By Holly Welles
The future of the construction industry is bright. Construction and extraction occupations are expected to grow about 10% from 2018 to 2028, and there’s no shortage of job postings seeking talented building, electric, or maintenance professionals. If you’re looking to build and expand your business, there’s no better time than the present.
Of course, choosing to invest in building a construction company will lead to more responsibility and initial costs, but the payoff is promising. Here’s how to get started.
Build a great construction team
To build a great business, you must build a great team. Hire people with different skill sets that will take your business in the direction you want to see it go. Be selective about whom you hire and invest in those who have the talent and track record to be powerful assets to your company.
The construction labor shortage has made recruitment competitive; finding experienced construction laborers and supervisors has been a challenge since the economic crash of 2008. This means you’ll need to focus on finding employees with a good attitudes and who can learn quickly on-the-job. Your business can benefit greatly from building leaders through robust training and on-the-job mentoring.
For recruiting, try building connections with local community colleges and technical schools. There may be students who are seeking opportunities that value practical skills. As your business grows, you can even sponsor programs that offer apprenticeships or internships for young students looking to enter the industry.
To build a construction business, mind your budget
Even if your construction company is making a profit now, there are expenses associated with growth. You must be willing to mindfully invest in order to increase earnings. Think about the cost compared to the potential profit of a project before taking it on.
The best way to plan is to create a budget based on your estimation of costs. Keep utilities, taxes, liability insurance, and professional bonds in mind when making this budget. From this base, you can calculate your ability to afford new laborers and equipment that can help you grow. Planning will ensure your company makes it through the growth process and comes out on the other side, more efficient and stronger.
Remember that unexpected costs are a given in the construction industry. You don’t want to be caught unprepared, so contingency planning is crucial. Set aside about 20% of your budget to pay for unforeseen costs like material upgrades, accidents, malfunctions, and mid-project changes. This will prevent costly delays in production and protect you from running your business into the ground.
Upgrade technology and equipment
Innovative heavy machinery and advancements in technology are changing the way work gets done in the construction industry. New construction business owners must commit to staying up-to-date on the latest software and equipment.
Technology allows your business stay ahead of the curve and the competition. For example, newer and more efficient tools will reduce project time and allow you to take on more clients, reducing labor costs and increasing profit. Keep an eye out for project management software, fleet management tools, and worker safety technologies that help businesses run more smoothly and with less effort.
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Since technology trends change almost overnight, tracking developments can be difficult for busy new construction leaders. One way to stay on top of industry trends is to begin regularly reading construction publications. Try to research new technologies that can help your employees work more efficiently.
Networking and attending industry conferences and events is also an excellent way to stay current. These trade events usually offer classes or demos that will allow you to speak with others in the industry. In addition, there are online communities, such as LinkedIn, where you can connect with industry professionals and discover new opportunities for growth.
Develop a marketing strategy
Most companies in the construction industry rely on word-of-mouth marketing to grow. While this organic form of advertising has its benefits, you should also consider investing in other types of marketing to get new customers more quickly. Depending on your budget, this can include everything from promotional discounts or referral incentives to television commercials.
Moreover, your marketing campaign should aim to both bring in new customers and retain existing ones. Reach out to former clients by providing referral incentives or offering free estimates or discounts on their next renovation. As always, excellent customer service and quality, reliable work will do wonders in creating a loyal client base.
Focus on winning new clients by creating a strong online presence. Ensure your website is geared toward converting potential customers; include testimonials, quality content, and examples of your work to win their trust and increase sales.
Outline a detailed marketing strategy that can be implemented over the next six to 12 months. Include digital platforms you plan to use to spread your message, and always evaluate your finances before making a final decision.
How to build a construction business: final thoughts
Construction professionals know better than anyone that a strong product requires an even stronger foundation. Before you build a construction business, make sure you and your team are ready to grow.
Then, consider your best venue for expanding your company. Be sure you are able to get skilled workers and updated equipment. Develop marketing strategies for gaining new customers while also maintaining your loyal base.
Most important, make sure you have the necessary funds to move forward. Growth can kill your business if you incur too many costs right out of the gate. Smart planning and careful budgeting can help you navigate the beginning of your construction career and launch a business that will have long-term success.
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