustainable?
Are your staff happy? Are you losing out on commercial or residential build tenders? Why?
- For some businesses, it’s merely a case of not doing enough marketing (your competitors are, so why aren’t you?). Increasing how often your potential customers see you online and offline can make a big difference to your order book.
How to elevate your business to the next level
If you look carefully at any well-functioning business, you’ll see that it has got all of the right things happening. They have a cohesive management team, strong internal and external communications, streamlined operations, skilled staff and rock-solid financial controls. It might seem impossible to get to that point, but with a plan and some structure, you can be experiencing an easier way of doing business in no time.
Here are some questions that can get you thinking about what’s important:
● Refine your internal structure
How is your business managed? Do you have a team in place handling operations, sales, finance? Are there any skill gaps? Are there people in your team that are holding the business back from growth? Can you promote anyone on the team to a more significant role?
● Employment terms
Do you have employees or contractors (or both?). Does this suit your cash flow and the types of projects you work on? Are they always busy, or can you find other ways to keep them working in the slower periods?
● How well funded is your business right now?
A lack of funding can cause any business to grind to a halt.
o Do you have a lack of capital to find or fund new projects?
o How is your cash flow going? Do you have any overdue invoices? Are you chasing up payment?
o Are your costs sustainable? Do you have any overheads you can reduce to help shore up your cash reserves during the slower periods (or to better your business overall)?
Allocating your finances wisely, can make a big difference in how your business functions, as well as being careful about what additional financial commitments you make before you have enough business to sustain it.
Talking with an accountant can help you get some perspective on what’s important.
● Creating a customer service focus
Exceeding your customer’s expectations can make a big difference in your success. In construction for instance, finishing your project a week early, keeping excellent communication throughout and then leaving the site entirely spotless can have you standing out from your competitors.
You’re also likely to get many referrals from doing so too.
How to win the construction tendering process
Many construction projects are put out to competitive tender, so you need to know how you can get an edge and win your share of the business available.
This is by no means an exhaustive list, but here are some key things to start on:
Find bigger contractors and ask how to get on their preferred supplier list
Making relationships with big contractors can help to boost your business and get your name spread around town. Get in touch with larger contractors that could need your services as either a subcontractor or partner and talk with them about becoming a preferred supplier. It might take a few phone calls or even a chat over lunch, but it’s a great way to get a constant flow of business.
Make sure you have the right resource capacity to take a job if you win
It doesn’t matter if the job you’ve just won is from a bigger contractor or if you’ve won it directly – if you don’t have the resources, then you can’t deliver.
o Do we have contractors we can call on to help us?
o Do they have the right skills to handle the project?
o Do we have enough funding to cover our outgoings, or can we get access to more if needed? Do we maybe need a business loan?
If any of these has raised an issue, then it’s essential to get it sorted fast so that you can deliver as promised, but also so that you can successfully apply for more work.
So you’ve just won a significant project. But looking at the numbers, you’ve realised that you’re going to be in financial hardship just to be able to deliver.
How can you budget now to fulfil your contractual obligations comfortably? Do you need to get more funding in advance? What happens if there’s a delay? Can you handle getting paid a few weeks or a few months late? What tools, equipment, vehicles or materials are needed?
Decide what to charge
Price can be the ultimate trap for a contractor.
You might need to put in a ‘low ball’ offer to win, but then you’re legally (and financially) committed to delivering as per the specifications. Is it really worth it?
Even if you pass it off saying “well, we still made a profit” – how much were you making per hour? And if something went wrong (weather, theft, injury, accident, contractor bankruptcy), would it have sunk your business too?
Sometimes it’s better to be not doing any work while you’re finding the right deal, rather than working hard to deliver a project that’s low on profit and high on risk.
Go above what you need
You might be able to easily picture a construction design you’ve got in mind from 2D technical drawings, but can the client ‘see it’ too?
Going beyond what the competition offers can be as simple as doing 3D digital mock-ups or walk-throughs of the property so your client can experience what it’ll be like when built. Sure, it takes extra time, but it can position your offer well above what the competition is offering (including justifying your tendered price).
Deliver on time
Communicating a realistic timeframe can be tough sometimes, as you’ll be wanting to impress the client and win the business, but it shouldn’t then be at the expense of having to rush the work or deliver late.
Forecast for the best-case scenario but make it clear to the client what common delays they’ll have to consider as part of the process (think weather, contractor issues, permitting delays, etc.). You might then find that the client has unrealistic expectations, or that they actually have more time available for completion than they told you upfront.
Keep in touch with the client after submission
Follow up. Follow up. Follow up.
The best salespeople in the world are never pushy. They do well because they follow up better than anyone else. Here’s how:
While you’re getting information from the client before quoting, try to build up a friendly rapport with them. Get to know the key players – from the people who handle the daily interactions right through to the decision-makers.
Checking in with them regularly can help you to understand how things are going and keep you in their thoughts as they finalise a decision. If you win, be sure to show your appreciation. If you don’t succeed, ask for feedback about why your offer wasn’t accepted and what you can improve on for next time. Then keep in touch so that your relationship building isn’t wasted.
Marketing your construction business effectively is where you could see a constant supply of projects coming your way.
There are many different ways of doing this, but here are some of the key platforms to use:
Google My Business
Google My Business is just like having a ‘Yellow Pages’ ad from years gone by (but so much better than how they used to be).
With Google, your free listing can tell prospective customers about your business and give them a good reason to get in touch with you.
Download the FREE app from your smartphone app store (App Store on Apple, Play Store on Google) and get verified. You can then add your:
✔ Website Link
✔ Address, Phone, Email, Messenger and Opening Hours
✔ Business description, photos, videos, blog posts and more
✔ You can also nominate your service area on the in-built Google Maps feature or set your location, so people know where to come and see you.
✔ You can also ask for reviews there too.
You own your website, so make sure you make the most of it. Your website should have a clear structure to it and make it easy for prospective customers to find out things like:
✔ Where you’re located
✔ Services you offer
✔ Location or area of operations
✔ Skillsets and capabilities, including construction certifications
✔ Testimonials, reviews and past projects
Most importantly, ensure your contact information is easy to find (so customers don’t have to hunt around to find out how to call or email you).
Social Media Accounts
Social media isn’t all about food images and showing off your holidays – it’s a powerful (and FREE) way of promoting your business to millions of people.
Facebook and Instagram can be an excellent platform for sharing things about your business and the human/process stories behind the things you do. Concrete came out beautifully from the formwork? Show it off. Worker on a hoist safely doing work at heights that would scare most people? Share it.
You might not sell a construction project from it, but everyone from building managers to developers to major construction contractors look at social media in their lunch break or before/after work. Are you going to be in front of them with exciting content, or are you going to leave that to your competitors?
LinkedIn is the social media for business people. You need at minimum to have a complete profile on there with your contact details and some information about you. It’s also an excellent way to get in touch with practically any businessperson on the planet.
Email marketing can be powerful too, and just like your website, you own the asset. Write a regular blog and share it with your email list. Email them about your closing times over Christmas, your latest news, any big project wins or general info about the market. You can become a person of influence in your industry just by sharing helpful information.
There are lots of different ways to do referral programs, from offering spotter’s fees to people who refer you projects, to joining professional business referral groups like BNI.
Invest in your team
Your business might be in construction, but it’s still a ‘people’ business. As a business owner, it’s important to be watching for things like staff morale, as a happy team is an effective team that’ll have your best interests at heart.
Find good people and pay them well. You’ll have a better-finished product and will save substantial amounts of money in materials and time. Remember also to provide them with any necessary training, certifications, licences and good Occupational Health & Safety (OH&S), so they work safely and within the law.
OnDeck offers flexible business loans that solve a need for extra funding. Whether it’s the cost of materials, covering a cash flow shortfall or getting some new equipment for a project, OnDeck can help you.
With an easy online application process, loans of between $10k and $250k, and terms of 6 to 24 months, we make it simple for businesses to get the extra funding they need.
Apply online in minutes at www.ondeck.com.au or call our helpful finance team on 1800 676 652 today.
Prepared by OnDeck Capital Australia Pty Ltd ABN 28 603 753 215 (“OnDeck”) for general information purposes only. Content may belong or have originated from third parties and OnDeck takes no responsibility for the accuracy, validity, reliability or completeness of any information. Information current as at February 2020. You should not rely upon the material or information as a basis for making any business, financial or any other decisions. Loans issued in Australia are subject to the terms of a loan agreement issued by OnDeck. Loans are subject to lender approval. OnDeck® is a Registered Trademark. All rights reserved.