For many construction business owners, growing pains come with the territory. It's a familiar story: you need more jobs to have the revenue to hire new team members, but you need more team members to get the work done. Learn more about navigating growth and setting your business up to weather the changes with these five scalability tips.
Scaling your business sets it up for growth so that as you onboard new clients for your contractor business, you're ready to take advantage of those opportunities and grow your business as smoothly as possible.
5 Essential Things to Consider When Scaling Your Construction Business
1. Update Your Business Plan
The first step to planning how to best set your contractor business up to grow successfully in the coming months and years is to revisit your business plan.
- Review your metrics from previous years to understand what amount of growth is feasible.
- Evaluate what your expected growth in profit margin is.
- Determine your goals for the next several years.
Understanding your goals and budget can help you plan for investments in successful growth, such as hiring and investing in new equipment.
2. Evaluate Your Hiring Needs
The construction industry faces an ongoing labor shortage -- there were 10,000 more unfilled construction positions in July 2023 compared to July 2022. Limited resources can make it difficult for your business to take on new projects and expand. Factoring in labor issues and focusing on recruitment is an important aspect of your strategy for scaling your business.
3. Create Streamlined, Consistent Processes
When the processes you use to manage your construction projects are consistent, it can create clarity within your organization. Implementing consistent internal standards for day-to-day activities like onboarding, invoicing, and client management can help things run smoothly.
When evaluating your processes, you can also take the opportunity to implement new ways to save time in your day-to-day operations, like:
- Implementing electronic signatures
- Digitizing payroll, RFPs, and other paper processes
- Implementing project management software to manage your project timelines
4. Invest in Sales and Marketing
Scaling your business appropriately takes capital, which makes it essential to have strategies in place to reach new clients. As you look to update your marketing and sales strategies, take a moment to identify who your ideal clients are and how you can best reach them. You can further build your brand online with an engaging website. Drive more awareness for your contractor business with ongoing blog content and social media posts. Finally, your sales and marketing teams can also help you seek client testimonials and generate new referrals.
5. Scale Your Insurance Coverage Too
As you chart out your plan for your company's growth, don't forget to factor your insurance coverage into the strategy. As your business grows, so will your insurance needs. There are a few ways your coverage needs can evolve:
- As your company grows to work on new projects, you may need to increase your limits.
- If you hire your first employees, you will likely need worker's compensation insurance.
- If you add new vehicles to your company's fleet, they will need commercial auto coverage.
- If you're adding new locations to your business, your property insurance coverage may need to be re-evaluated.
- If you're digitizing more of your business and bringing more of your processes online to become more efficient, you may want to look into a cyber liability policy.
Managing a growing business can be a lot to juggle. By proactively thinking about how scalable your business is and planning for growth, you can make these transformations easier and more successful.
Reach out to learn how we can help keep your business covered through every growth spurt.