Many restoration companies are seeing fewer opportunities due to the pandemic, but the competition is as stiff as ever. Moreover, the prices of building materials considerably increased in 2020, and this trend is likely to continue this year.
These factors can eat into your profit margin, but you can’t control them. What you can do is focus on improving the resilience of your business, delivering quality work, reducing costs, and growing your operations in spite of all the challenges.
Track Costs, Organize Records, and Manage for Profitability
To improve profitability, first, you need to improve the way you manage projects and organize your records. You can’t increase your profit margin without keeping track of costs, change orders, customer information, and insurance claims.
Payment issues are rampant in the construction industry, so you need to make an effort to avoid getting paid late or not getting paid at all. When one single restoration project is made of multiple contracts, their hierarchical payment structure can cause issues.
Use all the tools you have at your disposal to track costs and to document material management. You can send a preliminary notice early on in the project to protect lien rights. This will also help ensure you get paid on time.
Changes to the original plan are common when it comes to longer projects. Before you start doing any extra work, first you should get the client’s approval, agree on a price, and put everything on paper.
If you need help with staying on top of cash flow, invoicing, and factoring in overhead costs, hiring an accountant might be the right call (if you have room in your payroll). To make sure the next time is smoother, the accountant can take a look at your actual costs versus your estimates.
One study found that the US construction industry spends more than $177 billion every year on fixing construction errors. Rework is one of the priciest issues that restoration businesses can face. Unsurprisingly, the same study blames poor project information and miscommunication for half of all rework on job sites.
Poor communication between the field and back office is often the main reason many projects turn bad. Throughout the length of the project, stakeholders should communicate with each other.
Tools such as CompanyCam can help you keep the whole team on the same page. It allows your team to document problems that arise on the site, such as a broken pipe. They can also use it to send photos to you when they need your approval for replacement parts.
Moreover, by using tools like CompanyCam, you can improve your communication while reducing the need for late-stage changes. You can prevent projects from falling behind with this type of communication pipeline in place.
Nurture Your Leadership Skills
So that everything will run smoothly and efficiently, you need to demonstrate strong leadership. It’s impossible to have a unified team without clear direction.
Many leaders become overburdened with administrative and managerial functions of their role. It’s important to lead effectively. Become a better leader by delegating tasks and empowering your employees.
For instance, employees are often unable to finish a task on time because they are waiting for their boss’s approval. To avoid fostering a culture of inaction and self-doubt, leaders must motivate and inspire their employees to take ownership. Praise them for taking action and encourage them to suggest their own ideas. A good leader empowers employees and gives them the self-confidence they need to act on their own.
Another way to become a better leader is to focus on improving soft skills such as conflict-resolution, priority management, listening, and emotional intelligence. In order to become a better leader, you can also undergo leadership training.
Invest in Your Employees
You can improve your business by training your employees, while hiring the right talent. If you want to create a cohesive workforce, start with cross-departmental training.
Most teams are not natural collaborators. It’s important to give every employee an opportunity to learn about other parts of the business. Some initiatives can fall through if you don’t develop a structure that connects teams.
For instance, a marketing team will struggle improving the company brand if they aren’t consulting the customer service or sales teams. On their own, the marketing team may not be able to fully understand the unique pain points of the customers. If they collaborate with other departments, and get insights, they will be more likely to create a message that will resonate.
To foster employee growth and development and improve employee retention, invest in practices, courses, and programs that will help your employees improve their soft skills as well as hard skills. As a leader, actively model this attitude of learning. Do your part. In a true learning culture, learning and behaving go hand in hand.
Step up Your Marketing
To get new leads and stay ahead of your competitors, you need to master search marketing. Customers are searching and researching companies online more than ever before. To make sure they will find your business, you want to be all over page one.
You need to optimize your Google my Business page in order to get there. Using PPC (pay-per-click) platforms such as Google AdWords can help you stay on top of search results.
Naturally, you can expect the searches for restoration services to skyrocket when there’s a natural disaster. You can set up paid ad campaigns that are specific to weather events.
Set aside a budget for geo-targeted ads that will show in the impacted area. If a flood or an earthquake strikes, you will be able to run these ads quickly.
As the restoration industry grows, competition develops, and budgets tighten, improving your business is non-negotiable. Tracking your costs and managing profitability ensures you get paid and get paid right! Improving communication, be it with clients or coworkers, directly influences the success of your work. Nurturing better leadership skills in-turn empowers employees to amount to great things. Invest in your employees– it establishes loyalty and solidifies standards within your business. And lastly, new leads will flow in once you’ve stepped up your marketing. These five steps are guaranteed to help improve your business.
Michael has been working in marketing for almost a decade and has worked with a huge range of clients, which has made him knowledgeable on many different subjects. He has recently rediscovered a passion for writing and hopes to make it a daily habit. You can read more of Michael’s work at Qeedle.
Check out Qeedle for more information: https://www.qeedle.com