Stuck is the new norm. Most contractors stay stuck at the same level they have been for 2, 5 or even 10 years. These contractors work hard to maintain that level — but remain stagnant with the same salespeople, field employees, project managers, estimators, supervisors, foremen and number of crews. They get stuck in a pattern of doing the same thing over and over again.
They keep bidding on both the same project types and the same customers, somehow still hoping to land better work. They never seem to get ahead, and they continue to complain about low revenue, too many hours, lack of trained employees. They want more — more freedom, time, money, time off and wealth. The question is: How do they get it?
Many construction business owners are not happy with their personal situations and how their companies are performing.
Yes, it pays the bills and keeps them employed, but they’re stuck, don’t know what to do, and where to begin to properly scale their operations and move to the next level. They feel as if they are trapped in a box. Does this sound like a familiar scenario in your life?
Your business is the outcome and reflection of your actions leading and managing your company. You decide what to do — or not do — to grow. The best construction companies are led by owners and managers who want to always scale and move to a higher level.
What’s Holding You Back?
Fear is what holds most people back. They’re afraid of making the wrong decisions, and want a guarantee their choices will end up being right without taking any risk. Therefore, they postpone doing what they know they must to break through to the next level. So, they delay, sometimes indefinitely, having to make the hard choices and decisions. What are you afraid of?
I recently met with 50 commercial construction business owners at one of my 2-day mastermind peer groups. Nearly every member of these groups continues to improve, scale, grow, make more money, and increase their investment portfolio.
Many have doubled their sales and net profits over the last few years. Others have increased their crew from 30 to 60 employees in 2 years, and some have changed their business model from low-bid publics works to private, negotiated contracts at high margins with much success.
These contractors know that taking risks is part of business and remaining resistant to change is far worse than doing nothing.
Do or Do Not; There is no Try
Unfortunately, many contractors are still stuck at the same level of size, profits and growth for many years. In fact, when you consider the effect of inflation, also factoring in price increases for materials over the last several years, growing at 10% per year is not any growth at all, given that construction costs have risen 20% over the last 5 years. Therefore, staying at the same annual revenue and profit levels is a net loss.
These stagnant contractors may talk a strong game, but never actually follow through to implement their decisions to improve. Your decisions must be “yes” or “no,” and never “maybe.” You must stop claiming you are “trying” — trying means you are not making progress toward or accomplishing what you need to reach your goals.
Either you do it or you don’t. Stop making hollow commitments you will never keep. Now is the time to decide to do something, even if it’s risky, and move to the next level. So, where do you start?
The following are a few common steps construction business owners can take to gain some ground and begin growing their businesses. Consider these action items and where you stand when it comes to accomplishing each of them.
- Spend more time finding higher-margin customers.
- Implement new systems and processes that may save your company time and money.
- Delegate, let go and hold people accountable to achieve results and perform.
- Integrate both job-cost tracking and project management software.
- Build a great place to work that attracts and retains the best talent available.
- Spend time developing, mentoring, coaching and training your top talent.
- Promote emerging talent from within and give them a chance to excel.
- Understand your financial numbers and review them weekly.
- Sell any old equipment that hasn’t been used in over a year.
- Find time to see customers to build relationships.
- Stop chasing low-bid and low-price work against too many competitors.
Stop Kidding Yourself
I hear the same story every year from stuck contractors who boldly proclaim an interest in improving, growing and finally making the big decisions required to move their companies to a higher level. It’s big talk with no execution. While their company’s revenues and employees continue to hover around the same numbers annually.
For example, a $3 million contractor with three crews has remained stuck at the same level for many years, and is now shrinking in annual sales — all while inflation increases their overhead and results in reduced profits. It’s difficult to say they will succeed in growth without ever truly trying.
The time to stop kidding yourself is now. Decide to do something different and work toward upscaling your company — or stay put and do nothing. If you choose the latter, however, be prepared to stifle your grumbles and learn to be happy going nowhere.