Like type-cast actors who always end up playing the same roles, contractors get caught in circles doing the same old projects over and over again. Often they got into these project types to get their businesses started. A few years down the road, they’re still buried in these marginal projects that do nothing for their company goals, with no time to pursue the work they really want.
Here are six strategies to breaking out:
1. Write/Refresh Your Business Goals
A business without goals wanders in any direction the wind blows. One month, you’re working commercial, and the next, you’re doing residential work. Or your first three projects of the year are design-bid-build, and then, all of a sudden, you’re a construction manager at risk. Meanwhile, profits suffer because you are constantly adjusting your operations to accommodate new types of work and delivery methods.
Businesses without goals also face long-term problems. You might have always assumed your company would continue as a family firm once you retire, but one look at the numbers tells you right away, it’s not realistic. Perhaps you’ve always thought your company would grow into a regional firm, and yet you lack the right people with the right experience.
Many people don’t plan. That is very common in small construction companies. So if you want to get beyond mediocre projects, plan to do so. That begins with defining your business goals for the year and for each five-year period. Without goals, your company’s future is up in the air.
2. Prepare Your People
Your employees must fit with your plans. Some might need to advance into supervisory positions; others might need to reskill. Get them ready by working with them to map their careers and then prepare them for their future roles.
If your move to projects that fit your business goals will mean expanding the business, carefully consider your key managers and supervisors. You should especially focus on the person or people who will fill in for you if you can’t work and who will need to shoulder larger shares of company responsibilities. When you have a strong leadership team imbued with clear company goals, your business moves smoothly in the right direction.
3. Align With Partners That Support Your Goals
Consider your suppliers, subs, and other project partners with your short-term and long-term business goals in mind. Based on their performance and business trajectory today, will they still fit your business goals next year? In five years?
You might need to find and involve new partners that will support your long-term goals. Or, you might help your partners reach their goals so they will better support yours.
4. Set Up a Transition Period
Even though you’ve been working on mediocre jobs, they’ve been supporting you. Jumping ship overnight might leave you struggling for survival. Decide on a timeframe that’s reasonable for you to complete your transition to the work you want. Tailor your marketing and business preparations to meet your timeframe
5. Stop Marketing to the Wrong Markets
When deciding your business goals, you must have considered what markets you want to work in and decided to transition to new markets. With that information, you can now set up a marketing plan that considers your short-term and long-term goals.
If you’ve been marketing to consumers who want remodeling, but your goal is to switch to doing mostly commercial work, the sooner you market to your target, the sooner you’ll start landing those project types. Even without a portfolio showcasing the work you want to do, you can usually break in by promoting an aspect of your business that sets you apart from the competition. However, don’t use price as your differentiator because you’ll likely end up with the same mediocre projects from which you’re trying to move away.
6. Pursue The Right Projects; Transition from The Wrong Projects
This is the trickiest part of getting away from mediocre projects. The right projects are the types that support your long-term business goals, while the wrong ones make you feel stuck. When transitioning, it’s reasonable to assume you’ll face some short-term cash flow or budget issues.
Review your insurance and bonding to ensure they match the new projects you want to take on. Make friends with your bankers or other investors. Show them your plans and negotiate a line of credit you can use during your transition. You might have to put up buildings or equipment as collateral, so have a solid understanding of your assets and what you are risking.
You will always have business transitions as you build your business. With goals, a steady eye on your people and partners, and some careful planning, you can avoid getting stuck in a never-ending loop of mediocre projects.
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