Family business doesn’t necessarily mean small business. In fact, some of the world’s most successful businesses are family businesses - IKEA, Samsung, Walmart and Ford are just a few examples. In the construction industry, plenty of large companies started out as family-run enterprises.
There are many ways being a family-run company in the construction industry can benefit you and help you grow from a smaller business into a regional, national or even international company. Here are six growth strategies specifically for family-run construction businesses to help get you started:
1. Team development
As a family-run construction business, you have a unique opportunity to cultivate a strong culture and a close-knit team. Culture in any business is important; it can be the difference between motivated employees and those who’ll do the bare minimum for their pay.
You can create a culture of belonging and a family dynamic that extends to your non-family employees by setting out clear values and treating staff equally. Not only will this result in greater buy-in and improved motivation from your team, but it will also reduce high employee turnover, which is expensive and should be avoided where possible.
It’s also vital that you invest in talent. Finding the best people for the job is essential if you’re planning to grow your family-run business. This might mean spending more on recruitment, but it will undoubtedly be worth it thanks to the knowledge, skills and talent these employees bring to your company. As well as investing in new talent, make sure you’re able to retain your best employees. Reward hard work and reliability, encourage development and offer promotions to those who deserve it. A strong team is the core of any business. Your staff should be skilled, dependable and knowledgeable. When it comes to growth, making sure you have the right people and resources to handle more work is key.
One of the great things about family businesses is that people are generally more willing to pitch in and work on several different projects at once. However, if you’re planning on expanding your construction business, it’s important to define clear roles and responsibilities. This avoids disengagement and confusion amongst your teams. Fairness is key; family members should be held to the same standards as non-family employees.
While having family working together has lots of benefits, as with any business, conflicts can occur. It’s important therefore to introduce strong communication structures in your business. Everyone should feel a part of the team and have a voice. You’ll also need to have a clear process in place for settling any disputes.
Finally, when it comes to teams, strong leadership is key for driving forward your construction business. Don’t micromanage your teams. Lead them, while providing freedom and structure to make the right decisions for the business, showing confidence in their abilities.
2. Grow your brand
There are literally thousands of construction businesses competing against one another worldwide to grow in this competitive industry. What will set you apart is a solid growth strategy that includes marketing your construction business to potential new customers. Investing in a dedicated marketing campaign designed to boost your business will help you attract more projects and potential clients.
A key part of your marketing strategy should be building your brand. Being a family-run business can put you at an advantage here as clients can show greater trust towards family-run businesses. Family businesses are also seen by clients as more approachable, customer-friendly and trustworthy. And trust leads to business. So, when thinking about your brand, don’t ignore your family roots. It's an influential factor that you should be actively promoting.
Networking is also essential for any growing business. A great way to begin is by joining a trade association or local networking group. The construction industry offers a multitude of ways to meet people. Through effective networking, you’ll build your brand awareness, generating leads for your business and you may even find new suppliers or investors.
Another good way to network as a family business is to be active within your local community. Take part in local forums, sponsor community events or even host them. By giving back, you’ll improve your image and brand awareness as well as securing potential future business contacts.
3. Be financially savvy
A study by the Harvard Business Review looked at the financial performance of family businesses in several countries across the globe. The study found that while family-run businesses did not grow particularly rapidly during times of economic stability, the average long-term financial performance of these businesses was higher overall. The study attributed this to the fact that the family-run businesses were smarter with their finances, remaining frugal in both lean and comfortable times. By incorporating leaner cost structures, these businesses were better prepared for economic downturns, meaning they were less likely to have to make major layoffs.
The takeaway? Family businesses tend to be smarter with money and they benefit long term because of it. As a growing business, focus more on resilience than performance and be prepared for economic slumps. This approach will see you through in the long-run.
As a growing family business in the construction industry you should, at least to start with, be risk averse. Avoid taking on any projects you are uncertain about or that are ‘borderline’ as these could result in expensive losses. Stick to strong projects with a guaranteed return. Later on, when you are bigger and more established, you’ll have more flexibility to take risks. In the meantime, stick to the safe bets.
4. Prioritize your customers
If more people believe that family businesses are better at customer service, then it’s vital to be just that. Prioritize your customer service to ensure your clients are getting the best service and won’t go elsewhere. When working on a project with a client, make sure you are in regular communication with them on all major aspects of the project. Be available to respond quickly to their queries. Happy clients = returning clients.
Taking good care of your customers is key to securing your reputation. Most family businesses know that some of the best business comes through word of mouth. As you grow, you’ll find business from other sources, but it’s still essential to respect and take care of your customers. Cement your reputation by championing quality. Never cut corners or compromise on your high standards.
5. Adapt to survive
Any successful business is marked by its ability to adapt. The industry is rapidly changing and those who stay afloat and thrive in challenging times are the ones with the best chances of success. A trap some family businesses can fall into is the ‘we’ve always done it this way’ mentality. Make sure you keep up with changing trends. Networking and signing up to industry publications are good ways to stay ahead, but it's also vital to think beyond to future trends and developments.
You’ll need to be proactive when it comes to seeking out new opportunities for growth and development. That’s where hiring creative, innovative people comes in. When recruiting, look for people who can help you develop a long term outlook while keeping up with and staying relevant to customers’ changing needs.
To ensure sustainable growth for your construction business, you should make it a priority to invest time and money into development. Whether that’s buying new equipment, investing in the latest technology to help scale your operations, hiring the right people, training existing staff or increasing your marketing budget, the outlay will be worth it in the end.
6. Stay focused
Finally, when it comes to growing your family-run business in the competitive construction industry, it’s vital that you retain a clear focus. Focus on your strengths and find a niche market that you can continue to develop and grow into. The more specific, the better. You’ll gain a reputation for your specialist expertise and this will help you win new business.
A great way to stay focused is to regularly audit your construction business. Look at your financial stability, customer referrals, employee turnover and how the business is rated by customers. This will help you identify areas to improve as well as see what you’re doing well.
Set clear short and long term goals for growth. Consider revenue, profit margins and average project value to work out what you need to grow. Use data from your previous projects to improve your future decision making and goal setting.
There’s a lot that can be said for being a family-run business in the construction industry. By focusing on what you want to achieve, adapting your practices, prioritising your team and staying frugal, you’ll be on the track to succeed.
About the Author
Katy Carter is a content writer for construction and waste management business B&A Group - a family-run company since 1993. The company supplies quarried and recycled aggregates for large-scale development projects throughout South West England.