A Contractor’s Playbook for Thriving in a Post-COVID-19 World
Although it may feel like we’re “done” with COVID-19, unfortunately, the latest stats show that we’re still in the thick of it. I’m sure you’ve seen the headlines this week, such as “Texas, Arizona, California report record-high increases in coronavirus cases” and “World sees highest daily increase in virus cases.” And construction isn’t immune. The industry has seen project delays, supply chain disruptions, and funding source tightening. In areas hardest hit by lockdown, such as New York, the industry experienced an 80% decline in worker hours. In fact, in a recent survey of over 800 firms, two-thirds are experiencing delays and disruptions due to shortage–with small firms being disproportionately affected by these delays than larger firms.
In short, the industry is reeling and the smallest firms have been the hardest hit, losing construction productivity on jobs they’ve won and seeing a huge decrease in profitability. While it may be good news that the industry is reopening, you can rest assured that the industry will never be the same again. Since so many contractors are struggling to remain profitable, we’ve put together a construction “playbook” to help contractors improve construction productivity, which in the long run will increase revenue and improve profitability in a post-COVID-19 world.
Business Productivity Tips
- Learn how to track and manage nine key numbers in your business to increase your overall construction profit margins. These numbers include profits, equity, overhead, sales, job costs, contracts, receivables, liability, and cashflow. The more you understand these numbers and track them, the better position you’ll be in to increase your overall profitability.
- Be more resourceful in terms of finding jobs to bid on by leveraging bidding sites for jobs in your region and subcontractor networks to help you source your teams once you do win the bid.
- Set up Hubspot CRM. CRM is short for Customer Relationship Management, but it’s really a tool to help you track sales, manage sales pipeline, and leverage customer insights to increase sales and grow revenue. Hubspot is not only free to get started, but was also built for small businesses. If Hubspot is still not in your price range, try ActiveCampaign or BenchmarkOne, which were both built for smaller businesses.
- Increase social media marketing on platforms like Facebook, Instagram, and LinkedIn, especially Facebook and LinkedIn Groups. Use smart jobsite technology to upload jobsite photos into a shared album to increase your firm’s reach and engagement. Social media is a primary way to find new business, so if you’re not currently investing is social media, you should start now.
- Leverage global freelancing platforms like Upwork to hire freelancers or agencies to automate your admin support, finance, lead generation, and basic sales and marketing tasks. With Upwork, you can leverage freelancers for small jobs or discover agencies that can partner with you for long term projects so you can scale your business at a fraction of the cost of hiring full-time employees.
- Set up Slack, GSuite Communities, or Microsoft Teams to improve communication across the company (instead of relying only on email). By improving communication, you’ll increase productivity and reduce costly errors that hurt your business’s bottom line.
Construction Productivity Tips
- Outsource construction estimates to construction estimating services such as 1build. Developing a detailed and accurate construction estimate or quantity takeoff can help you win more bids, effectively increasing your revenue, and also save you money by ensuring your project won’t incur cost overruns.
- Use an in-field project management and collaboration tool like Fieldwire or CMiC to improve construction productivity. These tools can help teams boost individual productivity, identify and address problems in real-time, reduce risk exposure, and enable consistent performance by regularly tracking progress.
- Leverage more robotics, drones, and smart jobsite technology. Drones in particular can save you money by eliminating problems before they happen through increased visibility and communication. By providing better site surveillance, drones can also speed up the time needed to fix errors, improving construction productivity. They also help you eliminate manual labor and improve site security.
- Offload some of your heavy equipment costs by renting the equipment from platforms like EquipmentShare. With rental sites in 35 cities across the country, EquipmentShare provides construction professionals with heavy equipment rental services no matter where they are located and includes Track technology to ensure contractors are getting the most from their equipment.
- Increase the use of prefabricated and/or modular elements in your projects by leveraging companies like Messer. The recent Construction SmartMarket Report by McGraw-Hill, which surveyed 800 architecture, contracting, and engineering firms, shows that prefabricated elements can decrease project schedules but up to 4 weeks, decrease budgets by 6% or more, and decrease waste by 5% or more.
- Offer prospects and customers construction financing via Hearth. With Hearth, you get paid upfront while your customer pays overtime. By giving your customer financing options, you’ll be able to win more projects and increase your profit margins.
At 1build, we know times are tough right now. Contractors, especially smaller firms, are seeing project delays, losing resources and funding, and experiencing project losses and decreased profit margins. As all experts attest, COVID-19 has changed the construction industry forever. We hope these 12 tips can help your business not just survive, but thrive in a Post-COVID-19 world.
Further Reading: A Contractor’s Guide to Increasing Your Construction Profit Margins
Do you have any tips to help contractors improvise their construction productivity? If so, please share them in the comments below.