Without a plan for meeting your growth goals, you’ll need a lot of luck. Instead of taking a gamble with your company’s future, set a strategy for the long haul. A focused and well-thought-out plan will get you where you need to go. Here’s how to meet those goals and take your company to the next level.
1. Look to the Past to Shape the Future
You’ll be able to set, meet, and exceed realistic goals if you have a clear picture of what your company’s strengths are. Review past projects to dive deep into your successes and struggles so you’re aware of what types of jobs are most profitable for you.
Use your estimating data and project financials to determine:
– Industries you’ve been successful in (i.e., medical, education, hospitality)
– GCs you’ve had good working relationships with
– Timelines that don’t stretch your crew too thin
– Specialization that’s especially sought after and lucrative
Knowing your company’s own sweet spots will then make market research easier. Seek out bid invitations for the types of work you know is profitable for you, and don’t waste time bidding for jobs that put you at risk of blowing your budget or just breaking even.
2. Build as Much Pipeline as Possible
One mistake that less experienced subcontractors tend to make is to stop bidding when their immediate schedule is full of field work. The crew is busy, but leaders aren’t thinking ahead to what happens after project closeout.
You can avoid this mistake by never stopping the bidding process. When your estimating team is looking years ahead in the case of extremely large projects, they can take the time to make those strong bid decisions, and ensure you have choices.
Owners and GCs want to work with confident players in the construction space, and they can sense desperation. In the same way a job seeker who doesn’t need a position is more likely to interview strongly and land the role than one who comes across as too eager, when you play it cool, you’ll ultimately end up with more opportunities.
Develop those relationships with GCs, and bid as many (profitable) jobs as you can so your pipeline stays full and you always have a backup plan.
3. Break Your Objective Into Manageable Stages
What’s your company objective? If your ultimate goal is to grow by 20%, don’t just plan to reach that number by year-end. Say you made $1 million last year and you want to hit $1.2 million this year. Where will that added revenue come from?
You’ll need to split out your goals and work backward. In addition to the revenue they drove last year, your sales or estimating team will need to increase pipeline enough to cover the new goal.
For an added $200,000 for the year, a team of two estimators needs to bring in $100,000 more each. This could mean requiring $25,000 more revenue per estimator per quarter, but you’ve also got to keep in mind seasonal trends and downtimes when there may not be as much work to bid. Make the goals attainable, and if that’s a stretch for your team, it might mean hiring another set of hands to make the numbers work for you.
4. Conduct Regular Pipeline Reviews
Waiting and hoping have no place in construction. Make sure you’re tracking and reviewing progress regularly to see where you are in terms of goals. The longer you wait to hit targets, the more likely you are to fall short of your plans. Meet with your team both individually and as a group to discuss:
– Roadblocks and potential lost bids
– Actual bids lost and what went wrong
– Competition and how to beat them
– New opportunities to consider
Encouraging your sales and estimating team, as well as coaching them through challenges, will help you keep a pulse on what’s going on and allow you to pivot as needed the moment you see problems cropping up with your strategy. Energizing your team will help them meet their milestones early and often.
5. Anticipate and Mitigate Risk
There have always been risks involved in the construction industry, and the past few years have only increased challenges – from Covid-19 lockdowns to supply chain and pricing issues to labor shortages and fluctuating interest rates.
There’s no perfect year – or perfect project – so build cushions into your plan to mitigate potential risks. Some ways to do this include:
– Bid more work than you need to meet your goals so you have options if an expected project falls through.
– Increase the accuracy of your bids so that preventable waste doesn’t derail profits.
– Cultivate relationships with suppliers for better service when it comes to material pricing and delivery.
– Streamline your tool stack to reduce inefficiencies in recordkeeping and communication between office staff and field crews.
– Diversify your expertise and be prepared to bid different types of work based on industry trends and cultural shifts (sustainable building, medical complexes, etc.).
With reasonable planning, a healthy and well-managed pipeline, the right tools, and a dose of realism alongside your positive outlook, you and your team will be set up for the growth you aspire to.
Want to see how STACK can drive efficiency in the office and the field? Book a meeting now.