3 Common Ways Your Construction Business Can Lose Money

StrategyDriven Managing Your Business Article |Construction Business|3 Common Ways Your Construction Business Can Lose MoneyStarting a construction business is one of the oldest business ideas in the book. When done correctly, it can lead to lots of profits, helping you lay the foundations of a construction empire. Unfortunately, lots of small businesses in this sector struggle to generate profits year in year out. They keep losing money, and on further reflection, it’s easy to identify why this is the case.

If you currently own and operate a small construction company, here are three common ways you could be losing money right this second:

Poor supplier relationships

Construction businesses rely on suppliers to gain access to all the different raw materials and equipment needed to run the company. You can’t perform construction work without all of these things and there are various building company suppliers out there that provide them for you.

The problem is that you are choosing bad suppliers for your business, meaning you’re paying too much money for the goods. As a result, this whittles away at your bottom line, making it harder for you to make a profit. The solution? Find better suppliers at more affordable rates, lowering the cost of overheads.

On-site crime

That’s right, on-site crime is a genuine issue that affects construction companies and can mean you lose money. It can happen through employees or members of the general public stealing things from your site. What tends to happen is someone outside your business sneaks onto a construction site when you pack up for the day, looking to take things for free. This can include some of the supplies we were just talking about, meaning you have to spend more money replacing them.

This is actually a bigger problem than you think, but it can easily be addressed by improving the security on your site. Start by installing mobile construction site cameras to deter both employees and members of the public from stealing anything. Something simple like this can keep your supplies at their standard levels, saving money.

Construction site accidents

Finally, a lot of small companies lose money due to construction site accidents. An employee gets injured on the job, leading to disruptions. This has a two-fold effect on your financial situation as a business. Firstly, you need to cough up money for any medical bills your employee encounters, seeing as they were injured on the job and therefore you’re technically liable. If you don’t, they can sue you for more money anyway.

Secondly, it can delay your operations, meaning you might have to discount your service for not completing it on time. Or, you could get bad reviews from clients, making it harder to find more work and to make more money. As such, improving construction site safety needs to be a top priority to prevent your business from losing a lot of money.

As you can see, construction businesses can lose money in ways that you may never have thought about. If you find that your business struggles to make a profit, it could be down to one or all of these three issues.

Top Tips For Starting A Construction Business

StrategyDriven Starting Your Business Article | Top Tips For Starting A Construction BusinessStarting a construction company can be a smart move. There is always a need for skilled construction companies and it can be work that is incredibly rewarding and enjoyable, plus you will find that every project is different so it can be varied too. While there are many perks to starting a construction company, you will also find that it does pose a few challenges and it is quite different to starting a typical office-based business. With this in mind, read on for a few tips that will hopefully help you to hit the ground running and find success.

Secure Enough Funding

One of the biggest challenges for starting a construction company is securing enough funding. There are many startup and ongoing costs to cover, such as vehicles, equipment, staff, materials, marketing and insurance. You need to have a high-quality business plan in place, calculate your startup costs and then find ways to secure this funding. A few options for securing funding include:

  • Investors
  • Bank loans
  • Crowdfunding
  • Grants
  • Savings

Recruit The Right People

One of the biggest challenges when starting a construction company is recruiting the right people. Obviously, you want to find people that have the required skills and knowledge to take on different kinds of projects, but this is not the only consideration. You also need to make sure that you are recruiting people that will be a good fit, have a strong work ethic, good communication skills and the right personality for your business. Keep in mind that you can use training to bring people up to speed, so it is smart to focus on finding those that will be a good fit.

Rent Heavy-Duty Equipment

When you take on construction projects, you are likely to require heavy-duty equipment like cranes for lifting. You will find it best to rent this equipment from specialists, such as Birmingham crane hire companies that can provide you with industry-leading equipment for affordable prices. They will be able to make the best recommendations based on your needs and ensure that your projects go smoothly.

Create A Strong Online Presence

As with any industry, you need to have a strong presence online in order to win over potential clients and compete with other companies. You should invest in professional web design and digital marketing to create a strong presence for your brand and then use social media to promote your business, showcase your work and engage with potential customers. It is hard when getting started, but you need to build an online portfolio of your work that will help you to show your experience and what you are capable of.

Encourage Word-Of-Mouth Marketing

Word-of-mouth marketing remains hugely important when it comes to construction, so you need to encourage this within your network in order to find new opportunities. You will also find it helpful to network at every opportunity to build brand awareness and to form important connections that could lead to more work down the line.

Hopefully, these tips will come in useful and help you to find early success with your construction business.