When running a business successfully, construction trades outmark the hardness level. We encounter dozens of construction contractors daily and have always been to point them in the right direction to stand out among others. But they don’t know how to manage a successful construction business. So, after being in this industry for so long and understanding what works here and what doesn’t, we have our best suggestions and strategies for you regarding construction company management.

Strategies to Outshine Your Construction Business

1. Generate a Lead Generation System

Without building leads, you won’t be able to secure any project. So, building a string of leads should be your top priority as it serves the function of being a fuel to your construction trade. You might be thinking about how to create the leads, so we have resolved this for you. 

2. Use Lead Generation Services

These entail:

• The Blue Book
• Dodge
• Building Connected

3. The Visiting Method

You should use Google to search for valuable clients in your trade. Then, introduce yourself and get their business cards. Ask them to add you to their bidding lists.

General Contractors should target:

• Architects
• Developers
• Commercial Realtors

Sub-contractors should target:

• General Contractors
• Interior Designers
• Property Managers

4. Outsource Your Estimating

It’s no longer a mystery that the most critical and valuable part of any construction project is estimating. Many contractors lose a substantial amount of their annual revenue because of inaccurate estimates. Large construction companies have their estimating departments. But what should small construction businesses do? 

Here’s the answer to this. Outsource your estimating to a well-known construction company like us and watch your business grow multiplefold. When you own a construction business, you have a hectic schedule of meetings, supervision, site visits, etc. You don’t have ample time for estimates. Outsourcing the estimate for your construction trade covers that for you. 

5. Utilize the Estimating Software for Budgeting and Bidding

Firstly, as a business owner, you shouldn’t underestimate yourself. It distracts you from business management. Gone are the days when estimating was done by hand. In the era of digitalization, the estimating process has also evolved. 

First comes the takeoff part, followed by budgeting and price estimating. For the takeoff part, we recommend you use Bluebeam or PlanSwift. Both have user-friendly interfaces and are easy to comprehend. 

You can prepare the spreadsheet using Excel for the budgeting part. For price estimating, you should use zip-code-based pricing or the latest software like R.S. Means. 

6. Set Up Office Space for Your Team

You don’t need an office if it’s just you or a small construction team. But you need an office if you are thinking about outshining your business. Your office should be in a central space where you and your team can easily access your project sites. It’s also helpful if your clients come to you to discuss the project. 

If you have just started your business, keep your overheads low. Don’t go for a fancy office and accessories. Instead, invest in fast computers and updated estimating software solutions. 

Our suggestions are:

Estimating:

• Planswift
• Bluebeam
• RS Means
• Craftsman National Construction Estimator

PDF Software:

• Bluebeam

Accounting:

• Quickbooks

Construction Management Software:

• Procore
• Corecon

7. Recruit the Right Construction Management Team and Office Staff

As construction professionals, we consider the construction management team the most crucial investment in your construction trade. Invest in your team and office staff, as these are the people who will stay with you during every up and down. Only the right people will help you outgrow your construction trade. 

The critical office team includes:

•  Project Manager
• Accountant/Bookkeeper
• Office Manager
• Estimator
• Purchaser

We have seen the same person working in multiple positions for small construction businesses. This person should be someone other than the business owner, as they have numerous different things to do to manage and supervise the construction project. 

8. Delegate Everything You Can

As a business owner, you must work ON your business and not IN the business. Giving control of your parts of the trade is hard, but you’ll be blown away by the results when you assign a task to someone and trust them entirely with this task.

When you assign a responsibility to someone and let them know that it’s up to them how they will do it, you’ll be pleasantly surprised at how they do this. They will not be coming to you for each hurdle they face. So, you need to trust your team for your construction business. 

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9. Make Long-Term Plans for Your Business

Having a vision for the future of your construction business is essential, and making long-term plans is crucial for the success of your construction trade. Dealing with all the hurdles and problems can be challenging with prior plans. So, this is an essential part of your construction business management. You need to set a future goal so you can meet the realistic expectations you set.

10. Decide on the Speciality of the Niche

Being a specialist in any niche will benefit you more in the long run than other construction businesses that are jack of all trades. For example, if you are a restaurant constructor, focus on searching for restaurant owners who need estimating for their construction projects. You should concentrate on finding the relevant construction builders if you are an industrial builder. You can get premium rates from them and can negotiate with them as you are a specialist in this field.

11. Set up a Powerful Sales Team

An effective sales team can outshine or destroy a construction business. Most of the time, the contractor is the only salesperson for the trade. It restricts the chances of securing more projects. One of the best techniques is to know your clients on a personal level. So, when negotiating with the clients regarding the construction project, you can gain insight into their thinking and preferences. Your sales team will further assist you by giving you a clear picture of what is going on in the office regarding the construction project. With a robust sales team, you can multiply your chances of bidding by manifold.

12. Imply Digital Technology and Automation

As technology evolves, software companies develop new and upgrading construction estimating software. You should bring that into practice. Many construction software applications, including estimating software, accounting software, CRM (Customer Relations Managers), RFIS, change orders, payment requisitions, and construction management software, can be used to manage your contracts. 

13. Recruit The Best Bookkeepers

The most critical aspect of any construction business is the financial perspective. This includes the bookkeepers and the managers. In many construction trades, the owners bill and keep the cash record by themselves, which is a huge mistake. Working with a hectic schedule to supervise and manage everything, they need more time to focus on every aspect. The solution is to keep a dedicated and intelligent bookkeeper who can manage your finances.

14. Cash Flow is King- Imply Construction Financing and Credit Lines

You can’t start and complete a building project without money. Many banks and private lenders offer construction financing to implement it in your construction project. Many banks provide a loan termed a “bridge loan.” It will bridge the gap between the work performed and the feedback from the client. It usually takes 60-90 days to issue the first check. So, always keep your hands on the cash flow by having construction finances and credit lines side by side. 

15. Use Sub-Contractors to Finance The Project

If you are a general contractor on commercial construction projects, you can recruit sub-contractors to finance your building project. Consequently, this will reduce any risk regarding the project’s cash flow. Moreover, sub-contractors have special deals and connections with the vendors regarding the procurement of the material. If you are a sub-contractor, outsource the piece workers, and you can charge your general contractor for the mobilization of material and machinery. 

16. Partner with a Lender to Offer Clients Loans and Secure More Work

For residential contractors, consider working with a bank or a private lender that can offer loans specifically for remodeling and home construction. This can help you secure more work because clients don’t need to have 10s of thousands of dollars saved in cash to do the project. They can just get a loan for it.

17. Hire the Right Field Supervision and Project Manager

You should hire the right and most suitable supervisors and project managers to increase your profit margins by the maximum. In the long run, this will be the best investment for your construction business. These people are experts, have massive experience, have an in-depth understanding of the construction trade, and can manage the crews in the construction field. Every project should have its supervisor, while a project manager must be capable of managing and supervising multiple projects simultaneously without getting overwhelmed. 

18. Have Excellent Customer Service

This is the general rule in any construction business or any other trade. Customer service includes helping the client with everything, showing up instantly, answering their queries and confusions gently, and resolving their problems peacefully. To succeed in any construction business, you need a client satisfaction service of 100. Only some clients are easy to work with, but this is the only key to success in construction.

Check our latest guide on: What Is Quantity Takeoff In Construction

19. Be a Leader and Inspire Your Team

Being a leader means inspiring others and setting an example for them to follow. It includes being understanding and compassionate regarding getting late and sick leaves, having personal difficult circumstances affecting your ability to perform, and a deep understanding of how to discipline and correct the employees’ mistakes.

20. Use a CRM to Manage and Track your Sales

A CRM is a customer relationship manager that assists you in tracking your customers, clients, progress, projects, and, crucially, sales. Unlike most business owners, you can’t use your email as your task-to-do list. You need to be logged into your projects so you can manage them effectively. To be honest, Zoho is the best CRM. However, others include Hubspot and Salesforce. 

21. Invest in Professional Templates that make you Stand Out.

Branding your business is crucial when it comes to professional templates. These include change order templates, invoices and payments, paperwork, time and material tickets, purchase orders, and any other documents submitted under your company’s name. You should hire a professional graphic designer for this purpose. You can also simply do it on Fiverr. 

22. Build An Impressive Website

Despite the fact that the website and design have little to do with your project, having an excellent website will help you bid on more projects and ultimately win them. The less you work on the project, the more time you will have to work on other aspects. You can hire any freelancer from any platform like Fiverr, Upwork, Guru, or Freelancer.

23. Train Your Skilled Labor Well

One key aspect of managing a construction business is training skilled labor to perform faster and more efficiently in the field. You can hire specialist supervisors with the necessary skills and experience to train the men. If you have a specialization yourself, you can invest a few hours per week in training your staff. 

24. Use Piece-Workers and Subcontractors when Possible

Another effective strategy to manage your construction business is hiring peace workers and sub-contractors in your construction project. A peace worker is an employee you recruit for labor or construction tasks. A sub-contractor is the person who usually performs the complete part of the construction trade for which they are hired.  In most construction projects, a peace worker usually does one of the floors, and another company does the other. It reduces your workload to manage all the employees. You just need to manage the companies you hire. Thus, you can focus on how to manage a construction business. 

25. Rent Equipment Instead of Buying

Always rent equipment instead of being busy whenever possible. The only time you purchase equipment is when you use the same set of equipment repeatedly. Annual rental costs are much lower than the monthly installments of equipment purchases. It helps you set aside your money. 

26. Calculate your Overhead Correctly and Add Costs to All Jobs

The exact method for calculating overhanging costs is to take the previous year’s operating expenses, excluding materials and subcontracted labor, and divide them by last year’s total sales.

For example, calculate the costs of all your employees, rent, computers, subscriptions, utilities, and any other expenses not directly linked to the project. This is considered your overhead.

Overhead Percentage = Overhead / Sales

27. Don’t Take Projects with Little to No Profit Except to Invest in the Client

Keep in mind that not every project is profitable. Only take profitable projects. While taking projects, you should consider taking long projects for construction. This increases the chance of getting more work from the client in the future. 

28. Write a Detailed Proposal to Make Sure Everything is Covered

A detailed proposal ensures the client that you have gone through all the significant aspects of the construction project. A detailed project covers any problems resulting from unrealistic expectations of any service you did not list in the proposal. Many clients expect some services that need to be listed in the proposal. When it comes to payment, that expectation can lead to confusion and disputes. Thus, a transparent proposal helps to prevent any kind of unsettling situation. 

29. Join an Industry Association Group from Credibility

You should consider joining an industry cooperation or membership of some kind. There are a few good ones, like the Better Business Bureau and local and national construction associations. This will provide you with credibility when it comes to connections and your expertise with clients.

30. Keep Licenses and Insurance Up to Date

It’s critical to have your licenses and insurance up to date. Your city and state will require you to have a license for your work, and insurance is going. 

31. Plan Projects Ahead

The last but not least thing I recommend is planning your project. With construction emergencies, it becomes very challenging to prepare ahead of time to ensure the proper acquisition of materials and scheduling of the right crews. You should plan your projects at least two weeks beforehand to stay on the safe side.

As a general contractor, you should have a construction schedule for the entire project. This way, you can check your progress periodically and see if you are on schedule.

32. Recruit a Marketing and Lead Generation Company

We have determined that if you are a residential contractor focusing on homeowners, you should invest heavily in online advertising. The alternative to this is using HomeAdvisor, where you can print leads. The only downside of this is that you will be competing with other contractors for the same lead.

If you do your marketing, the leads you get will typically be cheaper than using a service and less competitive because they will be your lead alone. But I’d still urge you to consider using a digital marketing agency that can help you with your website, landing pages, Google ads, and even Facebook ads.

You can use one of the construction lead generation services for commercial construction. They help you connect with the contractors and architects who are currently bidding on jobs.

Conclusion

Managing a construction business takes a lot of work. So, we have highlighted 32 ways to run a construction business successfully. We’ve covered essential sales strategies, management principles, and overall structure to make your company successful and stand unique among others in the construction market.