With the flow of technological possibilities flooding the construction industry, standing still, or burrowing in that old spreadsheet, is not a viable option. The push for efficiency and speed has never been more urgent, though it seems that tech driven solutions are rolling out faster than they can be understood and leveraged. Here are some practical pointers for navigating forward.
Be A Copy Cat
Finding out how other people in your world are leveraging technology is a very wise and practical way to give yourself a jumpstart. At GB Financial Services, Garry Bartecki encourages construction company owners to become more savvy about how emerging technology applies to the business, and cautions: “If you do nothing, you will find yourself in a competitive market requiring you to shave more profit out of your bids to stand a chance of getting the work.” So what’s a step you can take in near time? How about learning how others are using technology to reduce costs and speed up project completions? You probably don’t even need to stray too far afield to gather insights. Consider for example, as Bartecki advises, leveraging the professional connections you already have to get a leg up on the latest intel:
I would be talking to my banker (who should be familiar with the construction industry) to find out what other contractors are doing and where they are spending to change….The same goes for the other professionals you work with, including your accountant and attorney. They should be construction experts who can bring ideas to the table to help improve profitability and cash flow … .Work with professionals who know your industry….Do not forget your system providers. They should provide industry-specific data and comparison numbers relative to sales per employee, gross profit per employee, gross margin percentage and operating expense…. Find folks who can provide industry data that you can compare to your numbers so that you can see when you start falling behind the curve. You may want to follow public contracting companies because their reporting requirements provide comparative data that you can also use in your operation.
Hire Smart
Although sometimes seen as a separate problem in the construction industry, it’s best to think of the labor challenge as inherently a tech challenge. After all, a tech savvy employee team will instinctively lean into the latest ways to increase efficiency and speed up work. That’s why it’s imperative to attract, leverage, train and retain skilled technology workers. Toward propelling into the future, in addition to the all out effort to integrate “the latest technologies into modern construction workflows,” companies need to be actively partnering with educational institutions to put students who are both tech-natives and AI natives on a path into construction. While building the pipeline from tech studies into construction, it is also wise to update human resource policies to ensure competitiveness:
You need to be flexible in terms of pay and benefits….Go beyond and above to make your employees feel like partners. You can take many steps that will not cost you much but will be appreciated by your employee’s family.Everybody wants to feel appreciated, have a chance for advancement, be trained on the latest equipment being used, and have a profit-sharing plan or other 401 K type plans available with some discussion and training on how to use these plans.A big benefit that keeps folks around is a high-end health insurance program covering hospital, doctor visits, meds, eye and dental requirements. This type of plan with a minimal employee contribution keeps people on the payroll.
Leverage Financial Intel
A solid understanding of your finances is essential for success. Without it, you cannot be agile or competitive. When it comes to organizing finances, Bartecki reminds us: Make sure you understand your bank arrangements, covenants, interest rates and ability to cover your works in process…. A detailed cash flow statement is mandatory to share with the bank.When putting the cash flow plan together, investigate each cost line item to see if there are price adjustments to ask for….Review each line item and ask to see what makes up the balance.”
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