Many contractors are incredibly busy, but somehow their profits are not reflecting how hard they work. For many business owners, it seems that there is so much time spent just keeping things going that there is no time to really grow their business. If that sounds like you, you may be working on the wrong priorities. If you can identify the top priorities to grow a contracting business, you could shift from running your business to growing it.
What Are You Doing Now
The first thing you need to look at is what you are spending your time on now. There are some common factors among many construction business owners. Too often, they are spending their time in the wrong place, which is hindering their growth. So what are you spending your time on?
Many business owners feel like they have maxed out their workload. They have taken on all sorts of tasks that could be done by someone else. And they have passed that on to their manager and team leaders. Not only are the owners stressed and stretched thin, so are the managers and team leaders. If your managers and team leaders are stretched thin, they aren’t able to effectively manage their field teams and achieve maximum profitability.
Many business owners get caught up doing lots of work that they don’t need to do personally. What are they doing? Try out this list and see which of those things you are still doing yourself:
- Creating estimates
- Managing crews
- Scheduling crews
- Managing Projects
- Preparing Invoices
If you are doing any of these things, you are spending your time on the wrong tasks. All of these things should be done by reliable, well-trained team members.
Where is Your Focus
Being bogged down doesn’t just cost you time. Being involved in the day-to-day details of running your business also costs you focus. It’s easy to see how a construction contractor who is spending all day just keeping the business moving will have little time to think about the big picture.
As a contracting business owner, your greatest asset is your leadership. You’re the one who should be thinking about the bottom line, and about how to satisfy customers and grow your business. But, if you are spending all day just running your business, you are robbing your business of your leadership. That’s how so many contractors get stuck at their current plateau, working long hours and high stress, without seeing the returns on their labor.
To be an effective leader, you need to hand off the smaller tasks to well-trained team leaders and other managers. In fact, identifying, cultivating, and training leaders should be a significant part of your focus. When you put the right leaders in place, they can take care of the smaller stuff while you think big.
What is Your Goal
If you don’t know what your goals are, it is hard to work towards them. Too many general contractors get caught up in the small goals. Sure, it’s important to hire a tight team, provide for your family, pay your taxes, keep your books, and lots of other small goals. But the big picture is where you should be spending most of your energy.
So what is your big picture goal?
One big picture goal is the primary purpose of your business, to deliver the product the customer wants. That’s bigger than just getting a job done. It means giving the customer what they want. That’s how you will build a business.
In addition to giving the customer what they want, you should be focused on some other big-ticket goals. You want to earn large profits and make high margins. That’s the only way to deliver the wealth that you want for yourself and all of your employees. It is the ultimate “big picture” goal.
What You Can Do When You Focus on the Big Picture
Focusing on the big picture, and really putting your energy there, will start a cycle of growth. Companies that are making significant profits are able to do many other things that will help their businesses grow even more.
When you are turning a decent profit, you can start developing a strong leadership team. That includes managers, superintendents, and field leaders. You can also create employee buy-in that builds a team mentality to propel your business forward. With strong profits, you are able to invest in quality workers who are experts at their craft and can raise the quality of your final product.
With steady growth and good profits, you can take the time to reach some crucial financial goals, as well. You can start building estimates that are accurate and avoid profit fade from the estimate to the final job cost. When your profits are stable, and your workers are functioning well, you are better able to track weekly field job costs and ensure that your labor production is on-budget. Instead of constantly chasing the next job, you can market to high-revenue and high-profit repeat customers.
If you’re spending all of your time on the small tasks, you aren’t chasing the bigger goals. Often this comes down to a matter of trust. Business owners who can’t trust others to make decisions take too much work on themselves.
Wealthy, successful contractors never make all the big decisions. They have a trusted team of managers who are free to make the right decisions to run a profitable business. So making sure that you can relinquish some control to accountable managers, supervisors, and team leaders is the only way you will grow into a wealth-generating business.
What Should Be Your Priorities
You need to focus on some top priorities if your business is going to grow. We’ll list ten of the most common priorities, but you should only work on three at a time. Working on more than three priorities loses the benefit of prioritizing and spreads you too thin. Focus on no more than three goals at a time, and you will start to see your business change and grow.
Here are ten common goals, in no particular order:
- Increase net profits
- Eliminate profit fade between initial bids and final job costs
- Create accurate, complete estimates
- Create financial and accounting systems that are accurate, timely, and complete
- Develop a strong and reliable management team
- Develop an organizational structure that can be accurately charted, with a chain of command, levels of authority, and clearly written job descriptions
- Hire reliable employees to fill empty positions (referring to your organizational chart)
- Develop a robust and proactive marketing strategy
- Start an investment plan for passive wealth building
Pick any three of these goals to work on. Don’t move on until you have achieved all three goals completely. It’s more important to achieve excellence in one area of your business than to achieve mediocrity across the board.
Using Needo’s Technology
Many of these goals can be achieved with the help of Needo USA’s construction management technology. When it comes to creating accurate bids and eliminating profit fade, Needo’s technology is indispensable. Along with tracking labor and materials costs, estimating becomes a relatively smooth process. Needo’s technology can also aid in the financial accounting system, creating invoices with ease. To learn more, contact Needo to find out how we can be part of the priorities to grow a contracting business.