Second Attempt for Heritage-Listed City Tattersalls Club
Old Building Materials Find a New Life
Melbourne's Superhighway Gets Green Light
GBK 2018: Construction in the Land of Fire and Ice
How Winning an Award Can Win You Business
Saving Endangered Eagles Through Smart Technology
A Bright Future for Fishermans Bend
AIA Winners Come in all Shapes and Sizes
By Duane Craig
July 1, 2018
A small construction business can still stay profitable if it doesn't grow. Sole proprietorships and partnerships don't have to cater to the needs of stockholders, leaving them wide latitude in how they manage their businesses. But, many small construction business owners feel the pressure to grow their companies constantly. Here's what is often behind that, and some valid reasons for limiting growth.
Understanding Growth Pressure Points
When you're successful at marketing your construction services and delivering them to your clients' satisfaction, you'll get more calls for more work. The trades and general contractors you work with will refer you to people looking for your type of services. Those you work with will also ask you to join them on the new projects they're bidding on. All this new work usually means you'll have to grow the business to meet the new demands.
You might also feel the need to grow your business just because everyone you deal with is running on the fast track. But, if you want to blow off the pressure, just step back and take stock of why you started the business in the first place. With a little exploration, you might discover good reasons for staying small.
In theory, the smaller the business, the less time you will have to devote to it. Of course, if you're terrible at managing your business and your time, no amount of smallness will make up for it. This, in itself, is a good indicator for not growing your business. Failing at small almost certainly means failing at big.
Nevertheless, let’s assume you're good at managing your time, and you have a good business acumen. You'll still find that if you keep your business small, you'll have more time for other things you like to do. Maybe you have plenty of personal construction projects you want to tackle, such as renovating your own home. Or, maybe there's a hobby you like almost as much as you like building. It could be you'd just love to have more time for family and friends. All of that is possible with a well-run small business that simply stays right-sized.
Doing What You Like To Do
Many construction business owners started their businesses out of the need to have more control over what they do, and how they do it. Often, they were working for someone else and then decided to go out on their own. Most times, they have particular building skills. A carpenter might aspire to finish carpentry while someone who's good at figuring out systems decides to get into plumbing. When you start your business based on your skills and technical abilities, you do so because that's your passion.
There are countless small construction business owners who regret expanding to the point where they no longer get to do the work. Maybe that is not always so true for the more physically demanding trades like concrete and drywall, but even there you'll find people who wish they hadn't grown so big that they're off the front lines.
If you really enjoy the work, putting things together, trying out new tools, figuring out how to improve processes and looking back at the end of the day to see all that you’ve accomplished right there in glorious 3D, then staying small is likely a course for you.
But How To…First, Stay Relevant
If you're going to stay small, you've got to mitigate some risks. The first risk is becoming obsolete. Smallness often means sameness, and sameness often ignores the reality of change. Change is happening all the time, so if you stay the same for too long, it's likely change will overtake you. Suddenly, you won't be needed anymore. So as you stay small, don't fall into the trap of staying the same. Try new methods. Stay up-to-date on new trends. Consider how you can change time-worn processes to make the work easier or quicker. First, you become the expert, and then you must stay the expert at what you do.
Next Stay Diverse
If you depend on just one client, you are risking your future on them. Even if they've been in business for 100 years, they will respond to change to survive. When they do, you might not be relevant to them anymore. If you serve a broad consumer base, then you're in a safer territory. On the other hand, if you work with just one or two general contractors, you're in a pretty risky position. If you're a general contractor and serve just one developer, corporate client, or architect, you've in the same boat.
A big part of managing a successful business entails managing your customer base. You should always have an eye out for new customers or clients who complement your style and offer the types of projects where you excel.
So, stay small, or not? The choice really is all yours.
If you liked this article, here are a few eBooks and webinars you may enjoy:
Master Your Budget, Protect Your Profit Margins
Ten Questions. Ten Answers. Millions of Dollars at Stake
Increasing Labor Productivity with Data
Growing Your Construction Business with QuickBooks
If only there was a go-to template or formula you could follow in order to guarantee success in the bidding process. Long story short, there is no one right answer or solution. However, that doesn’... Read More
Hear Brad Hyatt, Associate Professor at California State University Fresno, discuss what students are learning in school to prepare them for const... Read More
Budget. Schedule. Quality. The trifecta of a project. But balancing that trifecta isn't easy to do. Our webinar, led by construction industry exper... Read More
Building in the "Big Easy" sometimes isn't. The challenges faced by Landis Construction aren't often understood by out-of-towners, because when it'... Read More
When Nancy Novak was a young girl, she would often accompany her father, a construction superintendent, to his job sites. Those visits sparked her ... Read More
Depending on your role in construction, you might feel as though you don't have a personal life. However, there are strategies you can use to impro... Read More
As more states approve marijuana businesses operating within their borders, there is a growing cadre of contractors finding regular work serving th... Read More