Unforeseen growth can be both a blessing and a curse, and planned growth can be hard to execute. But whether the opportunity is expected or not, a solid growth plan is necessary to capitalize on the opening. And a good execution of that plan is also necessary, otherwise the plan remains only that, a plan. This article will provide a small outline of how small construction service business can plan, prepare and execute growth strategies.

Company Strengths and Weaknesses

Before starting any growth plans, it is critical that the company identifies what it’s great at and where it would need improvements. Topics like financials, marketing mix (the famous 6 P’s which include Product, Place, Price, Promotion, Processes and People), strategy, and company management, can all influence significantly the company’s ability to find new clients and even to retain existing ones. The article on Marketing in Small Business will provide more information.

Define the Market Segments

Defining a market is determining which clients, competitors, and suppliers interact to execute a type of job. In construction service, the market is usually defined geographically and by trade, like general contractors, plumbers and electricians. The types of jobs also influence the market, for instance if the work is residential, commercial, industrial or institutional. Whether the work is light, intermediate or heavy also helps to define the segments.

Market Opportunities and Threats

Once the market is defined, the factors which affect market dynamics must be found. Elements such as macroeconomics, customers, competitors, and suppliers will all determine how a market evolves in time. For instance, if a major competitor disappears, the market will shift dramatically in favor of all other competitors. The disappearance of a major customer will have a similar effect, but in the opposite direction. Considering those factors when establishing a plan is paramount.

Identify Goals and Objectives

With companies Strengths and Weaknesses and market Opportunities and Threats identified, a SWOT was effectively completed. The intersection of SWOT elements will help visualize where the company’s broad goals and objectives are located. An indicator of a correctly completed SWOT will result in target clients (with specific names) which share several similarities, for instance small and medium food processing plants within a restrained geographic area. It will also result in a rough understanding (from strengths) of what value the company can bring to those clients.

Develop a Marketing Strategy

When the clients and markets have been identified, the approach to bring in those clients’ business must now be developed. It is strongly recommended to use the marketing mix approach and create specific 6 P’s for the newly identified market and clients. With a clear marketing mix, the outline of an execution plan will start to form. However, before the plan can be executed, a company must ensure capacity and financial allow the go-ahead.

Understanding Capacity

For small construction service companies, capacity is ubiquitous. All owners know intuitively that if they don’t have enough workers or vehicles, they cannot take on more work. Planning for capacity increase is slightly trickier as intuition alone will not be sufficient. To plan for capacity increases, data driven decisions are the way to go. Knowing facts such as employee working hours per types of jobs, types of jobs by customer segment, and vehicle usage by volume are almost necessary to plan correctly. Forecasting future client volume based on past experience will also increase the accuracy of the capacity forecast.

Finances and Budgeting

Once the capacity increase has been estimated, the business can understand if additional investments are required. In most instance, the answer will be yes. Before going forward with committing a significant amount of money, the business must understand if it’s worth it. Both the articles on Forecasting Financials and Budgeting will provide insight on this particular element.

Define SMART Targets

When the marketing mix, capacity and financial plans are completed, defining clear targets for execution is necessary. Using the SMART method, meaning defining Specific, Measurable, Achievable, Relevant and Time-bound objectives, tracking the execution will be easier. Targets such as number of new clients, income from new clients, ROI, and budget will help provide visibility on the success of growth.

Review Progress Regularly and Adjust Accordingly

As the plan gets executed, it is extremely important to review the actual results of the targets set to know if the plan is on track or not. If some elements are hindering progress, adjusting the plan to them is key. If there is almost no new income generated, it may be a good idea to reconsider base assumptions and significantly adjust the plan. If the plan is progressing well, it’s a great sign, just continue doing what you’re doing.

Digitize

The best way to have real-time visibility on growth execution is to have digital systems in place. A CRM will provide insight on new clients generated, automated billing will simplify extracting income from the new customers, and having digitized bookkeeping will enable quick calculation of ROI. Having a digital system prior planning will also significantly help identify which markets are doing great and which may need more or less attention. The article Why Digitize and Automate? will provide even more reasons to go digital.

Takeaway

In conclusion, growth is a challenging but achievable goal for small companies. By creating a thorough SWOT, identifying goals and objectives, developing a marketing strategy, forecasting capacity and finances, creating a budget, determining SMART targets, reviewing progress towards those targets and embracing technology, small companies can develop a solid plan for growth and successfully navigate the process of growing their business. If on the contrary market conditions are pretty bad, Planning for a Downturn may also be a good idea.