No one said scaling a home construction business is easy. And that’s before considering how the demand for homes, sensitive to climbing construction and mortgage lending costs, has grown increasingly unpredictable.
Builders remain confident knowing that consumers maintain long-term demand for new homes. With that in mind, you can effectively scale your home construction business even in a challenging economy.
Common challenges construction companies face when scaling
Growing a construction business involves expanding operations, finding new business, increasing revenue, and managing a larger workforce.
These all need to be carefully managed, or the business growth you do experience will become too expensive and unsustainable.
Keeping a larger labor workforce
Finding skilled contractors can be incredibly difficult at the moment. In addition, the “great resignation” means more employees now choose mobility over stability. That’s why home construction businesses need to contend with continually replacing experience and skills.
Smart custom home builders do this by keeping up with a large network of potential employees using modern construction management software that lets builders quickly post open positions.
Solving schedule challenges
Managing multiple construction projects simultaneously can be complex and requires a well-coordinated team and resources.
Scaling up with more jobs and more team members obviously places additional pressure on a builder’s project management. Management gaps lead to material delivery errors, contractors showing up at the wrong time, and overall quality issues.
Competitive custom home builders use digital tools to ensure material orders follow a regular, repeatable procedure no matter the scope of the project. These same tools synch tasks specified in the project’s customer bid to contractor schedules.
As customers make new requests, builders also use construction management software to generate change orders that show the impact change orders have on cost and timing.
Data and Communication Disconnects
As an organisation grows larger, it becomes impossible for any one person to directly oversee and manage everything within it. Having quick access to data to see how the organisation performs remains critical even as scheduling becomes easier.
The construction business will struggle without clear lines of communication across all business units, dealers, partners and construction sites. You need an entire platform of digital tools that manage a consistent set of costs from first estimate to customer bid, to contractor and dealer RFQs, and finally to project budgets and customer invoices.
Why you’ve hit a growth roadblock
If you’re looking to grow and instead feel like your business has plateaued, investigate these potential underlying reasons:
Lack of consistency
Have you developed a formal set of internal standards and processes for estimating? In other words, can you repeat your approach to projects with regularity? Inconsistency in this area causes inefficiencies and errors that inhibit growth.
For example, your most most common tasks, say door installations, should have estimate templates. The templates ensure you always order the complete set of materials for each door. Northing wastes time like forgotten material orders that leave contractors short of basic items like lumber, nails and screws.
Your workforce isn’t efficient
If the roles and responsibilities of each employee aren’t clearly defined, your business will suffer from wasted labour and even conflict. This can make growth incredibly difficult.
Today’s modern construction management software takes planning and team communication online where all team members can see pending and completed tasks. As mobile phones become more powerful, builders increasingly use these as modern tools for keeping project site diaries that keep both builder teams and the customer updated.
The foundations of scaling in the construction industry
When your construction business embarks on a growth strategy, the foundation of that strategy should focus on the following:
Utilize the right construction technology – connect workflows and automate processes
You must streamline processes as you scale to reduce the impact of every manual process. The time it takes to accomplish tasks grows exponentially as the construction business takes on more projects and more growth.
With construction management software, business systems as varied as lead management, estimations and quotations through to cost tracking and invoicing can be done online without paper records, allowing you to focus on strategy, finding new clients, new markets and new services.
Build effective sales and marketing channels – Deliver qualified leads with innovative software
A strong and sustainable pipeline of work scales your a business provided you have the plans and team to handle the work. Yes, you want to focus on generating quality leads and allowing your salespeople to work efficiently without chasing poor prospects. And modern software manages your leads and clients in one place available from wherever there’s an internet connection.
But you should first make sure you’re well-networked with contractors, material dealers and other partner companies in the construction industry, who will then actively send you availability, pricing and other data online so that you only take on the jobs that you can complete for the price and margin that fuels sustainable growth.
Build better risk management strategies
As your business takes on more and larger projects on its growth journey, the risk level increases in kind. Cost overruns, scheduling delays and safety issues come to the forefront as work levels rise.
Make sure that you’ve got a risk management plan that accounts for scaling risk levels.
Technology tools that can help organize and manage dealers, monitor pricing and connect with updated schedules in real-time are key here.
Develop a reputation for quality control
As the company scales, you need to ensure consistent quality across each construction project.
Implementing quality control processes and standards, providing regular training to staff, and investing in quality control technology solutions can help ensure that all projects meet the required quality standards.
Meeting quality standards requires that you track budgets to ensure you generate the right profit margins that generate the cash to reinvest in your business systems.
Manage your business, but lead your people
The long-term success of a construction business relies on the people that you bring into the organization. Take the time to properly define your company culture, and then make sure that you’re bringing people in that fit that culture.
Remember that the greatest candidate on paper might not be a good hire if it’s going to introduce a toxic culture to the business, resulting in a lack of trust and goodwill, and other good employees leaving.
Make sure that you bring your people on a journey as you scale, because any kind of change within your construction business can cause concern among your people, even when it’s a positive kind of change.
You should be open and transparent with your people, explaining the strategy and goals, how their jobs will evolve or be affected, and how new people will be brought into the organisation.
It’s also important to avoid the temptation to micromanage the growth. Appoint people that you trust into senior roles, and keep your role strategic.
As a construction company grows, the role of the business owner/manager shifts to become more hands-off with the day-to-day running of it and managing worksites.
Start ceding these responsibilities over to the people you can trust in the senior roles early, too, so the construction business can be structured for growth from the outset. This will minimise disruption while the growth occurs.
Construction project management software
So much of the success of your growth strategy will come down to having the right project management software.
Buildxact’s industry-leading software has been designed to facilitate growth by:
Streamlining project management
This includes project scheduling, budget tracking, resource allocation, and communication among project stakeholders. This helps eliminate the risk of errors, delays, and cost overruns that comes with a rapidly scaling construction business.
The software allows all stakeholders to access project information and updates in real-time, which helps improve communication across the construction company and reduces the risk of misunderstandings.
Enhancing Efficiency and Productivity
Project management software can automate repetitive tasks and provide real-time data and insights, allowing informed decisions be made quickly.
The software helps ensure that all stakeholders know their responsibilities and deadlines, reducing the risk of delays and missed deadlines.
Enabling Better Decision-Making
With Buildxact, the information that the business leaders need surfaces within a single, accessible, and easy-to-use platform.
To learn more, why not schedule some time with Buildxact? Or visit Buildxact’s website where you can learn how easy it is to get started with a low monthly subscription and free trial.