Growing From Operational
Resources And Strategies To Successfully Expand Your Masonry Business
There is a lot that goes into starting and managing a successful masonry business. It’s not easy. It requires considerable financial investment, equipment, patience, intuition, timing, and the right team. But once the business is operational, the result is rewarding and well worth the effort.
Once your masonry business has been active and stable for a few years, it might be time to think about the next steps. With any business, there should be realistic expectations, goals, and a budget to take the business through the natural stages of growth and expansion.
Before you begin the process of growing a masonry business, a business plan and strategy need to be established that outlines the process, steps, goals, and desired conclusion. In order to achieve a successful outcome and maintain a smooth, sustainable, risk-free transition, it’s necessary to understand the availability and implementation of business best practices, industry resources, and strategies.
“Growing the business and taking something very small and making it something a lot larger today is a lot of work,” said Ron Adams, President of Cascade Masonry. “It also has allowed me to employ many people and empower a lot of people through that feed a lot of families.”
By arming your masonry organization and your construction team with an ironclad approach, you set yourself up for success and reduce the chance of encountering obstacles or roadblocks that might lead to ineffective results.
Money rules momentum. To move your business forward and increase profit, both actual and potential, you need to have the money to do so. Securing the funds necessary to expand and grow your business is possible through different strategies, resources, and assistance.
One of the first ways to foster business growth is by reinvesting profits back into the company. By taking the net profits, or income left over after paying operating costs and overhead expenses, you can fund activities, equipment, and education. With strategic business activities, new equipment, and a skilled workforce, you invest in the longevity of your masonry company and its ability to adapt and expand further into the future.
When putting profits back into the masonry business, it’s always a good idea to focus on areas that will reap the highest return on your investment.
Part of the profits should be invested back into the business to upgrade industrial equipment, improve production facilities, and adopt new technology and software. This will maintain job site safety, increase the value of your masonry business with shareholders and customers, and help secure outside capital from investors and lenders.
Investing in employees is an investment in your masonry business’s future. Offering apprenticeship programs, certification, and credentialing opportunities, and continuing education initiatives increase the quality, range, and skill of your construction workforce. This in turn will offer greater opportunity to take on larger construction projects and bid on more specialized contracts.
“You have to have a good apprenticeship program. You have to train your staff that you find,” Adams said. “Sometimes you can find an outside person and bring him in. And sometimes, you need to train from within.”
Employees who possess in-demand construction skills in sought-after industrial niches and markets will set your masonry business apart from competitors. Not only will this increase the value of your business, but also lead to repeat customers and referrals.
Business profits can also help expand the organization’s administrative and executive team. Marketing experts, sales managers, and accounting professionals free up your time to focus on something else like business development or cultivating new services. In the long run, your business will achieve goals and milestones much faster and efficiently. By outsourcing certain functions and roles, you achieve greater results and superior quality.
Marketing and promoting your masonry services will help develop the brand behind the business. Driving awareness of what your business offers and why generate loyalty with existing customers while tapping into undiscovered marketings, audiences, and potential clients.
Cash is Critical
Business loans and lines of credit are sometimes unavoidable. These types of financing options can be helpful for expanding business operations, adding new masonry services, hiring essential workers, increasing the frequency of construction projects, and accepting larger jobs.
When deciding to go with a business loan, banks aren’t the only option. A number of online lenders offer short-term business loans at attractive interest rates. The approval process can be quick and terms can range anywhere from 6 months to 24 months. Most lenders, whether it’s a bank, credit union, or online lender, can help create a personalized lending package that meets your masonry business needs.
Beyond business loans and lines of credit, another way to receive financial backing is through business grants. There are thousands of grants available online (http://www.grants.gov) designed to help small businesses. This comprehensive database supported by the federal government offers an endless selection of financial assistance to small businesses.
Know Your Numbers
In managing your masonry business you should know and understand how much money is being spent and how much revenue is brought in to cover expenses. Increasing business profits starts with knowing how much revenue is necessary to cover fixed costs or overhead costs. In one survey, only about 30 percent of business contractors know this number (https://www.constructionbusinessowner.com/business-management/9-numbers-you-need-keep-your-company-profitable).
To begin keeping track of overhead costs, calculate what you think the business will need over the next year to remain operational. Each month, track overhead costs so actual costs don’t exceed the overhead budget.
At the beginning of the year, set a goal for a return on annual overhead. For subcontractors, an accurate target for a pre-tax net profit return on annual overhead expenses should be around 25 to 40 percent. For general contractors, that target should be around 25 to 50 percent.
Another important number is the value of your masonry business. Every business owner should aspire to increase the net profit of the business. Equity or net worth is the actual value of the business, not including intrinsic value. To determine this, calculate the total assets minus total liabilities. Setting a goal of 15 percent return on total equity or investment is a good place to start.
Along with knowing overhead costs, returns, sales numbers, net profit, and other key operational figures, you need to be able to set specific profit goals and targets. Pre-tax profit needs to be high enough to compensate for the risk.
Working with your team at the start of each year, you can outline targets for gross profit and net profit. Start by looking at the business equity or net worth. Review projected overhead for the coming year. Conclude what risk is associated with operating the business. Determine the amount of net profit the business should make in total dollars. Then track this each month.
A great investment in yourself and your business is a business advisor or a business coach who has experience starting, managing, and expanding business entities. Educational classes are widely available online for little or no cost. These are a great investment in your business understanding and the future of your business.
It’s also wise to connect with industry organizations and experts like your local masonry organization or business groups.
None of us are ever going to lay the first brick or block. So, we have to learn from people that have already done it right,” said Adams. “Being part of the association MCA or local chapters of MCA, or local trade association groups and things like that allow you to connect with like-minded people and be successful.”
Ready To Expand
Once the masonry business has acquired financial backing, successfully sets goals for generating a profit and managing overhead, it’s time to establish the specific strategies for growing the business.
A clear path to evolve from a small business to a medium-size business is by adding new services. Start by looking at the market sector for the service you want to offer. What is the demand? Who is the competition?
“If you're looking just to grow your market share, make sure that you grow your market share profitably,” said Adams. “So that you have the money to expand and to buy the tools, equipment, hire additional overhead staff, or office staff that you need to be able to function at the bigger size.”
Timing your business growth strategy is also essential. Don’t decide to expand your business when the economy is down. Wait until the economy is robust and job growth is strong. The business’s employees also should be built up and ready to take on new growth, responsibilities, and challenges.
When the construction industry is slow, municipal projects continue. So educate yourself and your employees on how to build custom bids for larger projects. Look for local projects focused on building parks, roadways, or other city and government projects. This can be lucrative for your business and grow profits sustainably and considerably.
“Grow slowly and skillfully,” Adams said. “So don't overextend yourself.”
Promoting Your Products
If nobody knows about your business, they will never be able to patronize it. New clients will never find you. Marketing your business and promoting its services has become much more advanced. Today, much of the operational functions of business are coordinated online in a digital world. This includes finding new clients and nurturing relationships with existing clients.
Start developing your online business identity with a website. This is the first and most important place people go to find you, learn more about you, contact you, and make a purchase.
Start with a free website on GoDaddy or some other Domain Name Server (DNS). Or if you want to make your website look a little more professional, choose a website builder with customizable templates.
Wix, Weebly, and Squarespace are three prominent services to cost-effectively host your domain and quickly build a website. They feature drag-and-drop elements like creating pages, adding photos, integrating contact forms, and a lot more.
When you finish a construction project, ask clients to submit a review on Google, Facebook, or Yelp. Or ask them for 10 minutes of their time to record a Zoom video testimonial.
To put your business in front of new audiences, create a business profile on Facebook, Instagram, YouTube, and LinkedIn. Create a monthly content calendar where you post once or twice a week.
Consistency is critical, so pick a day and time that works best for your schedule. If you just don’t have the time, sign up for a scheduling service like Buffer or HubSpot. A free option is available that lets you schedule social media posts in advance.
Stay connected with clients by using email. Send a simple one-page newsletter with the latest company updates, industry news, and helpful tips. Mailchimp and HubSpot both have free versions of email marketing services.
The best way to reach hundreds of prospective clients and generate the greatest impact on profits is through video content. A 30-second video that explains the history of the business, its services, and its mission to clients can lead to overnight success.
Remember Your Reasons
Starting a business can be rewarding. There are enormous benefits to being your own boss, putting your passion into place, creating opportunities for others, and developing your community. But oftentimes what is more rewarding is taking what you have created and growing it into something meaningful.
Anybody can start a business. While doing so requires persistence, ingenuity, and hard work, it can be done. But growing a business successfully so that it affects a greater sphere of customers, influence, and profitability is not so easily said and done.
With the right resources, tools, knowledge, team, and attitude, the future of your masonry business has no limits.
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