Business is busy, but companies still going bust.

The NZ Herald reported recently that despite construction being very busy, small to mid sized businesses in the industry are still going bust. In fact construction has overtaken food service as the number one business category for liquidations in the first two months of this year. This is one first place award that we should be proud of!

Should you be worried?  Probably. If not worried, you should at least be aware that things are not all glittering out there and you should look at reviewing your financial systems and your understanding of some key numbers. What you can measure, you can manage. What you can manage, you can change. Here are two key financial areas to monitor in your business.


What to write on your blog page

A good way to naturally rank higher on Google (everyone’s goal) is to ensure that your construction website blog has a good amount of useful information on it that Google recognises as helpful to potential customers. The problem is not many tradespeople are natural writers, or even know where to start. That blinking cursor in the top left hand corner of a blank screen can be a frustrating and scary thing.

As a residential construction company, there are several blog topics that you can write about to showcase your expertise and provide value to your readers. To help get those creative juices flowing here are some ideas:


How to develop a competitive advantage

A lot of people (including me) talk about competitive advantage and how it is vital to have one for the ongoing success of your business.  This is very true, but what is the BEST sort of competitive advantage to have?

In a highly competitive industry like construction, it can be challenging for small businesses to stand out and establish a competitive advantage. However, with the right strategies and mindset, a small construction company can gain a foothold in the market and develop a competitive edge that can help them thrive and grow. In this article, we will discuss some effective ways to develop a competitive advantage for a small construction company. Click on the article to read more


How to increase trust from your customers

Who has put hours of effort into pricing a job only to loose it to someone else that the client says “is a better fit”?  Everyone, right?  This can be even more frustrating if the other company has put in a higher bid!  Why didn’t you get the job?  Your price was competitive. You do quality work. You have the capacity to do it.  What it may come down to is that the prospective client didn’t TRUST you enough.

But you’re a trustworthy person!  Can’t they see that?  Well, possibly they can’t, or at least you didn’t do enough to build up that level of trust more than the other company did.  In the residential market in particular, building up the level of trust at the early stages of the sales process is vital to increasing your chances of securing a sale, without having to slash your price. With the country going into a period of economic and political uncertainty, consumers are going to be looking even harder for companies that give them a feeling of comfort and certainty.


The Importance of Back-Costing

Do you know what the actual gross margin you make from a job as soon as its finished, or for bigger jobs how you are tracking at each stage? Or are you so busy you just rush to the next job and hope the previous job delivers enough profit to stay in business?

Tracking how a job performs from a profit perspective compared to a quote or estimate is called back-costing, or job-costing as Americans call it, and is vital to maintaining a profitable company and to help you achieve your goals.


Improve efficiency with lean construction

In my mind sustainability is as much about economic survival and profitability as it is about our concern for the natural environment. Also, the two aspects of sustainability are not mutually exclusive and can lead to a win-win outcome.

One aspect of sustainability that you could consider is the adoption of Lean Construction principles. Lean theory has come from the manufacturing sector, most notably the car manufacturer Toyota. The Toyota Way was a movement that lead to the company becoming the most successful car manufacturer in the world and has been adopted and adapted by many companies in several industries since.

But building a car is not like building a house, I hear you say. You’re right. Many of the principles of Lean Manufacture need adapting for construction due to the different environment you work in and the bespoke nature of many projects. That said there are several fundamental principles that are used in Lean Construction which can help you improve both the environmental and economic sustainability of your business.


Is Job Management Software Needed?

I am always keen to see businesses become more efficient and for the owners of those businesses to use their time more effectively. Just like battery operated tools have largely replaced hand tools for many tasks, software has made similar progress in pushing out the paper and pen from pricing and managing jobs in the field. 

Granted it is easier to learn how to use a cordless screwdriver than a complex piece of software, but the longer term payoff in time saved and improved financial visibility into your business will make the journey worthwhile.  I recently did a Zoom interview with one of the team at Tradify and thought I would share an article from their site about the basics of job management software and some of its advantages. Here is the beginning of that article and a link at the bottom to read the balance….


Google to reward good content

If you rely on your website content (either via a blog or the core web page content) to help you rank on Google, you need to take notice of this major change in Google’s algorithm. The helpful content update will target websites that have a relatively high amount of unsatisfying or unhelpful content, where the content has been written for search engines rather than humans. This could mean those sites will rank lower in the Google search results that are served up to consumers using the Google search engine (which is most people on the planet!)

Google’s new helpful content update specifically targets “content that seems to have been primarily created for ranking well in search engines rather than to help or inform people.” 

The purpose of this algorithm update is to help searchers find “high-quality content,” Google said. Google wants to reward better and more useful content that was written for humans and to help users.


10 Steps to Develop Strong Core Values

Having the right culture in your company is vital to its success.  The culture that exists in a company can make or break it, so it is important to make sure the right one is proactively developed. Establishing an agreed set of Core Values is the best place to start.  By not taking a proactive approach the culture will simply evolve in a random way, usually by drifting towards whoever is making the most “noise” in the company.  If that person is a positive, uplifting type then you are lucky and the culture will generally be positive.  If, on the other hand the noisy one is a moaning, slack-arse, negative type, then you have a problem.  Other people will be dragged down to this level and the whole company culture will become negative.  You will end up loosing your best employees and retaining your worst.


Time to dust off the marketing playbook

While most construction businesses are still pretty busy and the runway of work ahead should see you into 2023 without too many issues, the longer term picture is looking a bit more fuzzy. It’s time to start reviewing what you are doing in the marketing and sales space and look to make some improvements.

There is a habit of many business owners in the trades to just take what the market dishes up and not put some proactive systems in place to generate work.  “I get all my work from word-of-mouth” is what I hear a lot.  That’s great when WoM is working, but what if it isn’t? What’s the back-up plan?  Usually there is none.  This is particularly true when the market is stronger and the perceived need to generate leads is less. With building consents running at record levels over the past year, you can understand why marketing has not been high on the priority list of most people. Inflation, Covid, supply lines and labour shortages have naturally dominated the headlines. A downturn in building activity however will naturally make some of those issues die away. The need to generate more leads and improve your conversion rate will start to sneak up on you if you don’t take proactive steps.