11 Proven Strategies to Grow Your Small Construction Business

Discover 11 proven strategies to grow your construction business. From effective business planning and business development to innovative technology and quality management, learn how to thrive in today's competitive construction industry.

Kyle Ferguson
July 23, 2024
6 min

Growing a small construction business is tough. You're juggling projects, managing crews, and trying to stand out in a crowded market, and it's easy to feel stuck.

Most construction business owners are stuck working in their business instead of on their business. They run around to job sites, jump in to finish up projects, do all of the sales themselves, estimate projects, and perform the 20 other tasks it takes to run a business.

But here's the thing: with the right strategies and action steps, you can break through those barriers and start scaling a construction business that could potentially run without you.

In this article, we'll dive into 11 proven steps to grow your construction company - from developing a clear plan to embracing innovation.

These aren't just generic tips. They're actionable, industry-specific strategies that have helped countless small construction businesses thrive. So, if you're ready to level up your company, keep reading.

11 Proven Strategies to Grow Your Small Construction Business

  • Implement these six strategies to drive growth and success in your small construction business
  • Focus on planning, relationships, marketing, quality, technology, and diversification
  • Unlock new opportunities and increase your competitive edge in the industry

Develop a Clear Business Plan and Growth Strategy

A well-defined business plan is the foundation for your construction company's growth. Start by clearly identifying your target market – the specific types of clients or projects you want to focus on. This could be based on factors such as project size, location, or specialization (e.g., residential, commercial, or industrial). Next, determine your unique selling proposition (USP) – what sets your business apart from competitors? This might include your expertise, your team,  strong base of subcontractors, unique processes, quality of work, customer service, or innovative solutions.

Incorporate financial projections into your plan, outlining expected revenue, expenses, and profitability over the next 1-5 years. Set SMART goals (Specific, Measurable, Achievable, Relevant, and Time-bound) to guide your growth efforts. For example, "Increase revenue by 20% within the next 12 months by securing five new commercial projects." Regularly review your plan and adjust as needed based on market conditions, industry trends, and your business's performance.

Action Steps:

  1. Define your target market and USP
  2. Create financial projections and set SMART goals
  3. Review and update your plan quarterly

Focus on Building Strong Relationships and Networking

In the construction industry, relationships are key to unlocking growth opportunities. T grow your business, you must develop strong relationships with potential clients, subcontractors, suppliers, and teammates. 

Attend relevant industry events like trade shows, conferences, and seminars to connect with potential clients, partners, and suppliers. Join trade associations and local business groups to expand your network and stay informed about industry developments.

Look for collaboration opportunities with complementary businesses, such as architects, engineers, and suppliers. These partnerships can lead to referrals, joint projects, and valuable insights. Consider seeking mentorship from experienced construction professionals who have successfully grown their businesses. They can provide guidance, advice, and connections to help you navigate challenges and seize opportunities.

Action Steps:

  1. Identify and attend key industry events
  2. Join relevant trade associations and business groups
  3. Reach out to potential collaborators and mentors

Invest in Marketing and Branding to Expand Your Construction Company

To attract new clients and grow your business, you must invest in marketing and branding efforts. Start by creating a professional website that showcases your portfolio, services, and client testimonials. Use high-quality images and engaging content to demonstrate your expertise and value proposition. Optimize your website for search engines (SEO) to improve visibility in online searches. Either learn how to do it yourself or invest in hiring experts. 

Leverage social media platforms, such as LinkedIn, Facebook, and Instagram, to engage with potential clients and showcase your work. Share project updates, industry insights, and behind-the-scenes content to build trust and credibility. 

Consider implementing targeted advertising campaigns, such as Google Ads or Facebook Ads, to reach your ideal customers based on their interests, location, and other demographics. If your going to do this, you will likely want to hire a construction marketing agency. 

If your in commercial construction, hire a construction sales rep to build lists of the companies that you want to work with, research and find key contacts at these companies using databases like ZoomInfo and then reach out to them via phone call and email to learn more about their upcoming projects. 

For a full list of ideas for marketing your construction company, visit our blog 21 Marketing Ideas for Construction Companies in 2024: The Ultimate Guide

Action Steps:

  • Develop a professional website with portfolio and testimonials
  • Create and maintain active social media profiles
  • Implement targeted advertising campaigns

Prioritize Quality and Customer Satisfaction

In the construction industry, reputation is everything. You must consistently deliver high-quality work and exceptional customer service to grow your business. Nothing will grow your business more than repeat business and word of mouth; this is how you get that. Implement strict quality control measures, such as regular inspections, checklists, and training, to ensure your team meets the highest standards. Establish clear communication channels with clients to inform them and promptly address any concerns.

Seek feedback from clients through informal conversations, project reviews, and surveys. Use this feedback to identify areas for improvement and showcase positive testimonials in your marketing materials. Go above and beyond to exceed client expectations, such as completing projects ahead of schedule or offering additional value-added services. You'll build a loyal client base by prioritizing quality and customer satisfaction and generating positive word-of-mouth referrals.

Bonus Tip: When you win your first job with a client, send them a thoughtful gift and write them a handwritten thank you letter for the chance to work with them.

Action Steps:

  • a

Build the Right Team of Employees and Crews of Subcontractors

Your employees are your most valuable asset, and investing in their development is essential for the success of your construction business. Provide ongoing training and professional development opportunities to help your team acquire new skills, stay up-to-date with industry trends, and advance their careers.

Foster a positive company culture that values collaboration, safety, and excellence. Encourage open communication, recognize and reward outstanding performance, and create a supportive work environment that promotes employee well-being and job satisfaction. When your team feels valued and engaged, they are more likely to deliver high-quality work and contribute to the overall success of your business.

Implement competitive compensation and benefits packages to attract and retain top talent. This may include offering health insurance, retirement plans, paid time off, and performance bonuses.

Recruiting the right people is worth putting the tiAssess and optimize your operations regularlye into, and if you can’t put the time in yourself, you should invest in a construction recruiter. Construction recruiters actively reach out to potential employees instead of waiting for them to apply for your job. Once you have high quality candidates applying, make sure to plan comprehensive interviews and background checks to ensure you’re bringing on board reliable and competent team members.

Similarly, create a strong base of subcontractors by building relationships with those who have proven their reliability and quality of work. Maintain a list of trusted subcontractors and continually seek new ones. For more on hiring subcontractors, read our blog here: Hiring Subcontractors: The Easy Guide.

Action Steps:

  • Hire skilled employees that align with your values and culture
  • Conduct thorough interviews and background checks
  • Build and maintain a list of reliable subcontractors
  • Network and reach out to potential subcontractors for collaborations

Scalable Systems and Processes

As your construction business grows, it's crucial to have scalable systems and processes in place to support your expanding operations. Document and standardize key processes, such as estimating, project management, and quality control, to ensure consistency and efficiency across all projects.

Invest in scalable technology infrastructure, such as cloud-based software and mobile devices, to streamline communication, collaboration, and data management. Cloud-based project management software, such as Procore or Buildertrend, can help you centralize project information, track progress, and manage resources more effectively.

Regularly assess and optimize your operations to identify bottlenecks and inefficiencies. This may involve conducting process audits, analyzing data, and seeking feedback from your team and clients. By continuously improving your systems and processes, you can enhance productivity, reduce waste, and position your business for sustainable growth.

Action Steps:

  • Document and standardize key processes
  • Invest in scalable technology infrastructure
  • Regularly assess and optimize operations

Strong Financial Management and Planning

Effective financial management is the cornerstone of a thriving construction business. Developing and maintaining accurate financial projections, budgets, and cash flow forecasts is essential for making informed decisions and ensuring the long-term viability of your company. Monitoring your financials, cash flow, and profitability project by project is especially important.

Implement effective cost control measures and regularly monitor job costs to identify areas where you can improve efficiency and profitability. This includes tracking labor, material, equipment, and overhead expenses. By closely monitoring these factors, you can make data-driven decisions to increase profit.

Establishing relationships with financial institutions and exploring financing options for growth is another crucial aspect of financial management. Access to the right financing can help you take on larger projects, invest in new equipment, and expand your workforce. Starting a relationship with your local bank is a great place to start.

Action Steps:

  • Develop and maintain accurate financial projections and budgets
  • Monitor financials, cash flow, and profitability project by project
  • Implement cost control measures and track job costs
  • Establish relationships with financial institutions

Continuous Improvement and Adaptability

The construction industry is constantly evolving, and successful businesses must be willing to adapt and continuously improve their operations. Stay informed about industry trends, new technologies, and best practices by attending conferences, participating in training programs, and engaging with industry associations.

Encourage a culture of innovation and continuous improvement within your organization. Empower your team to share ideas, suggest process improvements, and take ownership of their work. Regularly solicit feedback from clients, employees, and partners to identify areas for growth and development.

Embrace change and be open to new opportunities and challenges. This may involve expanding into new markets, offering new services, or adopting new technologies. By staying agile and adaptable, you can position your construction business for long-term success in an ever-changing industry.

Action Steps:

  • Stay informed about industry trends and best practices
  • Encourage a culture of innovation and continuous improvement
  • Solicit feedback from clients, employees, and partners
  • Embrace change and be open to new opportunities and challenges

Embrace Technology and Innovation for Increased Efficiency

To remain competitive and grow your construction business, embrace technology and innovation. Not only adopting new technology but also challenging “the old way of doing things.” It's a mindset. Adopt construction management software to streamline project planning, scheduling, and communication. Platforms like Procore, Buildertrend, or CoConstruct can help you manage budgets, documents, and teams in one centralized location, improving efficiency and collaboration. Instead of your project managers and staff spending hours discussing projects and relaying information to each other, they can track it all in these project management platforms.

Tools like PlanSwift and Bluebeam Revu streamline the estimating process by providing accurate material and labor cost projections, reducing errors, and saving time. Building Information Modeling (BIM) software, such as Autodesk Revit, enhances visualization, coordination, and planning with detailed 3D models. Additionally, staying on top of emerging trends like pre-fabrication and robotics is crucial, as these technologies become increasingly relevant. Attend industry conferences or workshops to learn about the latest technologies and best practices.

Action Steps:

  • Research and adopt relevant construction management software
  • Invest in modern equipment and tools
  • Explore innovative construction methods and technologies

Diversify Your Service Offerings and Revenue Streams

Consider new service offerings and revenue streams to mitigate risk and unlock new growth opportunities. Identify new markets or niches that align with your expertise and resources. For example, if you specialize in residential construction, consider expanding into the growing sustainable or green building practices market. Or if you are doing Hotels, consider moving into doing multfamily or vice versa. 

Offer complementary services that add value for your clients and differentiate your business from competitors. This could include design services, material selection, and procurement, or project consulting. Explore opportunities for recurring revenue streams, such as long-term maintenance contracts or retainer agreements, which provide a predictable income base and strengthen client relationships through more consistent service. 

Action Steps:

  • Identify new markets or niches to explore
  • Develop complementary service offerings
  • Pursue recurring revenue opportunities

By implementing these six proven strategies – developing a clear plan, building strong relationships, investing in marketing, prioritizing quality, embracing technology, and diversifying your offerings – you can successfully grow your small construction business. Remember to continuously assess and adapt your approach based on market conditions, client feedback, and your own business goals.

Implement Effective Construction Business Development 

Word-of-mouth marketing is one of the most powerful tools for growing a small construction business. According to a study by the Nielsen Company, 92% of consumers trust recommendations from friends and family more than any other form of advertising. Encourage your satisfied clients to refer your business to their network by providing exceptional service and quality workmanship. Implement a referral incentive program to reward clients for successful referrals with discounts, gift cards, or a percentage of the referred project's value. 

Establishing strategic partnerships and alliances with other businesses in the construction industry can help you expand your reach and capabilities. Partner with suppliers, manufacturers, or other contractors to cross-promote services and gain access to new clients. Collaborate with architects, designers, or real estate agents, who often have networks of property owners and developers requiring construction services. Building strong relationships with these partners positions your business as a trusted and reliable contractor. 

Building lists of people you want to network with, such as potential clients or partners, is essential for effective business development. Use databases like ZoomInfo or Apollo to find contact information. Reach out to these individuals via email or phone, introducing your company and expressing your interest in working together. Personalize your communications to make a strong impression and foster valuable relationships. 

Engaging in community outreach and philanthropy is an excellent way to increase your brand visibility and build goodwill in your local area. Sponsor local events, sports teams, or charitable organizations to demonstrate your commitment to the community. Participate in community service projects or pro bono work to showcase your skills and expertise. Share your community involvement on your website and social media channels to further increase your brand's visibility and build trust with potential clients.

Action Steps:

  • Encourage satisfied clients to refer your business and implement a referral incentive program.
  • Partner with suppliers, manufacturers, and other contractors to expand your reach.
  • Collaborate with architects, designers, and real estate agents for new projects.
  • Build networking lists using databases like ZoomInfo or Apollo and reach out to potential clients and partners.
  • Sponsor local events and participate in community service projects to increase brand visibility.

Growing Your Construction Business: The Path to Success

By implementing these 11 effective strategies, you can set your small construction business on the path to sustainable growth and success. Developing a clear business plan, building strong relationships, investing in marketing, prioritizing quality, embracing technology, diversifying your services, maintaining a skilled workforce, implementing scalable systems, managing finances effectively, fostering continuous improvement, and leveraging business development tips are all essential components of a thriving construction company.

Remember that growth is a continuous process that requires dedication, adaptability, and a willingness to learn from both successes and challenges. Stay focused on your goals, remain open to new opportunities, and always prioritize the needs of your clients and team members.

Are you ready to take your construction business to the next level? Start by reviewing your current business plan and identifying areas where you can implement these growth strategies. Break down your goals into actionable steps and set realistic timelines for each milestone. With a clear plan and a commitment to excellence, you can build a construction business that not only survives but thrives in today's competitive market.

Understanding Your Market

The success of any startup relies heavily on understanding the market it operates in and identifying the ideal customers within that market. Understanding your customer and becoming a subject matter expert is key, especially at the formidable stages.

By having insight into potential customers, you know what problems you should be solving with your product and how to communicate in a way that appeals to them.

The market is the broader industry that you serve. The ideal customer dives deeper into who your product is the best fit to serve. It's a way to segment your customers.

You might not know who your product best serves yet, and that is okay, but it's important to hypothesize and test who is.

Make some assumptions about what would make a customer a good fit for your product and test those assumptions otherwise, use your current customer base and data to guide you.

Here are some of the key steps to understanding your market and identifying your ideal customers:

Understanding Your Market

1. Research industry trends and news: Stay updated on current and emerging trends in your industry. Search Google news, read articles and follow the right people on social media to gain insights into customer preferences and potential opportunities.

Learn How To 2X your Construction Sales This Year

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