To build a successful construction company in today's economy, you need more than competitive bidding techniques and skilled labor force. Effective high-growth construction businesses are those which strike a balance between strategic planning, sound project management, and visioning for the future through adaptability and innovation. They put equal stress on finance management, use of technology, team development, and creating a company culture that can survive growth.
But what distinguishes the good from the great? In this article, we'll discuss the basics of creating a sound construction company, what the construction industry can learn from the tech sector, and why saying "no" to non-core growth opportunities in the short term matters to long-term growth.
The Key Pillars of Growth of the Construction Sector
All successful high-growth construction companies are founded on three pillars: financial control, accurate estimation, and productive labor management.
Financial Control
Without proper financial controls, expansion in a building company can cause enormous cash flow issues, behind-schedule projects, and declining profitability. Utilize budgeting software and keep an eye on project profitability on a regular basis. Construction accounting software can assist in making it simpler to track costs and get visibility into where each dollar is going.
Tip: Consider using cloud-based software like Archdesk that integrates budgeting, invoicing, and cost management for projects for seamless financial management.
Accurate Predictions
Lowballing bids to stay competitive can get you the job but destroy your margins. Growth businesses understand the need for good estimating, with contingencies for variables like material cost changes or unexpected delays. Instead of bidding low, charge what your skills are worth.
Pro Tip: Use preconstruction and estimating software to standardize the bidding process so you build financially sound estimates of profitability.
Labour Management
Efficiently managing construction crews means not only the right number of workers but the right crews with the right skill sets for each phase of the project. Construction is susceptible to skilled labor shortages, so the deployment of workforce is even more important than ever. Construction workforce management software can streamline scheduling and communication, so crews are coordinated and projects stay on track.
Culture Matters More Than You Think
To the majority of construction companies, culture is secondary to deliverables. profits, and deadlines. However, high-growth businesses understand that a healthy, positive company culture is the key to their long-term success.
A healthy culture will attract and retain talent, foster collaboration, and promote innovation. Managers who set an example and invest in the growth of their employees will discover they have engaged employees who are committed to the success of the firm.
Create environments where employees feel valued. Spend more on training, personal development activities, and safety procedures clearly explained. It isn't just about hard hats and deadlines to run a construction business; it is about developing a culture where employees want to be successful.
What Can the Technology Industry Teach the Construction Industry?
Successful technology firms are product-agnostic and flexible, not product-centric. Some of these technology-style strategies can be used by construction firms.
- Highlight Soft Skills: Technology thrives on collaboration, communication, and innovation—not necessarily technical expertise. Construction laborers can gain an edge by highlighting soft skills like creative problem-solving and adaptability in their crews.
- Tap Into Technology: Similar to how SaaS companies revolutionized the tech industry, technologies like construction management software and data analytics can fuel efficiency and innovation.
- Improve Customer Experience: As much as tech firms are obsessed with user experience, construction firms must also obsess over second-order revenue, i.e., making customers happy to guarantee repeat business and referrals. Growth construction firms that succeed are more interested in looking over the project horizon and considering long-term partnerships.
The Power of Saying "No" to the Wrong Projects
Probably the most common mistake in the building industry is winning every tender or bid. Tendering for each project—regardless of whether it is out of your specialty or within your budgetary parameters—can lead to inefficiency, employee fatigue, and substandard delivery.
Saying no to projects is generally the smartest decision for the long-term success of your business. Projects with low margins or excessively complicated logistics can look great on paper but tax resources and erode profitability.
Growth companies specialize in projects that are right for their margins, skill sets, and imagination. Strategic selectivity makes you financially stable and enables you to focus on quality, not quantity. Decide what kind of clients or projects are in your best interest and focus on those and those only.
The Technology Role in High-Growth Construction Firms
Construction software and platforms are no longer a nicety in today’s competitive marketplace. They’re a necessary requirement that enables you to stay efficient, connected, and scalable. Technology enables teams to communicate better, be more productive, and optimize operational performance.
Companies like Archdesk have revolutionized the way companies approach project management. From real-time collaboration on the work site to analytical results detailing areas of potential risk, such platforms give companies a significant edge over their competitors who remain analog-based.
Technology Applications Include:
- Project Management Software: Schedules, documents, and communicates among stakeholders.
- BIM (Building Information Modeling): Enables real-time 3D visualization of buildings, reducing mistakes and improving designs.
- Site Monitoring Tools: It monitors real-time and notifies the management of delays or issues early in the process.
Building for the Future
Growth companies are companies that have forward-thinking leaders to tackle existing challenges. Financial restraint, empowering the people, culture of the company, and embracing technology will ensure stability and long-term success. Just remember, not all opportunities are worth grabbing. Saying no is as essential as having the desire to grow.
Keen to learn how to drive your construction company into the high-growth category? We're eager to help ambitious construction companies. Discover more about how Archdesk can help you grow more strategically.
