For most general contractors, there are only two ways to grow a construction business: taking on bigger projects or taking on more projects. Both solutions involve working with additional subcontractors.
Working with more subcontractors requires employing more back-office staff to manage finances and projects, and to deal with the extra accounting. But hiring back-office workers limits revenue. Then there’s always the risk that you make a bad hire, a mistake that can cost you up to 30% of that employee’s annual salary — according to the US Department of Labor.
In this article, we highlight strategies for growing a construction business without needing to expand your back-office workforce. Let’s start with the most impactful strategy: getting the right software to handle key back-office tasks and improve operational efficiency.
Use Technology to Meet Back Office Requirements
Traditionally, the more subcontractors you work with, the more back-office support you need to manage those subcontractors — until now. Construction payment and automation software can provide the support needed to manage additional subcontractors, at a fraction of the cost required to hire back-office staff.
The right solution can automate tasks such as invoicing, processing and exchanging lien waivers, and document management. By leveraging these tools, contractors can optimize workflows and reduce their administrative burden. Payment application software also eliminates the need for manual data entry. This saves time and prevents common human errors, like mistyping, from entering the system. With fewer errors to deal with, it is significantly easier to reconcile accounts.
Manually managing and tracking payments is one of the major challenges facing construction companies. Late or inaccurate payments can delay projects, hinder cash flow, and prevent you from taking on new projects. Construction payment apps solve this challenge by providing a centralized platform where contractors can electronically create, submit, and track all payment applications.
By streamlining payment processes, contractors can improve financial management and mitigate payment disputes, leading to stronger relationships with clients and subcontractors. As the single source of truth for all project information, payment apps also enable contractors to effortlessly track project progress, an invaluable benefit for ensuring projects run smoothly.
This is good news for any construction company, let alone a business looking to expand. It means that your team can spend more of their time on the things that are important to the company, like pursuing new opportunities.
At GCPay, we offer payment application software that saves time and money. Check out our cost-benefit calculator to learn how much we can save your business.
How much time and money could GCPay be saving your business?
Build a Network of Reliable Subcontractors
Nearly everyone in construction has a horror story about working with an untrustworthy supplier or subcontractor. In an industry where your partners can make or break a project, reliable partnerships are critical to growing a construction business.
Not only are good partners more likely to complete projects on time and within budget, they are also more likely to work efficiently. A reliable subcontractor, for instance, will submit the correct paperwork with errors. The more efficient the subcontractor, the less work is required from you.
Once you have a stable of dependable partners in place, you can more easily expand your services without worrying about project quality and timelines. That said, building a network of reliable operators is difficult. You may find that the quality of a subcontractor’s work varies between projects. Or that subcontractors struggle with communication and paperwork, which can affect timelines.
Upfront work may be required to overcome these issues and create an optimal and mutually beneficial partnership.
Rework Your Business Plan
The complex, always-on nature of construction can force long-term strategic planning to take a back seat to more immediate concerns. Failing to update your strategy can hamper growth, especially as your business and the market have shifted since you first started.
Your business plan provides a roadmap for growth. Expanding your construction company, therefore, requires updating your business plan with details on the strategies needed to achieve your long-term objectives. A revised business plan will also help you reassess your target market, evaluate your competitive landscape, and identify opportunities.
Reworking your business plan can help you grow without making new hires by helping you:
● Optimize your business — while redeveloping your business plan, focus on identifying areas of inefficiency and implementing strategies to optimize operations. By streamlining processes, improving workflow, and eliminating bottlenecks, you can increase productivity without the immediate need for additional back-office staff.
● Adopt and leverage game-changing technology — a revised business plan should incorporate the adoption of construction management and automation tools that streamline project management, improve collaboration, and increase efficiency. Implementing such technology can help you automate manual tasks, reduce paperwork, and enhance communication, enabling your existing staff to handle larger workloads.
● Upskill your team — your business plan will help pinpoint skills gaps within your team. Instead of hiring employees to plug these gaps, consider investing in training and skill development programs for your existing staff. By enhancing their expertise and capabilities, you can empower them to take on additional responsibilities and handle more complex projects.
Ready, Set, Grow
Putting the right strategies and tools in place will help you manage more and bigger jobs, all without needing to make back-office hires. One of the most important steps to growing your construction business is to secure construction payment application software. Without this software, the extra administrative and accounting burden of working with additional subcontractors and suppliers could prove a roadblock to growth.
At GCPay, we provide a payment application solution that is purpose-built for general contractors. Designed with intimate knowledge of the back-office requirements of construction businesses, our platform fully automates the payment application process between general contractors and subcontractors.