George Hedley is the author of Get Your Business to Work! and The Business Success Blueprint for Contractors. As an entrepreneur, popular speaker and business coach, he helps business owners build profitable companies.
Q: I’ve tried every method I can to find more work by lowering bids and reducing margins. What other strategies can I use to land more jobs?
A: Winning more work seems to be everyone’s top priority today. Most construction business owners spend every waking moment trying to reduce costs and cut overhead to get more work. But are these the only solutions to win more contracts?
Two years ago, I received a call from Jim Didas, the CEO and co-owner of Range and Civil Construction (RACC). He wanted me to meet with him and his two business partners for a few days to update their business plan. RACC, based in Junction City, Kan., is a heavy civil construction company specializing in military projects. In preparation for the coaching and strategic planning retreat, I had several phone calls with Jim and his two partners, Brian Backus, the CFO, and Duke Durham, the construction manager.
As I got to know them better during our calls, I initially began to question their business strategy. Range and Civil Construction’s mission “is to provide unparalleled construction services with efficiency and effectiveness.” RACC is “committed to 100 percent customer satisfaction through a partnered approach with a dedicated management team, experienced employees, comprehensive safety program, quality control systems, schedule-driven commitment and cutting-edge methodologies.”
Their key success factor is to “please and satisfy customers to obtain excellent evaluations by building safely with superior quality and meeting project schedules and deadlines.” This seemed like a contradictory business strategy in the public works marketplace where price is usually the deciding factor to win contracts and work. But as I probed deeper, I realized they had designed their business development strategy with a focus on securing customers who value excellent customer service more than, or at least equal to, low price.
Didas, Backus and Durham were longtime coworkers and had been thinking about going into business together for a while. They finally saved enough money and started RACC in early 2007. They decided Didas would be the company leader, Backus would handle the office administration and finances, and Durham would handle the field and equipment. Together, they had many combined years in building all types of civil construction.
Once in business, their first goal was to establish a professional support team including a supportive bank, a reactive bonding agent and a construction accountant. After this was accomplished, they needed work. They relied on old contacts and customers for a while but realized they needed to find new customers and opportunities. During their first year in business, they obtained bonding, got organized, invested in computers, developed systems and procedures and bid more than 20 pre-selected jobs within their target size and customer criteria. They finally landed their first new contract in 2008. Their first few projects included performing earthwork, demolition work, site work and utilities on a 60-acre military project.
Win More Work
RACC’s key to winning work is to seek customers who value excellent work, a teamwork approach and a perfect safety record. They like to work with customers who will give them top customer satisfaction ratings based on their superior work.
RACC focuses primarily on military construction projects, and when bidding projects, their main objective is to find creative, innovative ways to implement their construction plan and satisfy the customer. The strategies they use to win jobs include improving the mandated schedule, offering value-added engineering ideas, providing a safe work environment, improving productivity and providing quality control methods. RACC’s estimating team also looks for ways to build the project faster, with the best possible solution and job-specific equipment. When jobs can be built faster, it reduces overhead costs and satisfies the customer.
Over time, RACC has hired experienced and qualified managers, field foremen, supervisors, engineers, surveyors, operators and laborers who have positive “get it done” attitudes and want to build with excellence.
To maximize their bonding capacity, they avoided using their initial capital to purchase equipment. Instead, they made arrangements with equipment companies to lease the exact equipment needed to efficiently build each project.
Establish A Customer-Focused strategy
RACC’s company mission and vision has paid off. Their company has grown to $16 million in revenue over the last three years. They have maintained an impressive safety record with zero lost-time accidents. Their customer satisfaction ratings are excellent. And now, other large prime and specialty contractors are approaching them about joint venture projects. Good news travels fast.
Building a business that provides excellent customer service takes a major commitment and large investment in systems, people, training, technology and innovation.
To ensure RACC achieves the highest ratings from their customers, they go beyond the normal call of duty. Listed below are some of their standard operating procedures:
• Daily safety meetings on every project
• Regular in-depth communications with their customers
• A full week of training every winter for all foremen and supervisors
• A mandatory 10-hour OSHA course for all new employees
• An annual 30-hour OSHA course for all foremen and supervisors
• Regularly scheduled ongoing task training for all field personnel
• A full-time quality control manager on staff
• Ongoing technology training in software, equipment and GPS systems
• A full-service surveying and engineering department
RACC has also been able to build a strong team of experienced managers and productive field employees dedicated to a respected fulfilling mission. Are you willing to focus on providing the best customer service possible?
RACC’s primary focus is on military contracts, including Multiple Award Task Order Contract (MATOC) projects, Historically Underutilized Business (HUB) zone projects, Indefinite Delivery Indefinite Quantity (IDIQ) projects, the Small Business Association’s 8(a) projects, and Socially and Economically Disadvantaged (SED) projects. For more information on these types of opportunities, visit www.sba.gov.
Construction Business Owner, April 2011