491: What Sets Your Construction Company Apart

This Podcast Is Episode Number 491, And It's About What Sets Your Construction Company Apart Let me start by saying it's good if you have competition. Indeed, competition pushes you to be innovative. It also means there's an established community for your services. If no one else is offering the service, there's a chance there's no market for it.   But, have you always wondered how a small construction company like yours could stand out from the crowd and its competitors? Awareness of what others in your industry have developed and provided leads to a newfound motivation and belief in making an impactful difference, whether within your company or your community.     The key to benefitting from the competition is knowing how to take on competitors. You measure your share in the particular segment you operate in and obsess about your immediate competition, just as contractors who did not market effectively did years ago.   But first, you need to step back and ask yourself these three key questions and make sure you answer them in a way that will define and liberate your construction company at the same time. Ask Yourself: What am I offering? New construction, remodeling, or service and repair? Who is my competition? DIY, other contractors, money homeowners for a construction project? What is my fundamental competency - Residential, Commercial, or both? Challenging yourself is the key to answering these questions. Write your answers on paper or computer, sleep on them and then revisit them again and again until you get to the truth. Define The Type Of Contracting You Offer And Who Is Your Competition Be that homeowner doing a weekend project, Handyman Contractors, Remodel Contractors, Trade Contractors, and other contractors and House Builders. It may not be the same form, structure, and category that you operate. For example, Home Depot does not see itself competing in the building supply business but for a share of the home and commercial remodel and repair market. This approach and behavior across the organization, too, saw themselves as fighting for a share of the building supply market. Getting The Leads And Doing The Work Is Only Part Of The Answer Not answering them and acting on the knowledge is one reason many construction companies shrivel and die. They focus on the wrong areas to innovate or improve. They focus on the wrong enemy and threat. As a result, they miss what they could be doing to succeed and prosper over time. Here are three ways your small construction company can establish itself from competitors and stand out from the crowd: 1. Concentrate, then generate. What separates wealthy contractors from poor contractors? They concentrate then generate. Returning to the critical questions at the start, successful contractors know what type of contracting they are good at. SWOT Analysis is one tool used in strategic planning for construction companies to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in determining the particular target market. Concentrate Strengths - are projects that your construction company does exceptionally well and earns a higher than average gross margin that gives you an advantage over other contractors. What are they, and how can your construction contracting company expand on them? Weaknesses - are projects your construction company does poorly at and breaks even or loses money. What are they, and how can your construction contracting company turn them into strengths? Opportunities - are projects and markets not currently being served where your construction company can enter and turn them into strengths. Have you considered tapping into the "work-from-home" market during this time? Or commercial establishments looking to remodel to implement a better floor plan? Threats - are elements outside your construction company that could cause trouble for you or your construction projects. What are they, and how can your construction contracting company turn them into opportunities? A SWOT analysis will help you identify each of these characteristics for your business to understand better what you're doing well, what you could improve, and which external factors could affect your business. Generate Marketing is a science, not an art. Now that you've analyzed your SWOT, you laid the foundation by having a vision for what your Construction Company will be when you finish building it, you know who you are, and you know who your prime client is. You can quickly generate more leads than you can handle. 2. Give the client what they want and deliver an excellent service. There's room enough in most industries for competition. While it's a good idea to know who you're against, your clients are your priority. Focus your efforts on providing goods and services meaningful to them, addressing their pain points, and improving their lives. Market yourself to make those aspects clear. Show them why you're the ideal company to hire for their project.   Large businesses have weaknesses. The bigger they are, the less personalized and responsive their service is. They market themselves to a broader audience and have to bring in more clients to cover their costs because their overhead is higher.  In this respect, your size is an advantage. Fewer customers mean more personal service. That opportunity for relationship building will entice customers looking for extra attention.   Examine what people love about your competitors but also what frustrates them. Build your construction business to address those gaps. If you find that something isn't working with your customers early on, don't be afraid to shift. Be innovative in responding to market changes and client demands. You'll have an easier time making that change early than once you're more fully established.  3. Put together a stellar team. It is one thing to be a carpenter, plumber, electrician, framer, drywaller, painter, or any other master crafts person and quite another thing to own a construction company that performs those things while managing a business. Many small contractors have friends in the same trade and work well. Remember that being on your own is okay because employees are not required to succeed in this industry. You could also work well with a group of Trade Contractors and complete the work seamlessly as a team effort. On the other hand, you could be a one-person remodeler who may have unknowingly built a team by working with highly-skilled professionals. For instance, the person who did your company logo or the banker who helped you set up a business bank account—outsourcing a specialist to help you with the things you are not an expert on - like a Website/Social Media Manager to take care of your online presence does wonder for your Marketing without needing to hire in-house staff and do their payroll. Of course, a financial advisor or a construction accountant who has been where you want to go and can guide you will benefit your construction business. Optimize your time and skills by doing what you love and do best, and outsource the rest to operate better and grow your construction company. Final thoughts We are big fans of optimizing instead of maximizing. We've developed strategies that take the least amount of effort in the least amount of time possible. By taking advantage of existing knowledge from your competitors, you can improve and build upon these as they are relevant for you and your type of construction business. Knowing that you're different from what's already out there and why you are different makes you attractive to your target market. Be the contractor who will do whatever it takes to rise above owning a job and develop a construction business that will provide for themselves and their families for a lifetime. About The Author: Sharie DeHart, QPA, is the co-founder of Business Consulting And Accounting in Lynnwood, Washington. She is the leading expert in managing outsourced construction bookkeeping and accounting services companies and cash management accounting for small construction companies across the USA. She encourages Contractors and Construction Company Owners to stay current on their tax obligations and offers insights on managing the remaining cash flow to operate and grow their construction company sales and profits to put more money in the bank. Call 1-800-361-1770 or [email protected]