IN THE KNOW —
Seven features of a successful building company
2
Pretty much everybody who starts out in business has a dream of one day owning a successful and profitable company that provides them with a comfortable and enjoyable life. Some builders achieve this, which is great, but many don’t. Many suffer a rollercoaster of emotions and financial results and seldom feel in control of their destiny. In my years of working with builders I have seen successful builders who still want to do better and struggling builders who just want to reach some stability. I have helped builders at both ends of the scale to move to a better place and over those years I have seen a pattern of where success comes from and how to assist in replicating it. Although there are many factors that go into growing a successful company, I have picked my top seven to feature in this article. Get these right and you are well on the way to achieving your dreams.
1
Have a plan and implement it It would be extremely unusual for you to start a building project without a set of plans to guide you in its construction. These plans are usually very comprehensive and come with a long list of specifications.
Confident, but not cocky Being in business, especially construction, is not for the faint hearted. It is a hard, risky business and sometimes hard, risky (but not too risky) decisions need to be made. Making those decisions and bringing people with you requires a level of confidence. Making no decision in a situation can often be worse, so the ability to gather the necessary information, seek others’ opinions and then make a decision is vital to keep your business moving forward. Having a plan with a clear vision and mission to guide you will also help. Part of the decision-making process is checking whether a particular decision will take you off course or help you to stay on course. Having the right level of confidence will help push back against overly demanding customers who are attempting to drive down your price and deny you a fair profit. You need to have the confidence to hold a sustainable price or walk away.
Why is it then that most people attempt to build their business with no plan? A business plan acts like a rudder on a ship. It helps to keep you on course for where you want to go, helps make minor course directions when external forces push you off your path and helps keep you away from dangers. But it can be confusing. Google “business plan template” and you receive about 1.5 billion results! Total overwhelm and most plans don’t suit your average Kiwi builder. That is why I typically use a simple one or two-page plan model for my clients. It provides the longer-term direction you need but is also useful in focusing on the short-term actions needed to make real progress. The best plans are useless however if they are consigned to the bottom draw and seldom, if ever, referred to. A plan won’t magically make your business grow by sitting in a drawer. It must be implemented, adjusted, actioned and updated on a weekly, quarterly and yearly basis. It should be a systematic process that ticks periodically, not just a one-off event that is then forgotten about.
A plan won’t magically make your business grow by sitting in a drawer.
But you need balance. Letting your ego get in the way can be as bad as being too meek and not making a decision. The best business owners I see are those who are confident, but not cocky. The sign of a good leader is someone who can park their ego, be more humble and seek the opinion of others. Someone who takes the blame on themselves when things go wrong and praises the team when things go right.
3
30
“Whether you think you can or think you can’t, you’re right”. – Henry Ford
Know your numbers
You cannot hope to keep a construction company on track for success unless you have a reasonable understanding of the key numbers in your business. As mentioned earlier construction is a hard, risky business. It is also rather “lumpy” in its cash flow and sometimes difficult to read what the underlying trends are. Because of these features it is even more important to develop a regular reporting process, so you are better able to take some corrective actions sooner when things are trending the wrong way. By the time your accountant gets round to completing your end-of-year accounts, it may be too late.
