Tips for better managing your construction business

Tips for better managing your construction business

Owning a construction company can be a lot of work. It can also be a very rewarding business to own. With the right project management, technology, and financial management, your construction business can not only be successful, but it can run more efficiently than you thought possible.

 

 

Here are some tips on how to set your business up for success.

Technology

As a business owner, you always should start by investing in technology. As we mentioned in our blog ‘Going Paperless’, there are numerous software programs on the market to help you with all areas of your construction company.

These programs can include estimating, scheduling and project management, right through to your bookkeeping and finances. These programs can not only simplify the work that your business is doing, but it can also increase the accuracy of the work you are doing.

In other words, technology is one of the first things that will put you on the road to better managing your construction business.

For example, using a program designed to estimate your projects can provide you with material take-offs.

Not only this, but it will also provide you with more accurate pricing so that you can present your bids not only with accuracy, but speed.

Project management programs can allow you to provide access to all of your team members, providing updates and increasing communication. All of these will help your projects run smoothly.

When looking at software programs for your bookkeeping, we would recommend that you meet with your bookkeeper or accountant so that you can discuss your options and determine which is the best software for your construction bookkeeping.

They will have the experience with different types of paperless accounting programs and can point you in the right direction.

Not only this, but they should also have some idea as to which will benefit your business the most.

Construction bookkeeping is unique, and you want to choose a paperless option that works best for your business. With job costing, as well as materials and labor needing to be taken into consideration for all of your projects, you will want to choose the program that best covers all of this for your business.

You may even decide to have your bookkeeper take care of most or all of the financial aspects of your business so that you can spend your time building your business. This is where you, as a business owner, need to decide where best to spend your money, as well as your time.

By using a software program that is specific to your industry, you can allow access to those that need to see various parts of the project. This can include subtrades and customers, allowing them access so that everyone is on the same page and avoiding problems down the road.

Remember, by using cloud-based programs, you are not only streamlining your processes, but you are keeping them accessible to everyone on the project.

Your team

As a business owner, you may think that you have to oversee absolutely everything in your business. To an extent you do, but perhaps only at a high level. By hiring the right people to work for you and to be part of your team, you should be able to delegate daily activities and responsibilities to them while you focus on growing your business.

As a business owner, you need to manage your team wisely. Sometimes overlooked but always important, is communication. Communication will not only help you manage your team, but it will help you while you are working with your customers.

When you create your project schedule, you will be able to provide ample notice to your team members so that they are aware of your expectations ahead of time. As well, using task lists and other software programs, everyone will know what they are doing. As a business owner, this is important.

While you are overseeing and growing your business, your bookkeeper can provide you with updates on your business finances through cloud-based programs. Depending on which software you have chosen, this may or may not be directly connected to the scheduling and estimating software. Either way, you are still able to easily access this vital member of your team.

Even if you have done all of the above and are running efficiently, it is still construction. This means that you need to be ready to adapt to changes at a moment’s notice.

If you are already in the construction industry, you know that changes can, and do happen. Even though you need to stay firm with your schedule and budget, you need to remember that changes will present themselves, and you will need to be flexible enough to work them into the project while avoiding delays and expenses. We won’t even mention the stretches of rain, or unexpected snow that can shut down Vancouver, like in 2020.

Again, even though you have planned ahead, you will still have a lot that you want to oversee. It is always important to prioritize and delegate work so that you can effectively manage your time.

Planning

When managing a construction business, it is important to plan ahead (with as much detail) as often as possible.

Right from the launch of your new project, you will be needing to review the plans and specs so that you fully understand the scope of the project.

Even if you have the latest software program for estimating your project, you will still need to study the plans and specs. This review process will provide you with the opportunity to find any potential problems, and possibly even correct them before they actually become problems.

Once you’ve fully evaluated your project, you can now start your project planning and scheduling. As a construction business owner, you know this doesn’t simply include ordering materials. This also includes lining up all of your resources, whether that be your team members, sub-trades, or equipment.

The further out that you can plan your project, the smoother the project will run.

An added bonus will be that your trades will be ready, especially since you have taken their schedules into consideration as well.

Budget accordingly

Like any successful project, you need to not only focus on timeline and resources, but also your budget.

The same can be said for managing your construction business.

Once you’ve created the budget for your construction project, you need to make sure that you are constantly reviewing it. This includes taking all of the expenses and invoices that are coming in and having them entered into your software program.

On any given project, there are numerous expenses that you will need to consider in order to ensure that the project is within your budget. This not only includes direct costs, but indirect costs such as overhead, that we mentioned in our blog ‘Bookkeeping tips for Construction companies’.

It is also important to stay on top of your cashflow, as this can be affected by a project. Have the conversation before you even start a job to find out what the customer is thinking as far as payments. If they are borrowing from a lender, the draws may be fewer with longer stretches of time in between.

Knowing this ahead of time will allow you to have conversations with your suppliers, subtrades, and your bookkeeper. Your bookkeeper can provide you with insight as to your cashflow, help you forecast, and can let you know to if you need to renegotiate terms so that you can still pay your bills on time.

Finally, having a software program that allows you to make change orders as well as getting them signed off on-site will also save you money. Sometimes change orders are missed or forgotten about if you can’t deal with them until you get back to the office. This is how you may end up with disagreements, possible scope creep due and potential delays in time.

Maintain good relationships

The construction industry may seem big, but it really is a small community, and the importance of relationships in managing your construction business cannot be understated.

It is not only important to maintain a good relationship with the team that you have created, but also with your suppliers, trades, municipalities and of course, your customer.

As referenced in our blog, ‘How to get your construction business ready for growth’, as a construction business owner you want to acquire and maintain great relationships in the community, so that you can continue to grow your business through your reputation.

As you allow technology to help you keep track of, and run your business, you also need to embrace it for marketing your business. Whether that be managing your website, social media accounts or helping you get noticed through search engine optimization (SEO), this is something to you need to keep in mind.

Staying up to date

Last but not least, stay up to date on your industry knowledge.

You’ll be surprised at how important it can be when managing a construction business to know what’s going on in certain (relevant) parts of the market.

This isn’t only staying on top of newer methods of construction or various materials, although that is important. After all, if you read the news and know that lumber prices in British Columbia or Vancouver are going to skyrocket, you’ll want to know ahead of time to make alternative plans.

You also want to stay on top of trends in your local industry.

Sticking with our example from Vancouver, let’s say that you see that private investment for commercial construction projects is on the rise. This could give you a hint that leaning more towards commercial developments in the future could help your business grow.

This is especially true where technology is involved. Every industry is evolving, and the construction industry is no different.

You can stay up to date on new technologies or software that can help you get an edge over competitors and better manage your construction business. It really wasn’t that many years ago that people had never heard of AI and Machine Learning and look how far that has propelled us.

Need help from an expert?

It’s always good to ask for help when organizing and running your own business. Let one of our experts at Valley Business Centre help. For over 30 years, Valley Business Centre has been providing comprehensive bookkeeping, payroll and tax services to our clients in Whistler, Squamish, the Sea to Sky Corridor and metro Vancouver B.C. areas. Valley Business Centre provides reliable and effective services to all clients.

Disclaimer

This article is written for informational purposes only. It is current at the date of posting and changes to laws and regulation may result in the information becoming outdated. It is not intended to provide legal, tax, or financial advice. It is recommended that readers get advice from a tax professional before making any final decisions.

 

Visited 604 Times, 1 Visit today
About admin information

Leave a Comment