The construction landscape can be a harsh and unforgiving environment for firms seeking a positive return on investment (ROI), but there are plenty of measures that can be taken to improve your chances of success in a challenging industry.
In terms of running a successful and sustainable business model, construction firms face some of the steepest challenges. According to data from the US Bureau of Labor Statistics, just 35.9% of the 43,277 construction businesses that began operating since March 2011 still exist, with a distinct correlation between the age of the business and declining survival rates.
Securing that all-important ROI is imperative for the long-term success of businesses in the construction sector, but how can you secure your revenue streams into the future? Let’s take a deeper look at some of the best industry practices for improving the return on investment for construction firms:
1. Automate Your Processes
Using integrated software solutions is fast becoming an essential consideration for modern, effective resource allocation. This provides an element of centralized visibility that supports intelligent scheduling and better communication among teams.
Providers such as Access Construction offer AI elements in their offering, providing a more holistic overview of project expenses, timelines, supply chains, and resource management.
These intelligent automation tools mean that you can take tighter control over your budgets, simplifying how you manage your expenses to better enhance your revenues. AI tools can even provide full audit trails for even better visibility.
2. Use Data Analytics
In construction, if you don’t learn from your past mistakes, you’re doomed to repeat them. This means that making use of data analytics from historical project data can make all the difference in creating accurate plans and predictions for future projects.
Analytical insights can help to forecast labor needs more accurately based on project milestones and historical performance, meaning that you can control your budgets more tightly without overassigning work.
Additionally, these more precise forecasting tools allow you to submit more competitive and accurate bids, boosting your ROI potential by improving your chances of winning profitable projects.
3. Upskilling Workers
Getting your workforce right can also hold plenty of benefits in terms of building access to skilled staff as well as improving the chances of project success.
To nurture your access to skilled workers while caring for your ROI, you’ll need to move beyond the temptation of assigning whoever is available and instead match the right personnel with the skills needed to maximize project efficiency.
The best way to action this is to cross-train employees, upskilling their capabilities across different specializations. Whether this means allowing your electricians to learn HVAC systems or helping other workers to learn by joining team members in other areas of operation depends on your needs, but it can work wonders in boosting productivity and access to talent.
4. Equipment Efficiency
One of the most effective ways of caring for your ROI is to manage your equipment in a more sustainable way.
Thanks to Internet of Things (IoT) technology, it’s possible to anticipate the need for maintenance with sensors monitoring the condition of machinery and suggesting preventative maintenance before costly issues can occur.
It’s estimated that predictive maintenance for equipment can help to cut industry costs by up to 30%, allowing more firms to generate sustainable cash flow.
5. Standardize Workflows
It’s amazing how far a little housekeeping can go in saving construction firms significant amounts of money, and by creating standardized processes and project templates, you can stamp out instances of human error and optimize your workflows.
Implementing house processes such as prefabrication measures for manufacturing building components off-site to reduce labor needs can help to ensure that projects are completed on time without factors like weather getting in the way.
Just-in-time delivery can also help to optimize workflows where materials can arrive as and when they are needed on-site to eliminate clutter and prevent damage or theft.
6. Nurture Vendor Relationships
If you’re looking to make the most of your ROI, nurturing a strong relationship with your vendors can make all the difference in optimizing your supply chain further.
By taking the time to maintain a consistent and positive level of contact with vendors, you may be able to unlock discounts on bulk orders and negotiate strong cost savings on materials. By maintaining a strong relationship with your vendors, you can also receive early warnings about possible material shortages or price changes.
You may even be able to cut your storage expenses by housing your materials with your suppliers in facilities that are located near your most active sites.
7. Always Listen to Feedback
The industry’s most successful firms are constantly looking to evolve, and by listening to feedback, they can continue to nurture revenues and cut costs where opportunities arise.
To look after your ROI, you should always conduct post-project reviews to analyze the successful and unsuccessful areas of your operations and document insights to help shape future strategies.
You should also seek to track and report your KPIs like resource utilization rates, budget adherence, and on-time completion. Again, automation tools can help to provide intelligent visualizations to make these data insights more digestible.
Caring for Your ROI
The construction landscape is a significantly difficult industry to achieve long-term success in, and it’s essential to take proactive measures in nurturing your return on investment wherever possible.
Be sure to use data insights accordingly, and always be willing to learn the lessons of the past. There are many simple cost-saving strategies to help boost your bottom line, and going to the effort of actioning them today can carry significant rewards when looking to the future.