The Contractors Midyear Performance Report: How Are You Doing?

In these unpredictable economic times, shifting your business strategy from defense to offense could be crucial.

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The economic turbulence of recent years has been challenging for the construction sector, among others, with the past months being particularly troublesome. The menacing duo of high inflation and increasing rates has been met with the dire prospect of a financial meltdown and decelerating economic development. Needless to say, our nation’s economy is experiencing an extraordinary period, with fluctuating market trends remaining a major theme.

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Though a downturn was anticipated across several construction sectors in 2023, this should not demotivate construction business owners like ourselves. As we navigate past the midpoint of the year, it is advisable for contractors to scout for areas of potential growth and undertake certain actions to fulfill their annual objectives.

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Where To Begin

Start by reassessing your long-term business blueprint. If your liquidity and short-term funds are high, this could be an great time for construction business owners and trade companies to concentrate on their longer-term strategic roadmap. Right now might be the most suitable time for you to review and adjust your 2023 business model and your three- and five-year strategies.

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Specifically, contemplate how the latest macroeconomic trends, current instability, and inflation have altered your business’s outlook and what challenges and opportunities have arisen due to these changes.

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Contractors risk overlooking chances for expansion or new projects by holding on to surplus cash amid market uncertainty. Ask yourself:

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What are the key drivers that will fuel your business’s growth and strengthen its valuation when considering possible monetization or exit options?
What is the impact and outcome of the initiatives you might have launched in response to the pandemic or supply chain disruptions last year, and should you rethink any strategies?

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Focus on Your Team

Remember to express gratitude to your team. The talent acquisition battleground remains intense in the construction sector. As the struggle for skilled personnel persists and continues to be a challenge, it’s vital that you go above and beyond for your employees, ensuring they know that you and the organization are there to provide support and assistance in their career progression.

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Never undervalue the importance of personal relationships with your team; in testing times, they need to know you’re reachable. Also, regularly communicate the benefits you provide to employees, as they may not always remember them. Amidst a competitive labor market, such gestures can help alleviate the strain of employee attrition.

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Going on the Offensive

Look for opportunities to gain additional market share. In the face of such economic ambiguity, it’s high time to switch your business to offense. Once the survival and upkeep of your enterprise are safeguarded, marketing initiatives to amplify your brand could be both timely and resourceful.Innovative and regular use of emerging social media platforms could be economical and bring you closer to potential clients.

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Make client retention a priority. The same factors that present opportunities to attract new customers could potentially backfire. Despite your consistent efforts to keep in touch with clients, the importance of this practice can’t be overstated. Your key clients should be aware of your optimism and readiness to assist them.

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Conduct conference calls, webinars, share educational content, and offer promotions. Even a simple check-in and “How are you faring?” can go a long way. The trick is to remain active and engaged.

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Evaluate your financial standing from a wider perspective. And if these planning subjects don’t fully satisfy your contemplative needs, there might be other financial matters that executives can tackle during the summer months. I suggest that business owners schedule meetings with their financial consultants, who can provide guidance on growth prospects throughout the year.

From a short-term cash flow standpoint, the summer can be a crucial time to assess profit progression versus objectives, as it marks your team’s annual midpoint. How might the recent surge in interest rates affect your existing or strategic financing needs?

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Consider which programs necessitate augmented effort and which should be terminated? Could a fresh approach to reporting and key performance indicators (KPIs) increase transparency and help reorient operations?

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If your current earnings don’t align with your expectations, you may want to reassess your targets and develop a new strategy to reach your desired position by year-end.

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One potent solution that could greatly assist commercial construction businesses through these trying times is the Business Diagnostic & Plan of Action (BPA) offered by Small Business Growth Partners (SBGP). The BPA is an exclusive business planning tool tailored to address the unique challenges and needs of small business builders, remodelers, and trade companies. It provides a thorough and comprehensive analysis of your business, highlighting areas of potential growth and detailing strategic action plans to navigate through economic uncertainties.

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This specialized tool, developed through a deep understanding of the small business construction industry, can help you rethink your strategies, manage your resources better, improve your operations, and bolster your market position. At a time when every decision counts, the BPA could be the crucial roadmap that guides your business to stability and success, even amidst challenging economic conditions.

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Summary Checklist & Key Metrics:

Reassess Business Strategy: Review your long-term business blueprint, including your current year and three-to-five year strategies.
Analyze Macroeconomic Impact: Consider how recent economic trends, volatility, and inflation have impacted your business and adjusted your outlook.
Prioritize Growth Drivers: Identify the key drivers that will fuel your business’s growth and strengthen its valuation.
Evaluate Initiatives: Review the impact of the initiatives launched in response to last year’s challenges (pandemic, supply chain disruptions) and consider if any strategic adjustments are needed.
Appreciate Employees: Check in with your employees, and ensure they feel supported and valued.
Talent Retention: Review your strategies to retain and attract talent. Are you communicating benefits and providing opportunities for growth?
Market Share: Determine if there are opportunities to gain additional market share and what resources are needed to seize these opportunities.
Client Retention: Assess how well you are retaining clients and maintaining strong relationships.
Financial Review: Review your financial situation from a macro perspective and meet with financial advisors for expertise on potential growth opportunities.
Impact of Interest Rates: Understand the potential impact of recent changes in interest rates on your financing needs.
Program Evaluation: Consider which programs need more effort and which should be discontinued.
Reporting and Metrics: Assess if a new approach to reporting and metrics could increase transparency and help keep operations on track.
Earnings vs Goals: Compare current earnings with your goals. If there’s a gap, reassess your goals or devise a new strategy to achieve them by year-end.