Construction businesses build reputations around their ability to create strong, reliable structures that stand the test of time. However, according to the University of Tennessee, four years after initial launch, only 47 percent of U.S. construction companies are still operating. Though its work is solid, the industry itself is fragile, and something as minor as one bad customer experience can take down an entire firm.
Construction business owners are constantly assessing on-the-job risks, but it’s critical for them to keep an eye on the common issues that bankrupt their peers. Following are three tips for every construction executive to help manage risks large and small.
1. Analyze and manage company growth at every stage
Sometimes, a firm’s first project is a major business deal. The cash flow kicks off the company’s development on a high note, and employees and managers alike feel like the sky is the limit. However, when that project wraps up, or a series of projects with that customer comes to an end, profits become tight and the company needs to make serious cuts.
From day one, construction executives need to carefully plan budgets, project cash flow numbers, track monthly spending, and manage customer invoices and payments. Without a system for monitoring and planning this information, some companies are destined for disorganization right out of the gate. On the other hand, solutions like accounting software and monthly sales reports can help make sense of data and define business metrics that lay the foundation for smart, long-term business decisions.
2. Make it simple for customers and employees to have personalized, informed interactions
Customer loyalty is a major key to any successful organization, and it takes a top-notch team to help foster positive, ongoing customer relationships. Managers should ensure their employees have access to updated training resources and technology tools that make customer service a breeze. For example, a centralized database that tracks customer and partner information can help every employee understand the complexity of individual customer histories, preferences and questions. With this information at hand, workers can tailor customer interactions, quickly reference details for particular projects and encourage repeat business.
3. Never put project management on the back burner
Running a business can be hectic. When a company is managing multiple projects and clients at once, it can feel like there’s no time to step back and analyze details about project timelines, resource distribution and one-off client requests. However, these elements can quickly add up, and every missed deadline can eventually lead to an unsatisfied customer.
Customer relationship management (CRM) tools can give business owners visibility into ongoing projects, deadlines, resources, budgets, warning signs and more. With the proper systems in place, managers, employees and projects can easily remain on the same page, all while planning for the future. And with a CRM system tracking every detail, construction managers have more time to engage with customers and employees, gaining insights into ways they can improve processes and projects in the future.
With the right technology on its side, there’s no reason for any new construction business to become yet another statistic. By following these tips, managers can help steer their organizations through initial growth and prepare for continued success in the future.