Business Accountants: 30 Effective Strategies for Managing Your Construction Business

Managing a construction business can be quite challenging, but with the right strategies in place, you can steer your company towards success. We understand the complexities of this industry, and after years of experience, we’ve compiled 30 top tips and strategies to help you effectively manage your construction business.

1. Develop a Lead Generation System:

   • Generating leads should be your top priority. Leads are the lifeblood of your business, and without them, you won’t secure projects. Use services like The Blue Book, Building Connected, Dodge, or visit potential clients directly to build your lead pipeline.

2. Outsource Estimating:

   • Estimating is time-consuming and crucial for winning bids. If you’re a smaller contractor, consider outsourcing your estimating to experts like us who specialize in accurate and efficient estimates.

3. Utilize Estimating Software:

   • Bid more efficiently by using estimating software. Tools like Planswift and Bluebeam can streamline your takeoff process and boost accuracy.

4. Establish an Office:

   • As you grow, having a central office becomes essential for easy access to job sites and meetings with clients. Invest in fast computers and software, including estimating, PDF editing, accounting, and construction management tools.

5. Hire the Right Team:

   • Building the right office team is crucial. Invest in skilled professionals for roles like Project Manager, Accountant/Bookkeeper, Office Manager, Estimator, and Purchaser. Ensure they have the time and focus to excel in their roles.

6. Delegate Tasks:

   • Delegate responsibilities to your team to avoid micromanaging. Trust your employees to handle tasks efficiently and independently.

7. Create Long-term Plans:

   • Have a clear vision for your business and set realistic goals. Plan how you’ll achieve these goals, including the number of projects you need to win.

8. Choose a Niche:

   • Specializing in a particular type of construction can set you apart. Become an expert in a niche, like restaurant or office construction, to charge premium rates and gain credibility.

9. Build a Strong Sales Team:

   • A competent sales team is invaluable. Consider hiring salespeople to expand your client base and gain quality leads. Building personal relationships with clients can also help.

10. Embrace Digital Technology:

    • Incorporate technology into your business with management and estimating software. Streamline operations, improve accuracy, and enhance communication.

11. Invest in Skilled Labor:

    • Train your field labor for efficiency and quality. Supervisors should be adept at training crews in the field.

12. Use Piece-Workers and Subcontractors:

    • Consider hiring piece-workers or subcontractors to expedite projects and reduce the management burden. This approach can be highly efficient.

13. Rent Equipment:

    • Whenever possible, rent equipment instead of buying to save on costs. Reserve capital for other critical expenses.

14. Calculate Overhead Correctly:

    • Accurately calculate your overhead costs and incorporate them into your estimates. Overhead percentage equals overhead expenses divided by total sales.

15. Avoid Low-Profit Projects:

    • Only accept projects with acceptable profit margins, unless they promise future lucrative work from a client.

16. Write Detailed Proposals:

    • Create detailed project proposals to ensure transparency and cover all aspects of the project. This helps avoid disputes and misunderstandings.

17. Prioritize Customer Service:

    • Outstanding customer service is essential. Handle client needs, disputes, and challenging situations with care to build long-term client relationships.

18. Lead by Example:

    • Be a leader who inspires your team. Be understanding and delegate tasks to allow your employees to excel.

19. Use a CRM for Sales Management:

    • Implement a CRM system to track customers, projects, and sales. It can streamline your sales management processes.

20. Invest in Professional Templates:

    • Professional templates for documents like contracts and purchase orders enhance your brand image and professionalism.

21. Create an Impressive Website:

    • A well-designed website can improve your company’s image and attract more clients. Consider hiring a freelancer to create one.

22. Consider Marketing and Lead Generation Services:

    • Invest in online advertising or partner with a digital marketing agency to expand your reach and generate quality leads.

23. Train Your Skilled Labor:

    • Invest in training for your labor force to increase speed and quality of work. Knowledgeable supervisors can be instrumental in this process.

24. Keep Licenses and Insurance Up to Date:

    • Ensure all licenses and insurance policies are current to remain compliant and protect your business and clients.

25. Plan Projects Ahead:

    • Plan projects at least two weeks in advance to facilitate material ordering and crew scheduling. Maintain a construction schedule to track progress and deadlines.

26. Join Industry Associations:

    • Consider joining industry associations like the Better Business Bureau or local construction groups to enhance your credibility.

27. Cash Flow Management:

    • Manage cash flow effectively by securing financing options, credit lines, and investment funds to cover material and labor costs.

28. Client Loans:

    • Partner with lenders to offer client loans for residential construction projects. This can broaden your client base by making projects more accessible.

29. Specialize and Focus:

    • Concentrate on a particular type of construction to build expertise and command higher rates.

30. Hire a Marketing Expert:

• Consider hiring a marketing and lead generation company or utilizing online advertising to increase your project pipeline and client base.

Managing a construction business requires careful planning, skilled teams, and efficient processes. Incorporate these strategies to navigate the complexities of the industry successfully and drive your construction business to greater heights.

Your Outside Team