Almost all construction business owners want to grow their business in order to improve revenue and profit. Since many construction companies operate on contracts or even as a seasonal business, owners are eager to find ways to improve revenue during slow periods or the off season. To solve this problem, you may need to grow your customer base or the amount your existing customers spend. This may require you to expand your small business into other services. These tested ideas may offer you the key to leveling our revenues and eventually growing profits.
- Turn your construction company into a 12-month business
In northern climates, you may only have eight or nine months a year when you can focus on your main services. You should know that many construction companies have learned to keep crews working and profits rolling in by expanding their services to meet wintertime demands. Some cold-weather services may fit very naturally into your company.
A few examples of cold-season services to consider include snow removal, installation of holiday lights and inside building rehabilitation. One idea that’s been growing in popularity has been offering home-energy audits, adding extra insulation and providing other services that helps customers reduce power bills. The same customers that you work with in warmer months probably need at least some of these services during the winter too.
- Fine-tune your marketing plan.
You might begin to develop a marketing plan that includes attracting more customers, enticing those customers to spend more on additional services, retaining them for future work and, of course, letting their friends know about the good job that you have done. For example, you might setup a referral program. You could also consider services that you could add that would be natural upsells for the good work you already perform.
If your marketing plan hasn’t worked as well as you hoped it would, you should probably also take a hard look at which lead sources haven’t really been worth the effort or money. If you aren’t sure, you might benefit from a marketing consultant who can help you understand how much you spend to attract and keep customers.
- Refine your online business.
You might not think that your construction business has much to do with the internet; however, thinking like that could limit your opportunities. Both consumers and business clients search online for service providers and partners. Make sure your business website looks professional and works well on mobile devices. You might also consider adding your company to social networks that are likely to attract local customers.
Also, some construction company have used their knowledge of sourcing supplies and tools to setup an online store that offers quality products to consumers. You could consider marketing your business website and your online store by producing some how-to videos that you could distribute on social networks, YouTube and your own site. You can attract interested people by sharing your knowledge, but you know, that some percentage of them will decide they’d rather have your company do the work. If they don’t, they may still decide to buy supplies or tools from you.
- Consider ways to add equipment to diversify.
Some additional services may not require expensive equipment. For instance, you may be able to use the same machines that you use to move dirt to help you move snow. If you do get a request for work that falls outside of your current equipment, you may consider leasing that equipment at an affordable monthly rate.
This will give your crews a chance to gain experience and training with new equipment. It will also give you an opportunity to test the new service to decide if it is something you want to invest in. Your company might not be suited to every construction service. Very often, it will be hard for you to know unless you run a real-world test first. If you decide you’d rather focus on other areas, you won’t have risked much to learn a valuable lesson.
- Think about expanding through acquisition.
If you’re thinking about expanding your operations into more services, you have probably already considered the cost of training or hiring employees and acquiring different equipment. If you believe your current customers may be open to these new services, the task of marketing might not be that overwhelming. You probably already know your customers; you just don’t have ready access to the right people or tools.
One way to expand without having to start from scratch is to simply acquire a smaller business that already focuses on the new line of business. If they already have trained people, machinery and possibly even a customer base, you might find out that absorbing another business is faster and simpler than trying to begin from the ground up.
Why work to expand your construction business?
Most small business owners operate by the old saying that if they’re not growing, they’re stagnating. In addition, having the ability to smooth out gaps in revenue will make it much easier to manage cash flow. If your construction business experiences gaps in income during the winter or between contracts, expansion into other services may provide a profitable solution.