Growth, Hints and tips
The mistakes you could be making in your construction business and how to avoid them
Posted on by Katie Hook
Estimated read time: 3 mins
Working in the construction industry, where projects move rapidly, you’ll be no stranger to juggling contracts. But is there anything you could be doing to win more business?
The days of cash-in-hand construction jobs are fast becoming a thing of the past and to secure contracts, particularly for commercial projects, you must uphold the highest professional standards. Positive online reviews and being a member of an industry body, like the Federation of Master Builders, reassures clients that you run a reputable business – though they count for little if your finances are not robust.
Building firms, like any other, rely on good cash flow to pay their workers and order materials. In most cases, this means having access to credit, whether it is a business account, with an overdraft, loan or credit card.
However, if your construction business has missed loan re-payments, filed its accounts late or racked up large debts, you may be refused credit or else offered loans with eye-watering interest rates.
Remember that poor finances are not always the result of mismanagement either. You may have been working on a building job that has fallen through and left you out of pocket, or simply inherited an accounting system that was not fit for purpose from a predecessor.
Luckily, you can still improve both your own and your business’ credit score and boost your chances of getting the best rates on loans. Simple steps, like filing your accounts on time and paying invoices promptly all help to increase your score, as will keeping on top of your debts. It’s also worth using a service, like Experian’s My Business Profile, to find out what your business’ credit score is and what you can do to improve it.
The information you get from this is not only helpful for your business – there’s every chance your clients will check the same information before taking you on. After all, they want a guarantee that you can complete the job without experiencing any cashflow problems that could end up holding up their construction project. If there are any doubts, there’s the possibility they’ll give the work to another firm, meaning you lose a valuable opportunity to grow your business.
Aside from finance, a few improvements could be just what you need to take your construction business to the next level. It’s easy to neglect marketing, however, a simple ‘off-the-peg’ website and social media profile require little outlay and are an effective way of reaching more customers. With this in mind, it’s also important to ensure you have a robust business plan (there are plenty of templates online), so you know exactly what you want to achieve and how you will do it. This is, of course, also essential if you want to secure the best loan deals.