How to Expand Your Construction Business Using a Loan
If your construction business is lucrative, and you’re attracting more customers than you can serve, that’s great news! It can be challenging to generate sales, so if your business has mastered this, it’s likely that you’re ready to expand your business. To help you serve more customers, we’re going to review four ways that you can expand your construction business with the help of a loan.
1. Optimize Processes with New Technologies
The construction industry has been notoriously slow to adopt new technology, instead relying on manual methods like pen, paper and spreadsheets to manage new business opportunities and existing projects. Not only does this make it difficult to maintain accurate records, but many companies lack the proper infrastructure to expand.
Investing in the right technology can help take your business to the next level while outpacing the competition. Cloud-based platforms facilitate internal communication and make it possible to access information from any job site. It’s also a cost-effective and secure way to store and process data, and reduces unnecessary travel time and expenses by letting you review the status of any project without being physically present. Ultimately, these platforms allow for more advanced analytics, which is crucial if you want to expand your operations.
2. Purchase or Lease More Equipment
Whether you choose to buy or lease, new equipment is necessary to expand your construction business. Just as technology is transforming the construction industry, innovative equipment can help make your business more efficient in the long-run.
While buying equipment may be a better investment over time and allows you to control the timing of upgrades and maintenance, leasing eliminates the upfront cost of the equipment and lets you upgrade more often. Regardless of your approach, state-of-the-art machinery can be some of your largest overhead expenses when undergoing expansion, making a business loan beneficial.
3. Hire Skilled Workers
Even if your construction business is generating business, it can be challenging to complete projects or take on new ones if you don’t have enough employees to complete them. Many contractors have indicated that the lack of talent and skilled workers in the construction industry has been a significant obstacle to their growth. In fact, according to a recent survey conducted by the National Association of Home Builders, 82 percent of builders think cost and availability of labor are the biggest challenges the industry faces.
A business loan may allow you to attract and retain talented employees by increasing their base pay, awarding bonuses, or offering attractive benefit packages. Upgrading your workforce can make it possible for you to bid on additional and more profitable projects, ultimately contributing to your bottom line.
4. Invest in Marketing
A thoughtful marketing strategy can help you attract more customers in less time while also increasing repeat business. Although word-of-mouth advertising is common in the construction industry, relying only on referrals from current customers isn’t as effective as it used to be.
Today, you need an online presence to remain competitive. Studies show that 70 to 80 percent of potential customers research a company online before agreeing to give them business. While you can still use referrals to your advantage by posting customer testimonials on your website, you’ll need to clearly articulate what differentiates your company from the competition. If you’re ready to grow your operations, a business loan can give you additional resources to craft a strategy that significantly benefits your business over time.
Expanding your construction business can be challenging, but securing a loan for your construction business can help reduce some of these challenges and—when utilized strategically—may ultimately make your business more profitable.
Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author's alone, and have not been reviewed, approved, or otherwise endorsed by any of these entities.