Business

A Construction Veteran's New Year Checklist for Contractors

Are you taking these 12 steps to ensure company success in 2024? From reviewing last year's performance to pursuing continuous improvement, take the time to address these foundational items.
By John Lack
January 25, 2024
Topics
Business

The new year is a time for reflection. It’s a time to reassess business goals, staffing needs, processes and more.

As you begin planning for the new year, it is important to review what is going well and the opportunities for improvement that can help optimize your business’s efficiency, reputation and profitability.

Here are the 12 items recommended by a construction industry expert to include on your checklist as you analyze your contracting business for the new year.

1. REVIEW LAST YEAR’S PERFORMANCE

It’s hard to know where to go if you don’t know where you’re starting. That’s why planning for the future should start with a review of the past year. This includes your company’s financial performance, project completion, employee relationships and other challenges. This step can help inform the other items on the checklist.

2. STRATEGIC PLANNING

After identifying opportunities for improvement, set clear goals and objectives for those opportunities in the coming year. Define what key performance indicators you’ll use to measure progress. KPIs aim to measure and monitor operational performance across the company.

In general, businesses measure and track KPIs through reporting tools and analytic software. You can use KPIs to help evaluate things like what to self-perform versus sub-out, or equipment to purchase versus lease. Make sure you’re aligning your objectives with industry trends and market demands.

3. BUDGET AND FINANCIAL PLANNING

With your priorities in mind, work with your accountant to develop and finalize your business’s annual budget. Review and adjust financial forecasts based on market conditions and identify cost-saving opportunities, such as streamlining project management or implementing energy-efficient processes. Incorporating these cost-saving opportunities can enhance efficiency and improve your company’s bottom line.

4. RISK ASSESSMENT

Identify potential risks and develop strategies to mitigate them. Review your business practice with your construction attorney and prioritize any areas of concern. As your business changes from year to year, it’s important to review your insurance coverage and ensure continued compliance with safety regulations as well as industry standards.

5. PROJECT PORTFOLIO REVIEW

Assess the progress of ongoing projects and prioritize them based on strategic goals, financial considerations and intended outcomes. It is critical to know your cost at any time throughout the duration of a project, but assessing projects compared to each other can help you identify which projects require adjustment or reassessment to keep costs in line.

6. TECHNOLOGY INTEGRATIONS

The construction market fluctuates. Staying on top of the constant changes and technological growth can enhance project management. Research takes time and is critical in evaluating new technologies. Anything that saves labor hours or enhances safety, such as tools, wearables and PPE, may be a great investment.

Contractors’ technology needs differ based on what their business does. Construction-management software, building information modeling, drones, smart phones, GPS tracking, video surveillance systems and daily jobsite log apps are only some of the technologies to consider to improve your business’ efficiency.

7. HUMAN RESOURCES

Review workforce needs for the coming year and assess any skills gaps. Ensure your firm’s training programs are sufficient and that employees have opportunities for professional development. Implementing continuous training programs can also ensure employees are updated on the latest industry techniques, safety procedures and regulations.

Consider offering health and wellness options like counseling services, health screenings and exercise opportunities to benefit your workforce and encourage wellbeing. Remember that people are a company’s greatest asset. With the skilled-labor shortage, you want to make sure that you keep them with you. Take time to listen to them and their needs.

8. SUPPLY-CHAIN MANAGEMENT

It’s no secret that planning around the construction supply chain can be complex and unpredictable. That’s why it’s important to establish good relationships with reliable suppliers from the start. When you have solid partnerships, it’s easier to assess the availability and cost of construction materials. It’s also essential to evaluate how global events may impact the state of the construction supply chain. Staying on top of these emerging trends will help to improve project management.

9. CLIENT RELATIONSHIP MANAGEMENT

Strengthening existing client relationships with effective communication and reliability can create success and aid expansion for your company. Some suggestions for effectively managing client relationships include:

  • Clearly defining the scope of work, timelines and budget at the beginning of the project.
  • Providing regular updates on project progress, potential delays and changes to the scope of work.
  • Ensuring the client understands what to expect at each phase of the construction process.
  • Providing a point of contact to whom clients can go with questions or concerns.

10. MARKETING AND BRANDING

Reviewing how your marketing and branding are helping you achieve your goals can help identify areas for improvement. Specific areas to review include your website, social-media profiles and any paid advertising or public relations efforts. If this is an area you’d like to strengthen, but are not sure how to do so, consider outsourcing to an expert so you can focus on what you do best.

11. CORPORATE SOCIAL RESPONSIBILITY

Corporate social responsibility involves integrating ethical and sustainable practices into your company’s business model. In the construction industry, you can reduce your environmental impact by prioritizing energy-efficient techniques, reducing waste and optimizing transportation. Reviewing green building and certification requirements can also help ensure your business practices remain up to date.

Now more than ever, consumers want to work with companies that have a positive impact on their respective communities. By participating in community outreach programs, engagement efforts and philanthropic efforts, your company can maintain a socially responsible business model. It’s good for business, the environment and your community.

12. CONTINUOUS IMPROVEMENT

Committing to an environment of continuous improvement involves advocating for employee enhancement and active participation from leadership. A few strategies include providing skill development training, implementing lean construction principles, and celebrating success to develop and maintain your company’s culture. While continuous improvement isn’t a one-and-done deal—hence its continuous nature—you should set aside time, at least quarterly, to assess progress in these priority areas.

There can be a lot of pressure to start the new year off strong, but taking time to address these foundational items can help result in a measured approach that positions your business for sustainable success.

by John Lack
John Lack brings over 35 years of experience in the construction industry in both field and office positions to Acuity Insurance including carpentry, welding, project management, contract negotiation, and much more. His main focus at Acuity is to help his customers better understand insurance and offer products and services that meet their unique needs.

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