Builders: How to Re-Think Your Building Business for Growth
Builder re-thinking his building business for growth
So, you want to position your construction company for growth. Right? Good thinking!Time says US house prices have stopped declining (Dec 27, 2012); the NAB is picking a recovery in Australia and two NZ political parties are promising thousands of new house builds.Problem is, growth on back of recession brings its own problems and savvy builders need beware.In this article I will outline four areas savvy builders re-think when preparing their building business for a growth environment.
1 Cash Flow
Building companies surviving the GFC have become skilled in managing with little cash surplus. Most are considerably leaner now than they were. Don’t you agree? Cash may be tied up in slow payers meaning you have had to rely on the good will of suppliers for favorable credit terms. But growth puts pressure on cash flow. So one real problem growth brings is increased cash flow pressure. Some good companies will collapse while growing!However it’s not all negative! Growth does have its financial upsides, e.g. bigger jobs, larger deposits, work booked further ahead; fewer competitors; recovery of margins etc.But, savvy building companies will re-think how they manage cash flow. They understand why careful financial management is just as essential in growth as in recession.
the-successful-builder-Unbalanced Businessman
2 Company Balance
Growth is rarely balanced. Uneven growth is a threat.For example, it may be quite straightforward to turn up the marketing and gain an increased number of leads. But if the sales staff are stretched, then many leads will not get followed up and the marketing spend will be wasted.Similarly, if the sales staff feel pressured to race through presentations, the conversion rate to sales may drop.On the other hand, if sales outgrow the project management production capacity, then customers may be disappointed by late starts or less than satisfactory builds.A savvy builder re-thinks how growth will impact the balance of the building company.
3 Staffing
the-successful-builder Hapless Worker
Finding it difficult to get good staff? You’re not alone. Problem is, if it’s hard now it gets harder in growth. Laid off workers have taken other jobs or left the area. This means that for surviving building companies, pickings are slim…especially for higher skilled builders, leading hands and project managers.When growth comes, there just isn’t the staff out there!So, savvy builders work to improve the skills of their current building team members. They may not reach the heights, but they are better equipped to step up a stage when the business does grow.A simple way to begin this training is to document what you and other key people do, or what you want done, flow chart it and then get a couple of team members trying their hand at it. You can improve as you go.
4 Systems
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In almost every case when a business grows, it needs to shed the system that got it the growth! Just because it worked to get you to the current place is no reason to assume it will work in the future. I know…you’ve heard that before.So while your systems have may have served you well for now, they may not be helpful once you hit growth.So, be a savvy builder. Take some time to think through what your building business system will look like after growing several hundred percent. Then start creating the step to get there.
Question
The environment looks as though it’s changing. How's it going for you?The $64,000 question? “How are you re-thinking your business for growth?”I’m keen to hear how you are preparing for coming growth.Post your comments below
Graeme
P.S. Whenever you’re ready….here are 4 ways I can help you grow your building business:
1. Grab a copy of my free book
It’s a road map of a successful 15 minute sales call that’s guaranteed to increase your conversion rate. http://thesuccessfulbuilder.com/book-15-min-sales-call/
2. Join Trade Mates and connect with builders who are scaling too.
It's our new Facebook community where smart builders learn to get more income, time and freedom. View our free business resources for builders. Ask questions of like minded business owners and business coaches. Give your knowledge and expertise to help others. - https://www.facebook.com/groups/TradeMates/
3. Join My New Group
I’m starting a new group called “OnRamp” to kick start sales and marketing in your business. If this sounds like you, message me with the words, “OnRamp”, and I’ll get you all the information.
4. Join Loft Members
If you’d like help to get off the tools, make more money and get your life back...just message me at graeme@thesuccessfulbuilder.com and put “LOFT MEMBERS” in the subject...tell me a little about your business and I’ll get you all the details.