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12 Business Principles That Drive Contractor Success

Having worked with successful contractors over the years, WH&C has developed the following list for construction companies.  The list covers the top 12 basic business principles that we have found most successful contractors follow.

  1. Strategic Planning. The old maxim “if you fail to plan, you have planned to fail” is true. Plan for the success of your business by defining goals and objectives. The plan should clearly outline specific actions and next steps for achieving these goals.
  2. Develop Employees. Many construction companies are struggling to recruit and retain skilled workers. Especially since many of the construction workers who were laid-off during the recession left the industry. Are you regularly communicating with employees to understand what they want out of their career? Providing employees with development opportunities will advance their careers as well as your business.
  3. Planning is Key. Plan projects thoroughly, detail daily tasks, monthly goals, strategic goals for the company and a succession plan for the next generation of business owners.
  4. Track Your Costs. Keep costs up to date, including current and scheduled projects. Always know where you are in your budget and schedule on every job, every day. Stay on top of actual costs and cost-to-complete numbers. Become a budgeting expert.
  5. Client Service is #1. You may not have to go that far, but keep in mind that you are running a service business. Make sure you are meeting or exceeding your customers’ expectations. Keep them informed and understand their needs. Above all, when speaking with them, ensure they understand you and the status of the overall project.
  6. Market & Sell. Once you define the vision you have for your company, tell everyone involved. Check that employees market, sell and present a picture that fits in with your overall goals for the company. If you or your employees aren’t well training in marketing and selling, invest in training or hire a company to help you with these things.
  7. Safety First. Obviously, the safer you can work, the better and most cost-effectively you can work. Monitor job sites and employee procedures consistently. Find ways to reward safest work performance.
  8. Know the Contract. On a job-by-job basis, know your contractual obligations and communicate them to your team members. Have procedures in place for change orders, their pricing, the manner in which you communicate them to clients and the client approval process.
  9. Billing and Collection. Manage your accounts receivable by billing on time and collecting on time. Make sure that your bills are accurate and clear to the customer. Establish accounts receivable procedures and automate them. Know who is authorized to approve change orders and bill and collect them in a timely fashion. There are many options for more real time accounting information that make this easier, such as QuickBooks Online. Contact our office for more information on this.
  10. Work with the Best. Identify the suppliers, vendors and subcontractors you have worked with in the past to the best outcome, and work only with them. Pay on time and negotiate the best deals to secure early payment discounts.
  11. Instill a Culture of Accountability. Once you have established your plan for success, let everyone know their role; then, hold team members and yourself accountable. Be firm but reasonable, and lead by example.
  12. One of the best ways to guarantee the success of your company is to invest in the best training possible. Hire the best and give them the skills they need to succeed.