Although many construction company owners strive to make greater profits, they are often afraid of taking risks, trying something new or exploring new streams of revenue. Instead, many businesses find themselves doing the same type of work that has kept them going for years in the past. In order to grow and be successful however, altering your business strategies is essential and will help stop your company from stagnation. This article discusses strategies you can put in place today that can lead to greater profits, and long term growth.
For a construction company to continue to grow, it has to be ready to embrace change. For example, don’t only rely on the same customers or projects that you have relied on for years. Although you don’t have to abandon your bread and butter, look for new types of projects, and focus on ones that have fewer competitors. Assess your business and see what your workers are capable of, and you might be surprised at what other types of jobs or projects you are able to handle.
Alter your Pricing & Bidding Strategy
A common strategy among construction companies, whether big or small, is sticking to the same pricing model for years. As the economy continues to change, customers are seeking different ways to pay. Providing customers with a wide range of payment methods might be the extra jolt your business needs. Furthermore, avoid bidding for projects with a lot of competition. Instead, hone in on which projects you will best execute and work hard to get them. Every construction company has a specialty, find yours and focus on winning those types of projects.
Cut down on 3rd Party Businesses
Working with subcontractors and suppliers are necessary for all construction companies. However, the tendency may be to partner with the cheapest or most convenient subs and suppliers. Although it may seem like a good idea, you might be putting your quality of work at risk by using these companies. Instead, form relationships with subcontractors or suppliers who you know will deliver timely, quality and well-priced work. You can even extend this strategy to customers, and explain to them that you will only work with specific subs and suppliers, which may explain why your costs have gone up, or if project timelines are longer than usual. Customers will appreciate this, and can help form longer lasting relationships with your business.
No More Freebies
Throughout the course of a project, customers often want additions or changes made, and many construction companies will do it, free of charge. Although this may seem like a strong customer service move, it does more damage for your business than you might think. Firstly, freebies are difficult to quantify, without actually calculating the labor, equipment, parts and supplies needed. By providing freebies, you might be losing a lot more than you might think. One way to curtail this is by being transparent with customers and discussing how much extra work will cost from the outset.
Encourage Repeat Business
This strategy may seem like an obvious one, but so many construction companies fail to land repeat business with customers. Making strong relationships with your best customers will only encourage repeat business and help you stand out. Instead of trying to put in bids for every project you encounter, nurturing existing relationships and building upon this may be your best bet for getting repeat business.