“Many construction businesses fail because they don’t have the proper systems in place to keep managers, employees and projects on track,” observed Anthony Smith, chief executive officer of Insightly (a customer relations management technology firm.)
Citing a University of Tennessee study, he noted that 47% of construction firms barely make it past the four-year milestone. Smith emphasized that company failure results from the loss of loyal customers.
“Customers are the lifeblood of any business. So when they start to take their business elsewhere, it’s a red flag that things aren’t going well. Customers want to do business with companies that understand their preferences and address their questions. One reason customer service can start to slip is owners and managers can’t keep track of customer details, so key information slips through the cracks,” he observed.
Additionally, building castles in the air could be a company’s Waterloo. Smith stressed the need to keep cash flowing through the system, without majority of it getting caught up in expansion expenditures. “Cash is king, so carefully plan the monthly budget and accurately project cash flow numbers,” he advised.
Further, the technology executive said there is a need to focus on proper project management processes.
“A strong pipeline of projects is vital to the long-term success of a business. However, similar to keeping track of customer details, staying on top of project deadlines can be a challenge. Missed deadlines slow down the overall timeline for a project and can lead to unsatisfied customers,” Smith observed. “By closely managing projects, construction company owners can spot the early warning signs for problems that could derail the project.”