It doesn’t matter what lofty, ethical goals you have in your schemes of being a business owner; at the end of the day, your business has to be making profit. It’s true for all businesses, and it’s not exactly the easy ride that a lot of people like to make it out to be. Making strong profits is becoming harder and harder for businesses both big and small, which is threatening the health of both the businesses themselves and the economy at large.
Many people in the construction industry, which has hardly ever been painted as ultra-affluent that way the finance sector has, are finding it harder to make strong profits these days.
One of the biggest problems facing the construction industry is the fact that low profit margins are sometimes essential to ensuring you’re able to get a desired job. With a fairly stressed-out economy in many places across the globe, a lot of prospective clients are looking for the best deal possible when it comes to their construction projects. Construction businesses have to bid competitively in order to get the best projects, which means they end up making less and less profit the more competitive the project bidding gets.
Clients are getting construction work done for lower and lower prices all the time, meaning that low profit margins are very common in the construction industry. It means that just a few mistakes, ones that may have been seen as minor if the profit margins were a little higher, could result in monetary loss that completely wipes out profit. So taking measures to increase profit is essential.
You need to make sure mistakes are avoided, costs don’t get too high, and that your standing in the field is as unblemished as possible. Here are some essential tips for business owners in the construction industry who need to give their profits a boost.
When something goes wrong on a construction site, it usually goes very wrong. Though the business isn’t the deathtrap that some people make it out to be, there’s no denying that construction work is one of the most dangerous modern jobs out there. There’s a lot of pressure on employers to ensure their construction sites are as safe as can be – and rightly so. Though enhanced safety is something you should pursue for obvious reasons, it’s also worth looking at how a lack of safety measures can affect your profits.
Prospective clients will use several criteria when measuring your suitability for a given job. One of them will be the safety measures you employ. Clients don’t want injuries taking place during work they’ve commissioned; it can make them feel guilty, and it can also affect their reputation. So making sure you’ve got safety first on the agenda is a key way to ensuring you get the best clients. Another thing you have to consider is the possibility of lawsuits. If someone is injured on your construction site, then they’ll have the right to sue you – and, if neglect can be proven, then they’ll probably win. Not exactly the best thing for your profits.
Enhancing productivity in construction is essential, but it can seem like an overly complex task for managers. After all, what more can you do beyond making sure you hire strong and fast workers? There’s much more you can do. You need to think about both the site and the office from which the business is being run. Out on the site, productivity is the responsibility of the supervisors or foremen. In the office, effective project management is what will improve matters.
Supervisors need to ensure that workers are at their best. They need to ensure that workers aren’t slacking off, but they also need to be wary of the fact that they’re going to need breaks. Frequent small breaks can be much better for productivity. Supervisors also need to make sure that workers are looking after themselves by remaining hydrated and properly protecting their skin from the sun. All of this helps them keep their strength up; knowing that they’re being looked out for will also increase their overall job satisfaction, which, in turn, improves their productivity. Make sure supervisors are keeping a close eye on day-to-day productivity with accurate records; this data will help you improve things in the long run.
In the office, you need to ensure your personnel are also satisfied and kept free of as much stress as possible. The office is where all the back-end work takes place; it’s where you plan projects, estimate budgets and work hours, complete accounting, and work on the reputation of your business. More productivity here is just as important as more productivity on the site itself. Improving matters in the office can help you avoid mistakes such as overcomplication, which is alarmingly common in this line of work. Ensure you’re using good construction project management software, but don’t let that distract from the need to have good project managers!
Get the best equipment
The construction company that has the best equipment is more likely to get the job done on time, as well as being more likely to meet (or even exceed) the expected quality standards. The equipment you use will often be useful information to present to prospective clients, and they will generally base their contracting decisions based, in part, on what sort of technology you have to hand. Good modern equipment will help with productivity and worker safety, too, so there’s little reason not to invest! You should consider looking into construction business loans to ensure you don’t have to look into ultra-cheap and potentially inefficient equipment!
Another thing you need to make sure you’re doing is keeping up with maintenance of your equipment. Allowing your equipment to fall into disrepair simply means you’re going to have to spend a lot of time and money either fixing or replacing them – and while frequent maintenance means more upfront costs in the immediate future, those costs (as well as the time expenditure) will be much less than what you’ll need to spend on fixes and replacements. Such an outcome will cause a lot of disruption to the project, which isn’t exactly going to help your reputation.
While it’s essential that you get great equipment, this doesn’t mean that you shouldn’t aim to save some money while doing so. Budget equipment isn’t a good idea, but getting things on sale, going second-hand, or even going to mid-to-high-tier products instead of the most premium products possible are all good ways of saving money while also focussing on quality. High-quality durable used cranes, for example, are particularly useful things to look into, purely because cranes can get so expensive otherwise. The costs of the most expensive items aren’t always justified by their quality when you compare them to second-hand options or even new options that cost a little less.
There are other areas in which cost-cutting can be made. If you need more workers on your team, then hiring an outsource labour force can be a lot more cost-effective than recruiting more full-time workers from scratch. (You don’t just have the salaries to consider – you also need to remember the recruitment costs!)
Improve your marketing
One of the best ways for any type of business to increase profits is to boost the efficacy of their marketing. Digital marketing is where you should place a lot of focus, which also means you need to ensure your website is up to the task – something we’ll visit in the next section!
Search engine optimization is essential because most clients will perform an online search to research the sort of companies they might want to work with. While many business owners will go straight to construction project bidding platforms and make firms battle it out in bidding, there are business owners out there who are happy to take the route of independent research and offers. This is why it’s essential that your marketing is effective – but be careful not to spend too much money on a marketing service that’s promising you the world. Research marketing agencies carefully before you sign anything!
Work on your website
A lot of construction business owners don’t feel that their website is all that important. This is why so many websites in this field look pretty basic and seem to be devoid of content. But prospective clients are going to check out your website – and if what they see doesn’t impress them, then they’re going to be much less likely to pick you to help them out with their project. A website is an essential part of building an effective brand for your marketing – but you also need to ensure that it doesn’t just look good. It also needs to be informative.
As we highlighted earlier, clients are going to select a construction company based on several criteria, including the sort of equipment you use and the safety measures you have in place. Where’s the best place for them to get all of that information? That’s right: on your website. Your website is where the credentials of your construction business get a chance to shine. Images and information of your previous projects is a must, and creating some blog content can also help a lot.