The result is that many contractors live in perpetual crisis management and survival modes and remain frustrated that they are not earning an acceptable return for their efforts.
As a business owner or executive, how do you manage your business so it can thrive and profit in a demanding environment?
Putting your entrepreneurial hat on, consider taking a breather from your daily routine periodically to think strategically about your business. To help you get started, below are ten essential building blocks to success:
Block #1: Assess your opportunities and risks. Take a hard look at yourself and confirm that you’ve got the personality, experience, capabilities, commitment and resources needed to run a construction company. Then, review your company’s strengths, weaknesses, opportunities and threats. What obstacles do you face and how can you overcome them? To complete your analysis, obtain an update on the latest economic and industry news and trends and ask yourself, “Where is the industry heading? How can I anticipate the market and ensure that my business is moving in the right direction?”
Block #2: Think strategically. Stop to ask yourself this question: “Where do I want to go with my life, my business?” Based on your answer, create realistic goals and objectives and use them as your roadmap. Develop a fluid business plan that can be shared with your team, advisors and supporters. Be sure to compare actual performance with expectations and adjust your priorities and plans as needed.
Block #3: Create and implement a realistic marketing plan. Based on your assessment of opportunities and risks and your strategic goals, carefully position your company in the market by clearly communicating what services you provide and what advantages you offer. Use your “positioning statement” as the foundation for a consistent marketing campaign.
Block #4: Build an organization that delivers. Set up a basic organizational framework that can evolve as the business grows. Don’t put the cart before the horse; make sure to calibrate company growth with your capabilities and resources. Surround yourself with support and leverage your strengths through business alliances.
Block #5: Develop a strong team. Make it your top priority to hire and retain the best people available. Provide training, fair compensation and a sense of accountability and belonging. Provide leadership by communicating a positive vision and direction for the company and inspiring a team effort towards common goals.
Block #6: Optimize company efficiency. Manage “information overload” by creating standard practices and procedures, and developing a system for reporting and communication. Use technology to integrate office and field operations so your team can work smarter individually and collectively.
Block #7: Deliver what you promised. Make sure you have strong in-house capabilities in estimating, project management and cost controls. Provide your team with clear guidelines for managing projects and delivering top quality customer service. Request customer feedback, review performance and take corrective measures.
Block #8: Minimize exposure to liability. Know what your rights and obligations are under your contracts and use them as the key management tool. Actively manage your contracts to avoid disputes. Work in the spirit of cooperation and collaboration with project participants. Above all, make safety a top priority.
Block #9: Maximize profits and build equity. Focus on budgeting and controlling company costs and actively manage your cash flow and financial situation. Build your equity base by keeping your profits in the business. Establish good relationships with your bankers by being up front about your company’s situation.
Block #10: Gain and maintain your competitive edge. Take time out to keep on top of economic, political and market trends that can affect your business. Adjust priorities and plans within your overall business framework. Hold on to your “entrepreneurial hat” at all times.
The trick is to keep each of these building blocks in mind as you work towards business growth, profitability and sustainability.
Tricia Atallah is founder of two successful construction industry firms and a recognized expert on the construction industry. She is author of various blogs and articles in leading online and print publications in the U.S. and Canada. Her book, Building a Successful Construction Company, has been sold internationally and is used as a text by university construction management programs.