Construction companies can help drive profitability and efficiency by taking care of a few crucial things, such as reducing operational costs as well as increasing efficiency and productivity. Successful construction companies that have boosted their operational profitability have done so by streamlining their businesses, making use of the latest technology, maximizing on staff productivity and ensuring customer satisfaction. A construction company can increase its financial stability and profitability by addressing productivity from an organizational perspective. These can be streamlined and standardized to provide maximum returns.
For a construction business to thrive in this competitive industry, it is vital that their systems are running well and managed effectively. This can be achieved by employing the use of computer-based systems to integrate the business operations of a company into a single company-wide system. Examples of these systems include ERP (Enterprise Resource Planning) and Customer Relationship Management (CRM).
Enterprise Resource Planning
Through ERP systems, companies are able collect, manage and interpret data to keep better track of the accounting and financial operations of a company. ERP is a smart technology system that will take care of your organizational processes such as business functions, eliminating duplication and providing accurate and real-time information when required. This will lead to greater efficiency, and staff will be able to act upon the right information. Enterprise Resource Planning allows construction businesses to manage both external and internal resources and take care of both tangible assets and materials.
Customer Relationship Management
On the other hand, Customer Relationship Management (CRM) is a system that utilizes business strategy and information technology to provide real-time customer intelligence in all fields. Construction companies and businesses can use CRM to optimize their marketing strategy and streamline their services. This will help in satisfying the client, and creating a lasting relationship. Making and maintaining connections is extremely important if you want to gain an edge over the competition.
In order to increase profits and returns, construction businesses should structure their organizational planning to make use of efficient systems such as CRM and ERP. Once these have been established, the following strategies can be undertaken to boost operational profitability.
Target Sales and Services towards High Value Customers
To maximize your profits, it is important that your business strategy focuses on high value customers. This will help reduce your operational costs, which is weighed by the value in return. High value customers will bring in more profit as compared to your input cost. A market analysis will help you in targeting high value customers. In contrast, operational costs must be minimized towards low value customers. Altering your business strategy to prioritize services towards high value customers can help boost profitability.
Train Marketing Team to Attract High Value Customers
The marketing and sales teams are charged with the role of ensuring the business attains high value customers who can help outweigh the operational costs. To achieve this, the team should be trained on how to attract high value customers through innovative sales and marketing methods. Also, the marketing team should take advantage of smart technology systems to get real-time information and data on high value customers, which would then give them a direction of approach. Click the link for more sales and marketing strategies.
Jobsite efficiency can be achieved through planning and coordination between the project manager, the foreman and all teams on a jobsite. They should meet daily to give a status updates on the ongoing projects which will also help in solidifying subcontractor scheduling and will ensure timely delivery of materials.
Track and Monitor Job Costs and Equipment
Costs for each worker and piece of equipment should be properly analyzed, tracked and recorded. This will help in determining the job costs, payroll, equipment depreciation and other important data. All other costs such as burden costs, overhead costs and equipment costs should be updated regularly to ensure the company can make future bids more accurately and precisely. Proper equipment scheduling is also essential to avoid incurring costs from rentals and purchases. Use our Top 10 Construction Software Solutions to find out which one best fits your company.
Construction companies and business owners can leverage their operational costs to ensure they attain maximum profits. This can be achieved through efficient systems, targeted marketing strategies and standardized operations. Follow these guidelines to boost operational profitability in your construction company.