During good economic times, referrals and repeat business can give a company a false sense of security and delay the development of long-term business strategies.
When the backlog runs out and new projects stop coming in, what should a contractor do? In the absence of a strategy, companies often engage in a whirlwind of unfocused sales and marketing activities.
A solid strategy can help contractors stay focused and help measure the results of sales and marketing efforts to position the company for better times.
A strategy starts with identifying a business objective and potential clients. Classic strategies include:
- offering additional services to clients;
- identifying opportunities in other geographic areas; and
- determining new uses for existing services or products.
Business development stems from success in finding opportunities and focusing attention on taking advantage of the ones that align with the business. To uncover market demand, contractors can ask questions such as: Where are schools or tribal casinos being built? Does it make sense for a utility contractor to move into environmental work?
One Florida-based contractor responded to a recent construction slowdown by resizing its workforce and minimizing travel expenses. The company started accepting work only within a 50-mile radius and bidding on smaller projects it might have turned down a year earlier.
The slowdown dramatically cut into revenue—putting the brakes on the trucking, site preparation and materials side of the business. In response, the contractor changed its focus to drive its demolition revenue. Staff identified vacant buildings and burned-out structures, and then targeted building owners with mailings and phone calls. The company also subscribed to lead services, built relationships with local governments to get on preferred vendor lists and looked for new construction projects requiring demolition.
Building a Business Strategy.
It typically takes several steps to build and execute a sustainable business strategy. Here are three objectives on which businesses should focus:
Define the competitive landscape. Large and small companies rely on several tools to understand their target markets and competitors. One of the most valuable tools is client feedback. Why does a client choose to work with a given company? Which other services might they be willing to purchase from a trusted provider?
A company trying to understand where it fits in the market also can check competitors’ websites for potential clients and marketing ideas.
To get a dynamic opportunity-by-opportunity view of the market, contractors can subscribe to an online service offering construction or government leads. Some services offer data to help companies win business.