Top 6 Mistakes Construction Companies Make

May 14th 2020

1. Operating without a business plan

A business plan outlines what your business goals are, and how you will achieve them. Without documenting your business plan, it is much harder to lead your business in the right direction because you have no foundation for how to achieve your objectives.

2. Not keeping up with your legal and tax obligations

It’s no secret that the construction industry typically has a lot of “red tape” in many countries, but keeping up with your legal and tax obligations is absolutely critical to ensure the continued success of your business. If you find yourself unsure that you’re meeting what is required, consider getting a lawyer and accountant to make sure you’re on top of your obligations.

3. Never learning to say no

When you’re a new construction company, you’ll typically say yes to any kind of work; it’s exciting to get your first few contracts, and those contracts can help you start getting the ball rolling on reliable cash flow. Although, as your business grows, you need to start learning how to turn down work. Not every contract is profitable, and time spent on a bad job could make you miss out on good opportunities that hold much better returns. 

Profitability is not the only reason to say no to a contract, if you are sacrificing your quality of work, reputation, mental health, or simply biting off more than you can chew, those are all viable reasons to politely turn down a contract.

Before you start any contract that comes your way, consider how it will help your business, and if the numbers don’t add up, give it a pass.

4. Keeping bad clients

On a similar note to the previous point, you need to learn when to drop bad clients. We all have that one client that’s a black hole of our time, energy, and money that we’ve had forever, maybe they were one of your first clients that you feel some modicum of loyalty towards, but it’s not sustainable to continue a relationship that hurts your business. Where possible, renegotiate, but if all else fails, it’s time to let them go.

5. Ignoring customer service

Referrals make up the majority of sales for construction companies, as it does most service-based businesses, and you don’t get referrals if your customers do not like you. Customer service doesn’t require you to be a pushover working for free, but it does require you to not cut corners, actively communicate, put a priority on quality and treat your customers with respect. By making sure you treat your customers right, they will treat you right by bringing in more work for business.

6. Avoiding digital technology

Technology has rapidly integrated with the construction industry, and those that ignore it will get left behind. With digital technology you can automate, optimize, and simplify your business processes; there are many ways you can integrate technology into your construction company, one way is by going paperless with a mobile data collection app.

A mobile data collection app replaces paper forms and checklists with a mobile app that makes it easy to enter data accurately, and easier to manage, promoting better productivity for your team. There are a variety of mobile data collection apps, most of them have a free version of trial so you can test that it meets your needs, such as Locale Central.

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