Scaling to 8 figures: 4 strategies to grow your construction company
You want to scale your construction company, but you've hit a bit of a roadblock. Learn 4 simple strategies used by successful construction business owners to grow to 8 figures.
So you want to grow your construction company, but you’ve hit a bit of a roadblock: You’ve got more jobs than manpower; you’re fighting endless fires and you seem to be juggling more balls than ever.
How can you, the construction leader, successfully take your business from a 6- or 7-figure company to 8-figures without going grey in the process?
First, you need to identify what’s keeping you from growing your business in the first place. Pinpointing your growth roadblock will help you uncover strategies for growing your construction company. Simple.
Of course, it’s not easy, but there are a few concrete steps you can work toward to grow your company, so stay with us here.
Why you’ve hit the growth roadblock
Nine times out of 10, when we talk to owners who have hit a plateau, the plethora of challenges almost always fall into the same few areas.
While the reasons for the rut and the nuances of the company vary from construction business to construction business, these commonalities include:
You have a loose (or outdated) business plan
Thirteen percent of startups fail simply by losing focus. Losing focus can kill your business: Too many distractions result in an overwhelmed leader and an unmotivated team. Focus on what’s truly important – pick three or four things, no more – and then look at the steps you need to take to achieve that focus.
You have lowered operational capacity
The Home Builders Institute’s construction labor market report states the number of unfilled jobs in the construction industry in recent months totaled 300,000 to 400,000 positions.
You can’t grow your business without the right people. With not enough manpower, you won’t have the capacity to take on more work, and if you do, your current staff will become overwhelmed and eventually leave. Be sure to set aside a hiring budget.
You have poorly defined roles and responsibilities
Undefined work responsibilities have been cited as one of the top five work stress factors, resulting in employee burnout, and it makes sense. If people are unclear on who does what in the company, there’s a lack of clarity, miscommunication and frustration. That means that you, the leader, are left wearing too many hats and fighting constant fires.
Ineffective marketing and sales channels
A lackluster marketing strategy can be a significant contributing factor. Companies with poor sales and marketing alignment experience a revenue decline.
When sales and marketing work in a silo, company goals and objectives get lost or misinterpreted. This leads to contradictory messages or messages that don’t resonate with your ideal customer or, worse, completely fail to reach your target audience in the first place. The result is a poor sales follow-up, lost sales and a brand lacking direction.
So, what proactive measures can you take to tackle these challenges when they come along?
4 key strategies to grow your construction company
We’ve landed on four key strategies that help people grow their construction businesses: strategic planning, organizational structuring, investing in hiring and onboarding and effective sales and marketing.
You’ve made it this far, but we know you’re busy with business and life. Scan the bullets below and hone in on the biggest problem holding you back from growth. Then dig in. Part of growth is quieting all the noise and distractions – let’s start now.
1) Start with a strategic plan
A strategic plan, which is typically focused on a business’s mid-to-long-term goals, helps a team like yours expand with actual intention. A great strategic plan also allows you to think about your company’s future and a planned path to get you there.
Begin by asking yourself the following:
- What are my company values?
- What is my expected growth in net profit margins?
- What key hires will I need to get me there?
Now drill down into the specifics.
The key elements of a strategic plan will include:
- Company values: The ideals that influence your decision-making in good and bad times.
- Big goals: Visualize where you want the business to be in five years – include key measures of success.
- Your purpose: Why you do what you do – look back at why you started the company.
- Annual goals: Follow the S.M.A.R.T. goal methodology (Specific, Measurable, Attainable, Relevant, Time-bound).
- Your initiatives: Projects and upgrades need to be in place to sustain growth.
- Annual critical numbers: These metrics are the pulse of the year.
To help organize your thoughts and reverse engineer your vision into a series of actionable steps, download the free Breakthrough Academy Contractor Quick Tool – Strategic Planning.
2) Nail down your organizational structure
A clearly defined organizational structure addresses “Who does what, when and why.” Ultimately, all this helps to create accountability. When each position is tied to clear responsibilities, you better understand how much return on investment is generated per person.
How to build an organizational structure:
- Define the employee’s role and responsibilities in the company.
- State how that person contributes to your business’s quality, volume or profit.
- Outline the ways information flows between levels within your construction company.
The benefits of having a clearly defined organizational structure include:
- Faster decision-making
- Improved operating efficiency
- Greater employee performance
- Better communication
- Increase in employee job satisfaction
3) Invest in hiring and onboarding
People are essential to the growth of your company, right? Generally, you have more work than you can produce, yet you’re still investing far more resources into marketing and sales than recruiting – are we onto something here? Old habits die hard.
Here’s what to think about when it’s time to hire:
- Your company’s vision and how many people you will need to get you there
- What roles will be coming up, and what skills will someone need
- How you’ll build a brand to attract high performers
- How to hire for a role you don’t understand
- Your onboarding plan
A well-thought-out recruiting and onboarding strategy will result in reduced turnover, less stress, higher engagement and job satisfaction, long-term loyalty and business growth.
There’s a lot more to unpack as you professionalize your recruiting practices; look for part two of this blog series, where we dive deeper into this topic and share some tools.
For the podcast enthusiasts reading, check out this episode of The Building Code on how to retain top construction employees while driving between job sites.
4) Build effective sales and marketing channels
The difference between your sales and marketing channels is this: Sales is a natural process while marketing is more holistic and raises awareness of your company. Both impact lead generation and revenue, and both have an end goal: to secure business and help the company grow.
Alignment between the two is necessary for growth.
How to achieve effective sales and marketing channels:
- Identify your ideal customer persona (the most common characteristics and locations of clients)
- Build your brand through imagery and key messaging
- Set goals and track your key performance indicators
- Ensure open communication between departments
Implementing these strategies will optimize your in-field and online brand presence, attract suitable customers leading to more closed deals, increase word-of-mouth recommendations and even attract potential hires.
Rising demand in the market makes intentional lead management all the more critical to builders. Construction companies – especially those who take on a larger volumes of jobs like remodelers and specialty contractors – need every advantage they can get. For the most tech-savvy in the industry, construction software like Buildertrend is that advantage.
Buildertrend’s set of pre-sales tools and CRM feature help automate and simplify construction lead management. You’ll now finally have a way you and your team can capture, organize and track prospective customers in one place. No more guessing which project is closest to closing either. From your construction software solution, you’ll see where all deals stand at a glance then can focus on projects that’ll drive higher revenue.
For more marketing and sales tips, check out Buildertrend’s lead generation guide. It goes way beyond how tech can help grow your business. Inside you’ll learn the top ways construction companies attract potential clients and a three-step sales system you can put into action today.
Now you’re ready to grow your construction company
Your strategic plan, organizational structure, recruitment strategy and sales and marketing funnel are the fundamentals of your business. Implementing these steps will clear out the clutter, and with fewer distractions to take you off course, you will be well-positioned for growth.
You’re now ready to take the next step. In our next blog, we’ll take you through the steps on how to hire the perfect project manager, giving you more time to focus on building your construction company.
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