The Job of construction owners has drastically changed over the years. With the introduction of the new construction technology, along with an influx of competition, construction owners are finding it much more difficult to be successful. This in-depth report will provide a guide for construction owners of all business types and sizes, laying down the groundwork for how to achieve success in today’s construction industry. The first part of this report focuses on how to start a construction company, and methods for developing an effective construction business plan. Secondly, this report assesses new and innovative ways to increase construction sales, how to improve lead generation. Lastly, we will look at the importance of construction safety, and how business owners can enforce rules, regulations and guidelines to make sure you keep your most valued resource safe, your workers.
At the end of this guide, you will learn:
- Tips for starting a construction company, and improve existing ones
- How to get construction sales to start soaring
- Ways to develop innovative and effective construction marketing plans
- Methods for maximizing and improving construction safety and jobsite productivity
Growing Market for new Construction Owners
In 2014, construction — specifically power and communication and civil engineering construction — placed in the top 25 of the fastest growing industries in the US. In addition, residential building construction is also on the upswing, with an increase in housing demand. There is also growing market for real estate agents, general contractors and architects, making construction, and many of its associated fields an ideal industry to start a business.
How to Start a Construction Company: Checklist for Construction Entrepreneurs
The following are suggestions on how to make an effective construction business plan from scratch, but also provide useful suggestions and reminders for industry mainstays. The following strategies apply to all types of construction trades, and can be used as a construction checklist that all business owners must consider.
- Embrace mentorship
Whether you are a brand new business owner, or a seasoned expert, gaining access to reliable and trusted resources is always a good idea. There are a variety of small business assistance programs such as SCORE mentors, or local business development centers that can aid in the planning process.
- Explore ALL of your financial options
Although most new construction owners opt for a traditional bank loan or save enough money to start their own business, there are a variety of other financial options available. These include SBA loan programs, credit unions, community banks or a business line of credit. To better understand your options, you can map out your plan through business.usa.gov, and their Financial Wizard, to identify what government resources you are eligible to take advantage of.
- Protect yourself through licenses and permits
Particular construction trades will require a specific license to operate, and checking with your local state business license office is the best way to go about this. Also, you will need surety bonds to operate legally. To learn more, visit the Surety & Fidelity Association of America to find out bond regulations by state. Lastly, insurance is another necessity, and will require several types. These include general liability, vehicle insurance and property insurance, worker’s compensation, unemployment and state disability insurance as well. For more information on insurance, visit the US Small Business Administration.
- Make the most of FREE online resources
There are a variety of online resources that can help all types of construction companies. Starting out, a construction owner may only have a few staff and resources at their disposal. Visiting some of the following websites will provide additional the additional information and guidance all construction owners can take advantage of. Here are some of the most useful resource:
- Construction office online: This website provides free and downloadable templates for important documents like schedules, estimates, budgets, invoicing and timesheets. This will save plenty of time and effort for all businesses.
- The Construction Owners Association of America (COAA) supports facility owners in the planning, design and construction and construction process through education and information exchange. Their goal is to continuously improve and evolve the construction industry.
- The Construction Marketing Association helps companies to become more effective marketers, and aim to advance your career through specialized resources, training, workshops, networking, certifications and professional development.
Although it is no secret that construction sales, and landing as many jobs as possible is the goal for all construction companies. This is no easy feat, especially with the amount of competing construction companies out there, in all fields and trades. In the past, most businesses were able to grow by developing a reputation within their community. A specific sales and marketing strategy was not necessary in the past, as word of mouth was enough to keep profits coming in. Today however, a dedicated sales and marketing team is necessary to generate revenue and increase construction sales.
Despite the widespread knowledge of increasing competition, many construction companies continue to operate in a traditional manner, and often reject the notion of a sales or business development team. Moreover, construction business owners attempt to juggle all the activities of the company, leaving little to no time for sales. Although a system like this has worked for a very long time, it is becoming more important to have a dedicated salesperson or team to aid in expanding the business.
The best way to get around this traditional way of thinking is to invest in a team of salespeople, and develop a systemized and focused plan that puts your business in the best position to succeed. The following is a series of steps that all construction companies can undertake.
- Hire an excellent sales person
Although you may be a terrific salesperson, as a business owner, you may not have the appropriate time in the day to focus on sales. Go through a detailed interview process to find the best salesperson available. You don’t necessarily need to find a construction expert, but rather a sales expert. Teaching someone about the industry is always easier once you have found your master salesperson.
- Set attainable goals and be proactive
Although it seems obvious that you need to set specific goals, setting a standard for your sales team is essential. This may include setting a specific and attainable number for a day’s or weeks’ worth of work, including:
- Cold calls
- Customer visits
- Email reach outs
- Face-to-face meetings
- Use data to your advantage
In addition to setting these quotas, you must be proactive in tracking the most pertinent data and extrapolating a more detailed marketing plan that will be dictated by the progress of these activities. Consider looking at what types of customers your sales team is attracting, the average job size they are landing, how many leads are generated from these calls, and what project locations seem to be popular. Gathering this data will help to narrow in on what specific audience your company must be targeting.
Increase Lead Generation to Boost Construction Sales
Increasing construction leads is not an easy endeavor. For the most part, many construction companies continue to rely on traditional modes of lead generation, such as word-of-mouth, newspaper advertising, pamphlets or brochures. To stay ahead of the competition however, there are a variety of lead generation methods that contemporary customers are better resonating with. Here are a few suggestions that are less prevalent in the construction industry.
- Increase the Photographs and Visuals
It is no secret that people love pictures, and with advancements in camera technology, along with the prevalence of smartphones, it has never become easier to snap some photos. It is shocking at how many construction companies don’t showcase their work – whether you are a largescale developer or specialize in simple home designs – this could be a lost opportunity. The days of needing professional photos are long-gone, with many people actually seeking out more authentic and personalized photos instead. Of course social media has become a huge player in the marketing world, but there are a whole host of other resources where photos are welcome. Research the most popular review websites, and other sites like Houzz where you can spotlight some of your best work.
If you are seeking more professional-looking photos but are on a budget, drone photography has become an affordable option. Using drones to capture your work from a variety of angles provides more depth and perspective to your work, without having to break the bank. A mix of high quality images and personalized snapshots will only benefit your business, and increase brand visibility. In addition, utilize online resources to post progress pictures of how each job is doing. This gives viewers a sneak peek into what your business is capable of doing, and keeps your company top of mind.
- Keep Meetings Productive
It is easy to lose track of every small detail regarding the business, so weekly meetings are a great way to get caught up. Work with your sales team to find ways to assess, nurture and examine each lead, one by one. You can use these meetings to set priorities on follow ups, and provide greater direction for your sales people. A sign of a good construction owner is one who can lead their team in the right direction, and provide leadership through constant communication.
- Introduce a Referral Program
Why not take advantage of your current customers who can point you in the direction of more business? Construction leads don’t all come from the same place, so provide some incentive — whether discounts or free-patch-ups — for customers who have referred a new job. To take it a step further, offer a referral program to anyone who is able to bring in a new job for your business. A simple gift card or cash reward will go a very long way in maintaining positive client relationships.
- Publish Customer Testimonials
A study by Invesp reports that 90% of customers read online reviews before making a purchase from a business, and 88% of customers trust online reviews as much as personal recommendations. With a more savvy consumer base, and one that seeks advice from those around them, presenting customer testimonials and case studies has become that much more important. Posting these testimonials on your website, social media and other platforms has the ability to boost construction leads significantly. Also, encourage your best customers to review your business on reliable review websites to increase web traffic and increase brand visibility.
Even if you are marketing your construction company on a tight budget, there are a number of sales strategies you can add to your marketing plan. Aside from the traditional modes of advertising, like brochures, post cards and print ads, there are various ways to differentiate your brand from competitors. Below are some of the latest and most effective construction marketing strategies:
- Content Marketing
Content marketing is the process in which a company produces informational content for entertainment and educational purposes. Content marketing can take a variety of forms, including the content for your blog or website, videos and interviews. Essentially, a successful content marketing strategy includes figuring out what customers are looking for online, creating suitable content for this audience, and optimizing ways they can access your content. Although this method has been utilized in other industries, construction companies have been slow to adopt. The beauty with content marketing is that it is easy to implement, and is extremely cost-effective. Its impact however can play a huge role in attracting organic web traffic to your company site or blog, which can turn into leads.
- Social Media
Social media is all the rage for personal use, but there are countless marketing opportunities that exist within these platforms. Social media outlets like Facebook, Twitter and LinkedIn provide an avenue through which companies can connect with consumers directly, while also broadening their reach. If used effectively, social media has the ability to make communication with prospects and customers much more efficient, and helps in creating a more personalized and authentic brand experience. In addition, featuring past work, and announcements regarding future projects, social media provides an inexpensive and effective marketing alternative compared to traditional modes.
- Community Engagement
Construction businesses can benefit tremendously by increasing their community involvement. There are many ways to do this, one simple way would be to sponsor local charity or community events. Aligning with a great cause can only benefit your brand’s perception within the town or city you operate. Going a step further, participating in events like walks, runs or sports tournaments, you increase your ability to connect with members of the community. The most powerful way to engage with the community would be to lend your support when people need it the most. As a construction company, you may have resources and equipment that will prove to be extremely valuable during times like floods, storms or other natural disasters. Having your company at the forefront of the recovery will only stand to benefit your business and the community at large.
Introducing deals through coupons or discounts may not be ideal for all construction companies, but smaller firms can experience an influx of business from this tactic. Furthermore, newer businesses will benefit the most from this method, especially in the initial stages when you are still figuring out pricing and estimating. Utilizing popular discount websites can also help to expand your brand’s reach. Coupons are relatively low-risk, and can be utilized during slower months, like during the winter. There is also plenty of room for experimentation, allowing construction owners to bundle services together, to create a deal that benefits both your business and the customer.
In addition to sales and lead generation, another growing concern for business owners is the issue of safety. Despite the inherent dangers in the industry, improvements in construction site safety still need to be made. Protecting workers, our most valued resource continues to be a major problem, with the number of injuries and deaths still too high.
- The OSHA reports that In 2014, out of 4,386 worker fatalities in the United States, 899 or 20.5% of these was in the construction sector
- The four leading causes of death in construction include:
- Falls at nearly 40%
- Electrocutions at 8.2%
- Struck by object at 8%
- Caught in/between objects at 4.3%
OSHA argues that by eliminating deaths caused by these ‘Fatal 4’ methods, we can save 545 lives each year. With construction site safety a big concern, here are the top 8 suggestions to reverse the trend. Many of these suggestions may seem obvious, but because of the fast-paced nature of construction, it is easy to overlook even the simplest safety precautions.
- Daily safety meetings: Employees need to be briefed about the different safety measures when it comes to each specific jobsite. As a project continues to progress, the hazards also change. It is up to project managers and team leaders to ensure that everyone on the jobsite is provided with proper instruction, and is aware any safety regulations.
- Reduce the amount of night work: Late work hours and dark environments create a greater potential for accidents. If possible, minimize the amount of night work, or limit it to a low-risk area of the jobsite. Some of the reasons why accidents increase at night include fatigue and reduced visibility. This combination creates the threat of more accidents, all of which are avoidable.
- Enforce proper safety gear: Construction sites are notorious for unpredictable accidents and unforeseen safety hazards. To prepare workers, proper protection is needed at all times. Some basic safety precautions include hardhats, eye protection, hearing protection and harnesses. Slip-resistant boots, heavy duty gloves and masks are also standard safety apparel that must be worn on all jobsites.
- Reflective or highly-visible clothing: These are a must in order to reduce vehicle-related accidents. High reflective fabric should be used by all employees, and at all times.
- Regular and frequent breaks: Enforcing regular breaks are crucial in not only productivity, but safety as well. Frequent breaks allow workers to re-energize by drinking fluids, eating snacks and resting.
- Clear signage to warn of danger: Wires and high voltage areas should be marked and the electricity should be deactivated when it is not in use. Areas should be cordoned off by pylons and ropes – to prevent people accidentally moving into areas where there are chances of falling debris or other dangerous hazards. Simple signs with words like ‘Danger’ are incredibly simple, but are essential in ensuring safety.
- Avoid sunlight to minimize fatigue: Exposed skin needs to be covered up. Wide brimmed hard hats, long sleeved shirts and other skin protectors need to be used. Direct sunlight is one of the main causes of fatigue. Taking care of this will ensure that workers ensure maximum amount of productivity in addition to reducing fatigue.
- Practice defensive driving/parking/backing up: For vehicle and machine operators, vehicle warning strobes are needed to warn approaching traffic. Pylons, barrels, buffer zones, safety spotters and daytime running lights are needed. Drivers should be made to slow down and to avoid backing up whenever possible. If backing up is needed, a spotter should be assigned.