Important Factors When Scaling a Construction Company

The best direction for any business is up. While you may be lucky to generate enough revenue and profit to meet all your business expenses and still make a profit, you don’t want to be too much in your comfort zone. That’s how the competition overlaps you and takes your position in the market.

You want to always be a step ahead, especially in the ever-evolving and growing construction industry. So, once everything is steady and running smoothly without you necessarily having to be there, start thinking of ways of scaling up your operations. This will require a lot of research, as making the wrong move can easily cost you your entire business. After years of shedding blood, sweat, and tears to set things up, that’s not what you want. Here are a few things to consider when scaling a construction company.

1. What Services Do You Offer?

Even if you’re trying to maximize profits, keep your service list minimal because selling yourself as an expert specializing in a huge service list will make it seem like you’re biting more than you can chew. Scaling a construction company requires you to restrict your services to those you can deliver exceptionally. You’d rather only offer, something like building restoration and be known as a master at that than also offer construction services for roads, highways, and other projects where you’re just a beginner.

When you want to add new services to your repertoire, only go with whatever your current client base asks for, meaning the demand is already there. You can also add a service that goes together with what you offer, like if you do roofs, add gutters, or if you do pools, add decks, and so on. Additionally, you can look at your existing employee base and tap into some skill sets that may not be utilized, especially of people in your team from other backgrounds.

2. Can You Afford Scaling?

The things you need for scaling a construction company aren’t necessarily expensive; they’re in your control, and most are easy to implement in the grand scheme of business life. For example, don’t be afraid to raise your prices. The close rate will maintain or increase because once you start believing what you are worth, others will, too.

Equally, if you increase the quality of your customers, you, in turn, increase the quality of your business and increase your revenue faster than your costs. An inevitable prerequisite to scaling is getting investors; you can opt for angel investors or venture capitalists, but you must choose. Ultimately, it’s a choice between your business going to the trash dumpster or facing exponential growth. Consult professionals if need be to ensure you make the right decision for your business’s interest.

3. Are Your Workers Happy?

A great approach for scaling a construction company is empowering your people and helping them succeed at what they do and are good at. Understand each employee’s strengths, weakness, and wheelhouse, then align their work scope with their strengths. Invest in workers who fit your culture, brand, and communication style. Remember, when you find quality, pay for quality.

You’ll also have happier employees when everyone knows what they’re supposed to do. The more they understand their role, the more they can excel because there won’t be downtime, overlap, or micromanagement needed. For instance, your metal building contractor will precisely know the scope of their work from the next contractors and only work to deliver specialized results.

4. Do You Hire Subcontractors?

You’ll have to give up working as owner/operator and the one with the tools in hand and operating equipment on site every day. You physically can’t always be in your business and still be able to work on scaling a construction company to get to that next level. Instead, if you’re an excavating contractor, find a quality subcontractor who can handle your work and hand it over to them. If you want to grow, you’ll have to go through the challenge of bringing people onto your team and getting you out of within the business.

5. Do You Receive Quality Reviews?

Getting customers to review their experience with your company is powerful. Before they contract a company, many customers go online and do some background research, which often leads them to reviews that help them form their opinion of the services they want and the company they want them from. If you’re a local masonry contracting service company, your employees must deliver the positive experience you want your customers to talk or write about.

You can ask your customers to leave reviews; those who leave reviews fall into different categories. First, those who leave reviews without asking, and second, those who are willing to do so if you ask. For quality reviews, ensure everyone in your organization understands that they’re all part of what will be graded. Hold them accountable and responsible for ensuring the customer experience is worthy of a good review.

6. Do You Follow Safety Guidelines?

Another great way to scaling a construction company and keep getting those lucrative contracts is by always working with a construction safety officer(CSO). This person handles and coordinates safety on site and is knowledgeable in multiple or different circumstances, including dispute resolutions, accident investigations, logistical issues, and day-to-day operations. A CSO’s role is to identify potential issues then discuss and find the person responsible for the task, equipment, or area.

The CSO must solve or delegate to a responsible person to correct or improve the subject matter. They ensure the workers gear up with PPE, disinfect a first aid room or facility, inspect evacuation emergency stations, site safety and rescue and fire plan, noise by-laws, site logistics, signage, and traffic control management plan. They work closely with asbestos abatement contractor or encapsulation teams and ensure safety for all.

7. Are You Comfortable in Taking a Large Role?

Taking on large roles like HVAC contractors contract for a huge commercial building requires planning and preparations to establish that your business has everything it needs for the task ahead. To guarantee you can satisfy the contract, ensure you have the equipment, manpower, materials, and other necessary resources. Ensure that everyone in your team understands the complexities involved and has the expertise and know-how to deal with them.

You’ll need to be very conscious of the cost implications and be well acquainted with the kind of project financing you need and budgeting. You can pull in investors or secure other financing options if your capacity is not up to par. You must also assess the risks and their impact and develop a risk management plan to successfully mitigate them. Your team also needs to understand and comply with the construction codes and environmental regulations that often come with large construction projects.

8. Do You Rent Your Equipment?

Depending on your scope of work and what type of equipment you need, renting can be beneficial. However, if you’re renting long-term for equipment like a driveway sealcoating trailer, it’s better to purchase such equipment since you use it regularly, but only if it makes financial sense. Renting has advantages like accessing a broader range of equipment at all times and newer equipment which will be easier to operate. There’s also low maintenance and storage cost, and you don’t have to transport the equipment, saving you from buying a bigger truck or trailer to haul around your equipment. Buying is cheaper in the long-term, but only if you use that equipment often, and when you don’t need it anymore, you can sell it and get a return on that investment.

9. Do You Have Connections?

Scaling your business will increase your networks from specialized contractors like asphalt contractors to prime, principal, and management contractors. Having an organizational structure gives you a visual of everyone, making your business more efficient. A structure enables and increases communication and profits. It shows the internal structure of your business and tells people within that structure how decisions are made. Your organizational chart should show all your workers their roles and responsibilities and how they serve the overall business. Having clear job titles helps you know who you’ll need for what. By creating, displaying, and updating your organizational chart, you can best show how interconnections breed success in scaling a construction company.

10. Is Your Business Respected?

Letting your company’s purpose be your true north and guide and inform your decisions will keep your business reputable. By this, your value will reflect the steadfast planning and prioritizing of your client’s experience as central to what you do. When scaling a construction company, a good name is important in sustaining what you’re building.

Having respect for your clients by delivering quality work, keeping promises, owning up to mistakes, managing their resources, and treating and responding to them will earn your business the same type of respect right back. Taking your work seriously, especially in sensitive projects, like the services of electrical contractors, should be handled with the delicateness it deserves, keeping in mind that the huge projects and even the lives of others are in your hands and will earn your business respect.

11. Do You Want To Explore New Markets?

If you’re business is not yet a stand-alone venture, meaning you can’t go on a month’s vacation and have it run without you, then make sure your ”home” is solid. Venturing into a new market, in this case, will be time-consuming and pull resources from your existing business. If your business is independent, instead of going to a new place and building from scratch, use your existing marketplace to find relationships or transition relationships into the new market since it’ll help you increase your brand awareness. You can also plant one of your top cultural employees into that new market. You can make it someone who wants to move and empower them so that the momentum of how you already do things can be transferred and automatically kick off from there.

12. Are You Marketing Online?

Have you put your business out there by building your online presence and marketing on social media? Referrals and word of mouth are great, but you’ll only be growing from one relationship to the next, which is fine, but that’s not how you’ll get to scaling a construction company. The value of online marketing is that you can touch so many people with just one post.

For instance, a single post on Instagram or Facebook about your projects and services can get hundreds if not thousands of impressions. That is, people see your brand, hear your message, and learn more about you and what you do. The general rule for any marketing strategy is to conduct a SWOT analysis, be aware of the competitive landscape, make strategic decisions, and differentiate your business.

13. Is Your Business Technologically Advanced?

In these current times, scaling a construction company requires adopting and embracing technology. Various apps and software can make your construction business optimize project outcomes by minimizing errors, improving efficiency, and enhancing health and safety by preventing workers from entering danger zones. These include project tracking tools, Building Information Modeling, Construction Management Software, and 3D Modeling. Some challenges like labor shortage that have hit the construction business have technological solutions such as independent heavy machinery operated using sensors, drones, GPS, and 3D Models and directed to safely follow its preset path, which has made tasks like excavation quick and less costly.

The difference between scaling and growth is time, and when you can get to the top faster by just having some crucial things in place, then why not? Assess capital or financial availability, put down robust project management systems, invest in and partner with a skilled workforce, utilize technology, calculate your risks, embrace intentional marketing, competitively position your business, and comply with local and state regulations are just some of the ways that can make scalability possible for your business. All these should be directed to providing quality services, meeting the customer’s expectations, long-term sustainability, and your company’s success by earning you profits. Without scaling properly, your company won’t meet its full potential, won’t grow, and will even fail altogether, but you have all the reasons to reverse engineer that and make your business soar.