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4 Ways to Improve Efficiency in Your Construction Business

In-office and on-site efficiency is what will make or lose you money on construction jobs. We have narrowed down to a few reasonable areas of improvement so that you can move through jobs faster, have a happier team and client list, and be more aware of your finances and goals.

Create clear and open lines of communication

You need to create professional and clear lines of communication with your partners and teams to establish an efficient workflow and process. Taking the time to implement a process, or utilizing software that can help you, will only act as a benefit to your company and employees.

Setting this up means that your employees or business partners need a specific location to update you on job progress, ask questions about site changes, and be able to receive immediate feedback from you or someone else with authority. A text thread, task management software, or other chat log would work. This will make your team less likely to sit around while they wait for instructions. Employees that are confident and equipped with the latest information can do their job more efficiently and effectively.

Communicate expectations and maintain touchpoints with clients

Staying in contact with clients should be a top priority, alongside quality project completion. This is easier said than done. Clients have the ability to alter schedules, change materials, increase or decrease budgets, and a variety of other potential roadblocks that can throw off your margin of profit. Establishing a professional and thorough communication system with clients can minimize the risk that changes occur in the future and it can set you up for success by instantly informing your team of changes that do occur.

Centralizing your client and employee communications can maximize the work your team is doing and allow you to do even more by removing the transfer time it takes to spread relevant information to your team.

Make your subcontractors feel like they are part of the team

Your subcontractors step in to help finish a job, but often don’t have much more insight than what general day to show up and what work they might be accomplishing. Whether you use software or go the extra mile to inform them, keep subcontractors in the loop will help remove a lot of the guesswork that they might be doing.

When they’re done with their tasks, they can reach back out to you and ensure it goes through your final review. Increasing the speed at which approvals or reworks can be done will help you see your money sooner.

Build a qualified and capable team

Hire qualified office staff

Having a qualified office staff is another great step towards creating an efficient and effective business. Your office employees can act as handlers, accountants, estimators, and coordinators. Many construction businesses see the owner acting as all of these back-office roles on their own, increasing their workload and ultimately keeping them away from their own home.

Investing in a quality office staff does increase expenses, but it will ultimately give the owner more time back to invest at home or other work ventures. These office staff could also increase the efficiency of your field workers, which saves everyone time and saves the business money.

Properly vet your production staff

Employers are often at the will of their employees and can be left with no source of income if an employee leaves, calls in sick, or decides not to work for the day. That is why investing in quality or up-and-coming field staff is essential to increasing your business efficiency.

Whether it be higher pay, hourly wages, benefits, and continual training, find what potential employees want and do your best to reasonably accommodate it. This will ultimately increase your expenses, but with happy, trustworthy, and hardworking employees beneath your roof, you will begin to complete jobs more quickly, retain satisfied customers, and increase the potential to earn more than you did before.

Invest and give further opportunity for training

Confidence in your team’s ability will increase your business’s efficiency. As your team learns to complete similar jobs, their time needed for completion will go down, even by a marginal amount. Investing in the continual training of your employees will only return benefits to you.

Let a rookie attend a job site where their only goal is to learn. Give an industry vet the time to host a training session on common job tactics. These can be small time slots that happen semi-frequently, but they could save you the cost of having untrained workers or no workers at all.

Schedule projects in advance

It can feel extremely overwhelming to wrap up a major project and begin planning for the next one. More often than not, you’ll be worrying about finishing a punch list, getting paid, and ensuring your customer is satisfied enough to let you move on. This leaves you with hardly any time to consider what might come next.

While it can be tempting to go all in on project completion, you need to set aside time to ensure you have a schedule to look forward to after your current project ends. Projects on your schedule and customers in the pipeline will help your efficiency with less downtime between jobs. You can work when you need to work and worry less about what might come next.

Set a clear financial goal

Setting a goal, no matter how broad or how detailed, will allow you to set markers to check your progress at any moment. These markers, even if they only show a positive or negative trajectory, can help you decide what to do next. This can give you critical insight into business decisions and processes so that you choose the most effective option every time.

Track your profit margin

For example, you want to participate in a remodel project where you are being hired directly by the property owner. With all of the numbers you currently have at your disposal, you can have a general understanding of your expenses during the project duration.

$50,000 = labor and materials with markup

Estimated project length: two months

Average monthly overhead: $2,000

50,000 + 2 Months (2,000) = $54,000 total project cost

Desired profit margin: 20%

X=our desired amount of profit

X/54,000 = 20/100 = 10,800 added to what you charge the customer to achieve your profit goal

$64,800 charged to customer to account for your expenses and profit

From here on out in the project, you need to be able to track your finances, change orders, schedule shifts, and everything else to see if it increases or decreases the likelihood of you hitting your intended profit margin. Knowing where you are at in relation to your goal can equip you to make the necessary choices to keep the project moving and profitable.

Investing in your business efficiency is worth it

Opening and maintaining proper avenues of communication, having a trustworthy and capable staff, building a continual training mindset, and setting obtainable schedules and financial goals will help keep your construction business efficient and making money.

Sam Reaves

Sam Reaves