The Essential Business Management Guide for General Contractors

Project delays and uncooperative teams aren’t just a massive headache, they can threaten to derail your company’s growth. Soothe the chaos with these tried and true strategies.

You’ve barely finished your first coffee and already notifications have your phone lit up like a Christmas tree.

Emails! Texts! Voicemails! Fill in the messaging app of your choice here!

The mode of communication is irrelevant. What matters is that another project is falling behind, your staff are busier blaming each other and bugging you for solutions than coming up with their own, and you definitely won’t be home in time for dinner with your family tonight.

When you’re running a bunch of complex projects, it’s easy to forget you’ve also got a company – and a life – of your own to run as well.

But it’s time to quit running and find a little calm. Or a lot. Because you deserve it. And also because you’ll never sustainably be able to scale your business without it.

This guide, along with all the free quick tools provided, are designed to set you on the path to managing your company in a way that’s organized, efficient and collaborative. And will have you home in time for dinner.

Put a business plan in place?

A business plan basically outlines the vision for your company’s future. It covers the:

• Purpose motivating your work
• Values that your company stands for
• Long-term and short-term goals
• Actionable steps to bring the vision to reality
• How you and your team will celebrate once you make it happen

It shouldn’t describe every detail on how exactly you’ll accomplish each goal, it’s more of a written framework that will help guide your financial and operational decisions.

Your business plan takes a higher level perspective on the company. Where do you see it progressing over the next five or ten years? How will the work you do and the way you do it positively impact the wider world?

As part of creating a business plan, it’s worth also considering where your company fits within the realm of general contracting. Are there particular types of projects you specialize in? What’s your team’s greatest strength (when they’re not arguing with each other)? What can you do that no one else can?

The format you choose for your business plan is completely up to you, but we suggest keeping it brief. Especially at the beginning, it makes everyone’s life easier – particularly yours. If you’re not sure how to start, we’ve got a one-page Strategic Plan template that will help.

Jonesing to learn more? Dig deeper with this article on How to Write a General Contractor Business Plan.

Create a budget and track your financials?

Budgets are probably not a new concept if you’ve been overseeing construction projects for a while. But we’re not talking about project budgets here. We’re talking about YOUR budget. For the company YOU’RE running. Yeah. That one.

Do you know what your profit margins are? Or where they should be? Are you burning too much on overhead? Or not spending enough on marketing? Are you using a customized chart of accounts? Are your eyes starting to glaze over?

Without having a clear budget and consistently tracking your company’s financials, it’s very difficult to plan for the future because you won’t have visibility into the resources available to grow, or how best to allocate the ones you’ve got.

Can you afford to hire another project manager? Or upgrade your CMS? Or buy that truck?

Answering those kinds of questions becomes much more straightforward when you have a proper budget and tracking system in place. You’ll be able to:

• Keep tabs on your actuals annually, quarterly and weekly
• Understand your revenue, variable expenses and overhead
• Increase your gross and net profit margins
• Make accurate business forecasts
• Do more accurate job costing

If you’re ready to end the financial freewheeling, this This Budget Quick Tool will get you on your way.

Hold your team accountable to project plans?

A plan that goes unfollowed isn’t even worth the paper it’s written on. Every project may start out with the best of intentions, but inevitably stuff. just. happens.

Most of the time, though, if you look closely, many of those circumstances that seem to blindside everyone could have been avoided by being proactive. By instilling an accountability system into your company’s culture, staff – and even subcontractors – are made fully aware of what’s expected of them and what they need to do to meet their goals each week.

Once a team starts to take responsibility for their action items, an interesting thing tends to happen. They become empowered. When problems arise, they’re more prone to seek out resolutions because there’s no one else to point the finger at. They own the problem. They also own the triumph of solving it.

The most effective method we’ve seen for setting a team’s priorities is with Goal Setting & Review sessions. This free webinar explains how they can transform a team’s entire dynamic.

Find quality staff and subs?

Finding dependable and talented people has never been tougher, particularly for general contractors. The industry faces an “experience exodus” as waves of tradespeople approach retirement.

However, it is possible to not just attract A-list employees and subcontractors, but have them clamoring to work with you.

The best subcontractors gravitate to general contractors who pay on time, run organized projects, communicate well and have happy team members. Effective business management makes your company the one everybody wants to get in with.

When it comes to building cohesive teams, much of it begins with hiring the people who truly embody your company’s values.

To find them, you must have a clear idea of who you’re looking for and this extends beyond technical competencies, to the prospect’s attitudes and perspectives. We’ve got a template for creating Ideal Candidate Profiles that will help you define the skills and personal attributes needed for each role.

Once applications start flowing in and you need to narrow the field, this Interview Guide will help you pick up on red flags and recognize the individuals who are the best fit for your business.

Finally, we also have a Training Checklist to help you set your new hires off on the right foot.

Make a clear organizational chart?

General contractors that have had to expand their team quickly often bypass the step of creating an organizational hierarchy that clearly defines who reports to who and what each position covers.

But without that critical document, your team members are likely to trip over each other or drop the ball, since they aren’t aware of exactly where their job ends and the next person’s begins.

It will help unify your team and keep things from falling between the cracks or from people wasting time duplicating work. One other benefit: it’ll reduce burn out.

With all the demands that come with managing multiple projects, you can’t afford to lose good people. Keep everyone engaged and healthy by setting clear boundaries between roles.

The benefits of having a proper org chart also extend to you as well. You’ll be able to alleviate some of the stress of being at the center of everything and instead sit at the top, able to delegate tasks down.

To help you define the expected deliverables for each role in your organization, we’ve put together an Employment Agreements template.

Produce standard operating procedures?

The topic of standard operating procedures (SOPs) can, at first, seem likely to make your head nod from boredom, but they don’t have to be sleep-inducing documents.

Yes, they’re instructional, but that doesn’t mean they need to be dull. Images and videos can provide clarity and context while also bringing a process to life.

For general contractors in particular, they can be true sanity-savers as having set protocols will help bring consistency, save time and make training new staff a breeze.

There’s another huge aspect to SOPs that business owners overlook. If you ever plan to sell your business, SOPs will add tremendous value. Potential buyers will look for them when doing their due diligence.

Creating SOPs can seem like a huge lift, but they really aren’t. If you’d like to learn more about how to bring more standardization into your business, Breakthrough Academy can help.

Amplify your sales and marketing?

A sales and marketing strategy could be referred to as lead flow management: marketing brings in leads, leads (some of them, anyway) turn into jobs.

As a general contractor, to put together an effective lead flow system, it’s important to know your conversion levels, basically how many leads you need to chase in order to land the jobs you need to keep your business humming. Not to mention… growing.

Another key element to this is that it will help you put together better job estimates. If you know what you need, you know what to go after.

When projects get busy, it’s easy for sales and marketing efforts to fall by the wayside and get overlooked, but for the sake of maintaining stability in your revenue, these activities ought to stay front of mind.

If you’re interested in optimizing your sales and marketing strategy, we’ve got a Sales Forecasting Tool that can help, available as part of our coaching program.

Use general contracting management software?

Just like it’s difficult to build anything without tools, it’s nearly impossible to effectively run a general contracting company without tech.

There are platforms for:

• Project management, such as Estimate Rocket
• Budget tracking
• Job costing
• Job site tracking, such as CompanyCam
• Team communication
• Customer support
• Marketing
• Reputation management, such as NiceJob

Once you start researching the various apps, the options can seem overwhelming, but never fear! This Tech Stack Quick Tool will help you get a sense of where to start.

Tie it up?

We get that there’s a lot to wrap your head around here, so pace yourself. You don’t need to implement every system all at once.

Breakthrough Academy has distilled the above elements down to 6 key pillars we call The Contractor Growth Method.

You can think of it like a system of systems – complete with the support of expert coaches, a motivated community and thoughtfully crafted templates – all designed to help you free yourself from the frenzy of day-to-day operations.

Bon appétit!

If you’re a motivated, trustworthy general contractor who’s ready to scale your business, get in touch today to discover how Breakthrough Academy can help you reach your business goals and better your life.