If you’re in the building industry, then we have excellent news for you. Recent statistics show that housing demands are on the rise, with expenditure expecting to hit $900 billion this year. Analysts expect positive employment gains, better finances, and attractive interest rates to push more buyers into the market.
Due to this massive increase, builders are having a difficult time keeping up with demand. Needless to say, prospects are frustrated by this issue.
That’s good news for you.
If you were thinking about expanding your small building company, then this is an excellent opportunity to achieve the growth you set for your business.
Here are four key steps you should take to make your building business profitable.
1. Seek New Sources of Finance
If anything, small businesses excel at doing their job with little resources. However, the cash flow pressure is always there, especially if customers are late with their payments. Not to mention, it’s not quite comfortable trying to make suppliers to understand your situation and agree with more lenient credit terms.
Expansion plans need steady cash flow to support it. If you already scramble for resources, then what you have might not be enough to sustain growth. You must look for new ways to attract more funding, such as accessing a line of credit, an overdraft protection or bonding or a bank loan.
Before you start looking for new sources of finances, you need to ensure that you have a good profit margin. Implement spending control solutions to gain better command over your employees’ expenses and make the most of your existing resource.
After you made sure that your business can sustain a loan, create a portfolio with documents describing your company, your strengths, financial situation, growth plans, and accomplishments. Include recommendations from builder’s associations, data about other builders in your market, and insurance information. Present this portfolio to financial institutions you hope to support you. Just remember to choose the provider carefully.
2. Think Twice before Spending Money
You must be extremely careful about how you spend your money while implementing your growth plan. Before taking any action, think about how it will affect your cash flow. Remember, you need good cash flow to cover the overhead costs you’ve committed to already.
If you decide to raise the spending with overhead, then you should research the new market first to see if there’s enough demand to cover it. Also, make sure you know how much a new project will cost you before accepting it.
Try to be as accurate as possible when estimating the cost of materials and labor for a project. Don’t add a significantly higher profit margin to the expenses of completing the job. Although most prospects tend to believe higher prices come with the better quality of service and materials, anything too pricey will only deter your plans. Therefore, try to seek a balance.
When you’re reaching out to new customers, don’t forget the old ones either, as they may be sensitive to your price alterations. Don’t forget about their needs and look for solutions to increase prices that satisfy all of your target audience.
3. Offer Stellar Customer Service
Nowadays, it’s imperative for businesses to provide exceptional customer experience. Happy clients equal profit, especially for builders since houses are not something you can try, buy and return 30 days later.
One of the best ways to market your small business in the building industry is to have clients do the marketing for you. If they are satisfied with what you delivered, they will continue to purchase from you and also refer you to their acquaintances.
It’s five times cheaper to retain a current client than attract a new one, so make sure to offer top notch customer service. Have a well-trained team ready to answer their demands. That will help build stronger relations with them, increase customer loyalty and gather feedback which you can later use to improve or design new products/services.
4. Enhance Your Marketing Efforts
If marketing wasn’t a priority until now, you can’t oversee it from hereafter.
As far as offline tactics are concerned, participate in industry-related events. Give your employees branded shirts, mugs, pens, etc. They’ll likely use them outside of work too. Go to industry-related events and give away promotional products.
When it comes to your online presence, make sure to build a professional website where prospects can learn more about your services. Be active on social media; answer people’s questions and comments and genuinely engage with them. Register your business in relevant business directories and on review platforms.
As mentioned before, referrals work great with this market, so build a referral program where you offer incentives to existing customers who recommend your services to potential clients.
With an efficient and focused marketing strategy, you can easily achieve a steady growth.
Growing a business can be a tedious process. You need to be persistent, patient, and mostly very careful. Focus on things that support growth, like engaging with new clients and keeping your current ones happy, optimize your financial management, secure sufficient funds and make correct estimations, and you’ll surely see results.