For a business to be successful, it needs to be able to balance and control expenditure to make sure it operates in the black. Set aside the companies that operate as ‘non-profit’ and we are left with the vast majority, businesses that are striving to maintain or increase their margin and make a profit. The building and construction industry is rapidly evolving and business owners who are prepared to take a (calculated) risk often find themselves on the right side of the profit line. On the other side are those that continue to employ the same strategy year in and year out, and sadly find themselves slowly falling behind the curve and drifting into difficulties.
This article is intended to give some guidance on 5 core strategies to keep you forging ahead in a competitive market.
As already highlighted, modern construction companies will need to not only embrace, but be a driver and promoter of change. Relying on the same projects, customers and partners may be comforting and generate a degree of repeat business but looking at new areas and utilising the (sometimes vast) resources at your disposal efficiently and effectively is going to be a true driver of profit. Your construction software can be of significant help in achieving this. BuildSmart, from CCS, is a great example of a modern tool that allows business owners to get the maximum benefit from all their resources, from personnel and raw materials right through to plant. BuildSmart ensures you can identify any under or over capacity and accurately highlight available resources at any point of time (including the future). This makes it the norm to multi task your resources across multiple projects and allow you to take on additional work. The level of automation and integration provided by modern construction software enables business owners and managers to focus on growth and diversification, as they are not hampered with the old day-to-day procedural and administrative constraints.
Bidding & Pricing
One of the most fundamental aspects of a successful end-to-end project is accurate estimation. Many articles discuss, in depth, the scope and application of estimation software such as Candy, and what it can do for your company. Again, direction can be taken from the industry leaders who have adopted the best software for the construction industry to drive maximum efficiency and accuracy in this area. Having absolute confidence and ‘n’th degree accuracy in estimations allows companies to be more aggressive in their pricing as they have far greater control on cost throughout the project. This cost control starts with ‘spot on’ estimations but is delivered throughout the project by fully integrated software that tracks the progress of the expenditure against cost and provides early warning of any discrepancy, over-run or variance.
3rd Party Management
Even the largest construction giants will use subcontractors and will, of course, need to use external suppliers. It would be churlish to point out that appointing the cheapest is rarely (if ever) the best solution in either the short or long term so managing the cost and delivery of the subcontracted work and supplies is extremely important to the bottom line and margin. As discussed in the previous section, CCS Complete Solution is able to integrate all aspects of the project from start to finish which includes subcontractors and materials. Part of the unique and most valuable proposition is in managing these external aspects as part of the overall process in terms of reporting and monitoring progress, resource management, cost and delivery. Ensuring that material costs are maintained (or even off-set) when market prices shift, allows the business to adapt and avoid over-runs. At the same time, the software is busy tracking and reporting on sub-contractor progress and resource utilisation which further drives maximum effectiveness and project efficiency.
Cut Out the Freebies
It is not uncommon for certain aspects of a project to be changed ‘en-route’. This might be in terms of simple changes to interior finishing or even significant changes to specification, layout or even additional floors. It is almost as common that the customer would like these to be carried out free of any additional charge which some companies have accepted (at times to their extreme detriment). Having the right construction specific tools and software will enable you to quickly and accurately assess the cost of any alterations and to be able to quantify it in terms of both cost and time. Having this information allows the business owners and project managers to make an informed decision on whether such amendments can be absorbed or whether they will have a significant impact on the cost and the delivery.
Be the Partner of Choice
Fortunately, the modern construction industry does understand value over being the cheapest and lessons learned have helped promote quality. That being said, there will always be those projects where the only consideration is cost but would any respectable construction professional really want to be any part of those?
By using modern tools and managing your projects to deliver on time and on budget, you can set yourself apart and above the rest of pack. The building and construction market is extremely competitive and being confident that you will correctly bid, budget and price a project coupled with an unwavering ability to deliver on those promises will be at the core of your ongoing profitability and success.