• Construction Industry Growth: Estimated 4.5% growth between 2020-2025, even after the pandemic construction industry hit.
• US Market Expansion: The US construction market is set to grow by one trillion dollars from 2020-2023. The UK is on track to for USD 386.36 billion by the end of 2023.
• Small to Medium Business Transition: Steps to transition from a small to medium-sized construction company.
• Networking Strategies: Importance of networking in construction, including tips and methods.
• Business Planning: Revisiting and adapting your business plan for growth, competitor analysis, and pricing strategies.

The construction industry is competitive but also an area of growth. Between 2020 and 2025, there is an estimated growth of 4.5% – which might not sound like a lot. However, if you consider that there was a halt put on all building projects for between 2-3 years, the bounceback from that is sharp. 

With the global construction industry back in full swing, the US market alone is expected to grow by one trillion dollars between 2020 and 2023 (Statista). There has never been a better time than to look for sustainable business growth. 

Transforming your company from a small to a medium is not the smallest of undertakings, and many moving parts need to be taken into consideration. 

What is the difference between a small and medium company?

While the exact definitions can vary slightly based on location, some defining factors make a business either small, medium or large. 

Most often, it comes down to the size of the employee pool. In the United Kingdom, a Small business is considered to have a turnover of less than £10 million and less than 50 (1-49) employees. A Medium business has less than 50-249 employees and a revenue of less than £50 million. 

The scope between the two is substantiation when looking at revenue alone. There is also the micro business, which has less than £2 million in revenue and fewer than ten employees. 

For those who are hoping to move from micro to small or small to medium, the same steps can be followed to get there. 

Employees

The first step to growing into a medium-sized business is expanding your team. With the team expanded, you can take on larger projects, and an increased revenue will follow. Although many companies wait for the revenue to be increased, then hire. 

Going with a people-first approach will allow you to also look at your current team. You can highlight skill gaps (and put the right people on courses), remove those not working with your vision and hire the right people. 

Your current long-term team might be on a permanent full-time basis, but as you expand your workforce, you can add different contract types. 

You can have a range of casual workers who get called in when the work increases, full-time contracts, part-time, apprenticeships and interns. Whatever works with your business. You might also opt for different pay rates and options like pro rata salary and flat day rates. 

Network 

How many of your previous clients have come through your network vs. how many you have pitched for without prior knowledge or recommendation? Networking in any business is essential. The point of networking is for your lead flow to be bigger.

Specific networking tips for the construction industry: 

• Join trade associations and unions.
• Head to tradeshows.
• Have stands at job fairs and recruitment fairs (particularly important to increase the construction workforce: East Midlands Homebuilder Champions Construction Careers Amid Major Labour Shortage)
• Have a social media profile (get creative with it).
• Make a point of networking on-site with owners or workers where you have the opportunity.
• Share your own connections where they are beneficial.

Revisit the plan

Your original business plan was written for the starting 18 months and beyond; they are great for tracking your progress and growth. They can also be rewritten because the objective now is to grow from small to medium. 

• Reassess what the values of your company are. 
• Drill down the core competencies and where those can be expanded.
• Look at the key hires you need to make.
• Use the forecast and actual figures to see what your future looks like.
• Competitor analysis for medium-sized construction companies
• Technology implementation/job management software

Selective 

Start making a point to bid only one job that is going to be profitable, not just fast and paid. One of the defining factors between smaller businesses and medium (or large) is the work that they take on. Typically, larger projects with more profits and a limit on the number of contracts that will be taken at the same time. 

Not only that, but they will lean into their core competencies too – i.e. more likely to be contacted for selective bidding or directly contacted for specific tasks. 

Online 

Construction companies should excel in local SEO. Even if the plan is to be national or global, work on local SEO with immediacy. Local SEO is powerful for construction companies because it increases awareness, traffic quality and organic traffic. Local businesses and people are looking for local companies and people for jobs like construction. 

A combination of a freelance writer or content company and a plan like this one: A Comprehensive Guide to Local SEO in 2023 can be a great start. It is also a good idea to ensure you have claimed your Google Business profile. 

Machinery and Equipment 

There are typically two options when it comes to construction companies and their machinery and equipment – one is that it is rented, and the other is that it is owned. Hiring can be a better financial decision during the growth period until the revenue has increased to the point where buying is a better choice. 

With hiring, you don’t need to cover high maintenance costs; you can select the right equipment for the jobs you’re bidding for, and there is increased safety (the vehicles and equipment are well-maintained). 

Increase Prices

The cost of materials increases yearly; recent figures suggest that over 80% of the construction materials used have increased by about 19% since 2020. While you might’ve adjusted the work and the final price – future planning means increasing costs enough to factor in future increases and remain comfortable and profitable. 

Your current price and future price should be reflective of your typical customers. 

There are plenty of opportunities that support the growth of small construction businesses for the next few years. Taking steps slowly will offer sustained growth. 

For construction business owners aiming to grow, the industry has exciting potential. Despite its challenges, there’s a projected 4.5% growth from 2020 to 2025, with the US market alone set to boom by a cool trillion by 2023.

Expand your team, network like a pro, and revisit your business plan. Tech and local SEO can be your most robust tools, and be smart about machinery rental or buying.