If you are experiencing growing pains while scaling your construction business, you are not alone. Successful companies are constantly evolving, and while expanding them to serve more clients and earn a higher profit margin is the life line for businesses, it is not without its challenges.

In this article, we explore some of the typical growing pains that owners of construction company owners experience, and offer antidotes to overcome them. We offer tips to help you take your business from where it is today to where you want it to be tomorrow.

4 Common Challenges to Growing a Construction Business

Here are four reasons you may be finding it challenging to grow your construction business:

• Difficulty Finding Workers: Growth is impossible without having the right people to carry out your business goals and handle the increased work that is coming through the door. Finding and retaining high quality workers especially in the competitive construction labor force is not easy and takes focus and effort.  
• Outdated Business Plan: It’s common to think of a business plan as a one-time document that can be put away after you start a construction business. However, even if you projected beyond the first year in your initial plan, it is likely outdated. You can gain new focus by updating it to reflect the evolving construction market and how your company has changed from day one in size, niche and goals. 
• Murky Roles: When team members are uncertain about their responsibilities, they cannot do their best work as when they are focused. Time and effort is wasted, and employees often get burned out by the stress and frustration that comes with not knowing their tasks or taking on too many roles. 
• Ineffective Marketing Strategy: If your company’s sales pipeline lacks a constant flow of strong leads, revisit your marketing plan. While word of mouth continues to be one of the best ways to bring in new jobs, it is most effective when that praise is captured, communicated and incorporated as part of a sustainable marketing strategy.

21 Tips For How to Grow your Construction Business

Consider the three P’s when growing your construction business: People, Processes and Prospects. These three avenues will give you the most bang for your buck as you expand: 

How to grow a construction company through your people 

People are the core of any business, and having the right people in the right place is essential  to accelerate the growth of your construction company. Here are some ways to grow through your team:

• Review Your Team: Do you have the right team in place for today and the future? Review your current roster of employees to determine where there are gaps, or even redundancies. This will help you decide where to focus your hiring as your company evolves.
• Revise Roles and Responsibilities: With so many moving parts making up every project, it takes a dependable and skilled team to do construction right. But just as important is everyone knowing their roles and responsibilities. This avoids miscommunication, wasted time and costly change orders. And, in the end, people work faster and better when they are focused. Review, revise and spell out the responsibilities of each role to make your team more efficient, and remove the burden on you of picking up the slack. Learn more about construction roles and responsibilities in our Guide to Construction Job Titles 
• Invest in Hiring and Onboarding: Once you determine the work force you need to fuel your company’s growth, focus your investment in hiring that will make the most impact. And, don’t skimp when it comes to onboarding. Having a consistent and professional way to train employees and help them understand the values and goals of your company will pay off in the long run. It can help retain quality employees because they know their role, and feel part of helping the business to succeed. Learn more about how to navigate the competitive construction hiring landscape with this How to Recruit in Construction guide.
• Be a Dynamic Leader: In the end, the growth and vision of a business rests with its leader. As the owner of a company, it is up to you to express the goals, values and future vision of the business. Convey this vision to employees, clients and others so that they are excited about the company mission too. 
• Invest in Your Growth: As you probably know all too well, expanding a construction business does not happen overnight, and nor does it come organically. It requires the investment of both time and money. 
• Provide Quality Vendor Services: Building a reputation as a company that has a good relationship with suppliers and subcontractors is another way construction pros stay on the growth trajectory. Paying vendors on time and making your business the kind that subcontractors want to work for helps attract more quality and dependable services than companies which are less attentive to this sector. That, in turn, of course guarantees your company is delivering high quality work to clients.  Plus, it makes it more likely that you will receive cost-saving deals from your regular vendors.

How to Grow a Construction Company Through Your Prospects

Consider these ways to evolve your business through your clients, referrals and other prospects:

• Revisit Your Marketing Strategy: Understanding how leads land in your sales pipeline is key for repeating the success. Review your existing marketing strategy, or create a plan if you do not already have one. A successful marketing plan is connected to, and aligned with, sales. It also includes ways to measure what efforts are working and which are not effective. Read more with these 10 tips of  How to Increase Construction Sales. Also, learn what types of advertising pay off the most for construction pros in Guide to Advertising for Construction Businesses.
• Be Choosey: Not every client is the right fit. While new business owners hesitate to turn down any clients, most learn to say no as their business grows.Taking on customers who do not match up well with your services, style of working and other considerations can cost  in profits, time and hassle. Many construction pros use a list of screening questions to help them detect red flags.  
• Encourage Referrals: Referrals are the bread and butter of drawing in new clients. Make it easy for your past clients to provide your company positive reviews to post on your business website. Seek other ways to showcase your work through customer testimonials, and referral programs.  Email marketing is a cost-effective way to bring in new clients to your construction company, and strengthen relationships with those past and present.  Learn more about How to Do Email Marketing for Construction.
• Accentuate Your Strengths: Knowing your niche means you can put your best business foot forward. Keep your strengths front and center in your marketing, meetings with clients and the many others who contribute to the growth of your company. 
• Network, Network, Network: Getting the word out means meeting people who can help you along the way whether it is through referrals, hiring or partnerships. Join professional organizations and attend trade shows to meet other pros in the construction industry and keep up with trends. Forge community connections through local business organizations and by attending or sponsoring events. Learn more in our  Guide to Networking in Construction.
• Proactively Seek New Opportunities: There are many avenues available for pursuing new ventures. Take advantage of the ones that best fit your company, whether it is digital advertising, social media or tapping family and friends. Find out more with our  Guide to Social Media for Construction Companies and learn about the pros and cons of 17 popular tactics for finding new clients in  How to Get Construction Leads
• Focus on the Customer Experience: Success, of course, depends on the bottom line: providing five-star customer service. Happy clients are one of the best ways to assure that leads continue to pour in and increase the likelihood of building a successful and profitable enterprise. That means not only focusing on performing high quality work for homeowners, but assuring that the journey to get there is a good one throughout the life cycle of the project.  

How to Grow a Construction Company Through Your Processes

This may be one of the least exciting aspects of running a construction business, but focusing on how your business operates is as important as the construction work your company executes. Here are some processes to review and consider as you scale:

• Redraw Your Business Plan: Even if your first business plan projected five or 10 years down the road, today, things probably look differently than the day you started your company. Your niche, the marketplace, number of employees, profit margins and client load has likely changed no matter how long you have been in business. Regularly revising your plan will help you know where to focus your growth and provide a roadmap to carry it out. 
• Don’t Fear the Pivot: Perhaps you have discovered that the initial construction services your company offered are no longer a good fit for the current marketplace, or you have found a niche that is a better fit. If so, consider whether it is time to make a change. A well thought out pivot may accelerate your growth.
• Review Your Accounting: Assuring the integrity of the nuts and bolts that make up your business processes is as important as guaranteeing the durability of the construction work you do. you Review your accounting procedures and methods to make sure they meet the best practices. Having an intuitive and professional accounting process means your financial information is in proper order, organized for when tax season arrives or when you apply for bonds, loans and more.  
• Watch Your Cash Flow: Balancing expenses with cash on hand keeps a  business profitable and growing. This can be particularly challenging in construction where payments are often delayed and margins are tight. Your method of billing and delivering fast and accurate construction estimates can help keep the balance in check. Learn more about ways to reevaluate how you are securing your cash flow in this Guide to Construction Billing Methods. Read tips on How to Price Construction Jobs to stay competitive and profitable. 
• Have a Legal Team Available: Business ownership and construction requires navigating many laws and potential liabilities that can significantly impact a business. Make sure you have professional legal advice to consult proactively and to have on hand for when you need it.
• Diversify your Supply Chain: One of the hardest lessons of the pandemic was how dramatically supply chain breaks disrupted construction projects. Even as delays in materials and products have lessened, reviewing your pool of suppliers regularly with an eye toward expanding helps assure projects are completed on time, and can save money. Having just a handful of suppliers is okay when just starting out, but as you grow and take on bigger projects, a more diverse supply chain becomes a must. 
• Stay Ahead of Industry Trends: Knowing the latest and greatest in what the construction industry offers and what clients are seeking, provides new opportunities and niches. It also gives customers the confidence that you are a leader in the field. Technology and sustainability are perhaps the two fastest changing building trends. Learn more with our Guide to Sustainability in Construction and our Guide to Technology in Construction.
• Invest in the Right Software: Staying on top of technology in construction also means adopting the right high tech tools to run your company. Business management software helps every aspect of a company operate more efficiently especially as it scales and grows. That means higher profitability and return on your investment in software.

Here are some must-haves to consider when choosing a software:

• Mobile App: Being able to work and communicate from anywhere is as important to you and your team, as it is to your clients. Make sure the software you choose is compatible with your mobile devices so you are never slowed down by location.
• Fast Takeoffs & Estimating: Delivering estimates quickly and accurately gives businesses a competitive advantage in winning jobs. Find a software that lets you easily do takeoffs and send estimates on time. 
• Cloud-Based Collaboration: The ability to work from anywhere also means having an easy way to coordinate and collaborate with your team, subs, clients and more. A high quality construction management software includes cloud-based collaboration features.
• Design-Visualization Tools: The closer construction plans are to resembling real life the more clients can see - and be excited about - what their project will look like when it's completed. Software with visualization tools like 3D Floor Plans make that life-like imagery happen. 
• Integration with Other Tools: Make sure the software you purchase plays well with others, integrating with other important tools essential to your business success such as QuickBooks.

Grow Less Painfully

Scaling a construction business is hard work and can bring some challenges along the way. However, it is also rewarding and exciting to lead a company to become more successful and profitable year after year. Following the tips covered in this article can help make the rewarding days more frequent than the challenging ones. 

Learn more about how software eases the pain of growing and running a construction business. Start a free trial of Houzz Pro’s construction management software and explore our construction lead generation services too.