9 Tips To Grow Your Construction Business in 2022
Do you have a foolproof plan to double profits by the end of 2022? If your plan is missing even one of these nine essentials specifically for construction businesses, you could be leaving money on the table.
Want to find out? Watch the opening segment of our three-part Construction Business Growth Series led by construction payment expert Danny Stagliano.
Watch to hear:
- The #1 reason why construction businesses fail, and how to avoid it
- Why setting the right expectations from the beginning of every project can make or break 2022
- How to streamline the processes that are draining your time and profits most
Earn a certificate that can be shared on LinkedIn by watching the recording of all three parts of the Construction Business Growth Series and taking this quick quiz.
Part one: 9 Tips To Grow Your Construction Business in 2022
Speaker 1 (00:03):
So welcome to today’s webinar, really happy to have y’all all here to join us. As we talk about nine solutions that have helped construction businesses achieve massive growth. The start of the new year is a great time to refine are growth goals. So I hope y’all really can tap in here, um, and like get that new start energy as you listen today. So, um, I wanted to let everyone know this is like the beginning of an on Gooding construction business growth series. Uh, so if you find what I share today helps full keep an eye out for invites to some deeper dives into successfully executing some of today’s most critical tips. So after this webinar, there’s gonna be how financing can grow your construction business. That’ll be on February 17th and then three steps to avoiding cash flow, killing payment problems on, on construction jobs. That’s in a couple months on March 9th.
Speaker 1 (01:05):
Um, and then if you, if you attend those, you get a fancy certificate to share on LinkedIn. Uh, if you watch all three. So, um, just wanna say that we’re recording this live also, uh, and you’ll receive a link to the recording tomorrow. If you’d like to watch it again or share it with your team or just think I’m really fun. Uh, any of them, any of those are acceptable reasons. Um, and then also wanna say, uh, if there’s any questions, uh, during the presentation, go ahead, enter them in the chat box somewhere on your screen, depending on where your little zoom bar is, uh, I’m in the chat box, I will make sure, uh, those questions are answered at the end. Cool. So my name’s Danny stag. I am a senior construction payment expert here at level set. I work to help businesses like yours, get paid fast and without payment problems, it’s a dream, right.
Speaker 1 (02:04):
Um, really love what I do here. Um, it’s been about two and a half years at level set, uh, and just have seen incredible success, uh, with many of the people that I work with. Um, and want to keep seeing that. So really excited to, to walk you all through, uh, what I’ve helped hundreds of other businesses do personally, and what we help thousands of other businesses do as a whole, uh, here today. So before we get into today’s discussion, let’s talk about level set. So we all know that the construction industry presents all sorts of challenges when it comes to getting paid level set, as many of you know, and some of you may not is here to solve those challenges. So we provide all kinds of resources from educational guides, uh, to financing for materials. Um, and of course cloud-based lean rights management software, which I’ll dive into, uh, you know, later in this, in this webinar here. So let’s get to today’s topic solutions to support your business growth goals. Here are the nine solutions we’re gonna talk about today. I don’t need to read through all of them. Uh, just take a quick look and let’s hop on in.
Speaker 1 (03:38):
So this is probably no surprise to most of you, but cashflow problems are the number one reason why construction companies fail. So the gap between providing your services and getting paid is longer than any industry in the world. We’re talking 83 plus days on average. Okay. Um, you know, with a large outflow of cash before you’re even working on a project in some cases, and then also hoping nothing goes wrong throughout the project, uh, with the hope you’re gonna get paid. Right? So, uh, when you’re trying to grow your business, having cash reserves is key, right? Just, just cash in the pocket. So one easy way to protect your cash reserves is do finance, your material purchases. So maybe some of you use creditors, um, you know, banks, what have you. Um, but for those of you who don’t letting other, letting someone else purchase your materials upfront, so you can wait till you have the money in your pocket from getting paid to actually pay yourself that way you can use that cash for other bills that can’t wait and keep your business from that, you know, continuous cycle of having no cash, just floating cash.
Speaker 1 (05:01):
So can’t really make this suggestion without highlighting, um, our own materials financing offering here at level sets. Uh, as you can see on the screen here, um, getting your materials financed through level set is easy. You can apply with us to see if you qualify and you get approved within 48 hours. We work with all material suppliers, and then you don’t pay us until you get paid on the job or within 120 days. Whatever’s your preference. So if you have any interest in that, feel free to throw, um, questions below. Like I said, reach out to me off for the fact. So Vivian bell, um, who’s featured here on the slide is the accountant at a mill working company in Florida called mesh. Her company has been working with us to finance their materials. Uh, they’ve probably financed over 10 jobs already at this point.
Speaker 1 (06:02):
Uh, so they can take on new jobs without waiting for their customers to pay. Uh, so she’s one of the many examples. People are loving it. I can’t stress it enough. Uh, how nice it is to have cash in your pocket. I’m sure y’all can imagine. So that’s number one, number two, setting payment expectations. All right. So another important part of growing this business is making the process to pay easy for your customers. And you do this by setting clear expectations about price using simple language and more importantly, making sure your customers are aware of what happens if they don’t follow the terms of your contract, let them know you’re prepared to follow if they don’t follow through with the payment terms. Agreed. And look, I know there’s a, a lot of people have this fear, like, well, I don’t want to, to scare people at the beginning of a job.
Speaker 1 (07:00):
Well, it’s not right. It’s like if you walk into a doctor’s office and they tell you, you can’t have health insurance, right. That’s that’s what lie Wrights are. It’s it’s insurance. Hey, I just wanna make sure I’m getting paid for the work that I do. All right. And if they’re against you protecting to get paid, it’s probably not someone you wanna work with anyway. Right? It might feel a little harsh, like I said, but you want to, you wanna set those clear and firm boundaries cuz in the long run, it’ll save you tons of time and stress when it comes to actually getting paid <laugh> uh, and then more importantly, just, just make sure you’re, you’re gonna get paid. Uh, so you can continue to grow your business. Now, a big part of setting payment expectations is protecting your lie rights, which is number three.
Speaker 1 (07:55):
In some states in, in many states, lie rights are not going to be you’re. You’re not even gonna be able to file a lie. If you don’t take the right steps at the right time to protect those rights, sending the right notices. So what are lean rights for those of you who don’t know, what’s a lie, lean writes, refer to the legal authority to file a mechanics, lie against an owner’s property or in the case of a government project, the right to make a bond claim. If you are not paid for the work or materials you provide on a construction project, you can use that lien as a form of security to force payment, a is a legal claim on the property title, which is very difficult to get rid of without paying the debt. And in some cases allows the, uh, allows the claimant. So whoever files CEL lean to go after that property.
Speaker 1 (09:00):
So who has lean rights? Generally speaking, everyone on this call is gonna have lie rights, right? So direct contractors, subs, material, suppliers, equipment, lessers, design professionals, laborers, staffing companies all have lie rights. Although they are limited by specific rules that vary from one state to the next. Then lastly, how do you protect those lie rights in almost all states? There’s a couple in the center of the country, uh, that don’t require a notice, but pretty much every state has some sort of notice that is required within a specified timeframe to actually protect those rights. Uh, if you’re curious about your state, let me know in the, in the question box below, or you can, like I said, reach out to me directly as well.
Speaker 1 (09:56):
Number four, choosing your customers wisely. So who are you working with? Right? <laugh> um, you probably have those people you work with all the time. You shake their hand, you feel really good. Maybe you get a beer with them every now and then, right? Um, those are the ones that you have strong partnerships and you trust to pay on time. However, in order to grow your business, you’re gonna have to take on new customers. And in taking on new customers, there’s a lot of financial risk involved, but you can curb some of this risk by making smart choices about how, who you work with.
Speaker 1 (10:40):
Excuse me, at level set, we have two things that can help with choosing your customers wisely. First is our free payment profile. So maybe many of you have taken advantage of this already. Uh, you can visit our website, it for free. You can search general contractors, subcontractors, and suppliers to view a profile that shows details about their payment, reputation and company health. Many of these profiles are also gonna show what payment paperwork they require and you can even get connected directly with other contract through their review page. Again, this is free. Can’t stress enough. It’s really good. It’s like Yelp for contractors, right? You’re in a new city. You’re on vacation. Where do you go to eat? You check the reviews. So, um, number two, our construction payment risk reports. So I sure some of y’all in here work in credit or have a credit department. Um, these, these risk reports are a great way to pre-qualify potential customers. These reports are different from your general credit reports because they’re built specifically for the construction industry and include payment scores. As you can see, like right here, based on job growth, payment, speed, any disputes against them, uh, and, and many other factors. So again, grow your BI business by taking on new customers, but be wise about who you’re working with.
Speaker 1 (12:22):
Just wanna remind everyone question box looks like we just got one looking forward to answering it. I love questions. Um, I’m decently knowledgeable about this stuff after doing this work every day. So, um, solution five bid accurately. I cannot stress enough how important it is to bid accurately, accurately to grow your business. I know like it’s tempting to overbid to increase your margins. However you can lose potential clients that way, right? When coming up with a bid amount, it’s critical to evaluate past projects. So your estimate is as accurate as possible. You can also take a look at the return on investment of past projects, solution six, taking advantage of automation. So I wanna just get this out of the way, like to some, maybe like the word automation is a turnoff, right? So what I really uh, mean when I say automation is just finding a way to make complex things simple. All right. So out, you know, if you’re experiencing rapid growth or preparing for growth, it’s important to make sure you don’t have any processes that can slow down that growth. If you’re taking on more jobs, you wanna make sure that your back office team is equipped to handle these job accounts without needing to hire more people. You can do that by automating certain tasks or taking advantage of technology to streamline anything that’s manual like data entry. When it comes to payment paperwork again, level set is a great solution for this.
Speaker 1 (14:18):
We make it easy for you to automate the lean rights process and send notices or collect waivers in bulk. Not only can you use level set to send like a one off document here and there, but you can also work with us to make sure no matter what state you’re working in, who you’re working for, what your role is on the job that you’re automatically protected, give you that peace of mind. This takes the stress out of protecting lie rights. It takes outta your hands. So just got a couple examples, um, of businesses that experienced rapid growth and took advantage of automation to run more efficiently so they could maximize their profits. Here’s Thomas box, he’s the credit director at Herby. They’re a national electrical distributor based outta Mississippi, many, uh, maybe some of you work with Thomas and Iby. Um, cuz they’re working on thousands of jobs each year.
Speaker 1 (15:21):
They protect their lean rights on every large job. And I, I remember when we first started talking to Thomas, um, he was nervous to have notices because you know, they’re sensitive documents or they can be seen as such however, you know, once he took this out of his team’s hands switched to that automated process, they had a ton more time in the office to focus on the other important parts of managing job accounts and growing the business. Second example is Dawn Moores. Dawn is the branch administrator at the Austin, Texas branch of PCI. So they’re a nationwide specialty subcontractor in Texas protecting lie rights is one of the harder states as those of you who are in Texas may know because there are multiple deadlines track, multiple notices that need to be sent. So as PCI and Austin has grown and taken on more jobs, they’re averaging about a hundred a month now, uh, she found that doing these monthly notices by hand was just way too time consuming. So they started automation. They now I spend four hours or less per month on the notice process, whereas before she was spending up to 30 hours each month on notices, that’s a week, right? Almost my math’s correct. Um, so people see a ton of results. I’ve got countless other examples of people who I’ve been working with seeing the same things.
Speaker 1 (16:56):
Number seven, tracking financial performance. So reporting on your finances is a key part of growth. So if you’re currently in business, chances are, you’re already doing some kind of reporting. Keep in mind that the more you track your finances, the more you can make data driven decisions, uh, to lead to growth for your business. So tracking your financial performance over time will actually help you identify trends that you can control. What are things that you can control, right? That’s what matters. In addition to tracking variances in job costs and labor hours, you could be watching key performance indicators that measure how effectively you are collecting on invoices, managing and profits eighth solution. It’s also related to tracking in a sense, but it’s specifically tracking what’s happening with payments on your jobs. So how are other people getting paid on our jobs? That’s all great information to have.
Speaker 1 (18:06):
Uh, so you know how cash flows gonna look on your jobs. So, um, if you’re one of those subs that comes onto a job later in the process, wouldn’t it be nice to know if there’s been payment delays or Lean’s filed on the job at of course it would, right? This is another area where a level set can help job radar allows you to monitor payments on jobs and get alerts when there are payment problems. Okay? So our data team is actually tracked when a, when a, uh, address is put in our system, our data team flags that address in scrapes, the county recorder, making sure if there’s anything of note, bankruptcy, lean being filed, anything that would be relevant to the money going into your pocket. You’re gonna know about it. Here’s what some other people have said about job radar. Here’s Joe rip.
Speaker 1 (19:02):
He’s the CEO at modular millwork. Their goal when they signed up with level set is to grow his company from 6 million in new to 40 million. And job radar provides the risk management that he needs to do. So he said level set gives me insights that the contractor and the owner seem to be paying their bills. Things are moving well and no liens are filed along. Uh, before I arrive on site to build cabinets, this gives me the information that is absolutely necessary for me to assess credit risk prior to level set. I couldn’t find this type of information anywhere. So for me, this is the perfect solution. Then Ava go took who is the regional credit manager of waste connections. She uses a job radar as a solution, not only to monitor pain on jobs, but also to get more clear on their own revenue expectations.
Speaker 1 (19:56):
She said they used job radar as an opportunity to take a deeper dive into their own AR and see it as an early warning system to take a look at potential problems. Now last but not least, it’s probably the most obvious business growth solution, but it’s also very important providing the best possible customer experience. So never underestimate the importance of satisfied customers. A happy customer will continue to use your company and even refer others to you. This means per providing excellent service and being a master of communication. It’s more important that a customer knows what they’re actually getting than selling them unrealistic goals. So this goes for the work you’re providing, like we had discussed earlier, your payment process and the requirements. So from the get go, like we talked about in, in the first step set the right expectations with your customer to ensure they’re realistic. Again, as you set these expectations, it’s absolutely critical that you meet them consistently.
Speaker 1 (21:08):
So that covers today’s topic. Now’s your chance to ask any questions. You can throw those in the chat box below. Um, really appreciate y’all all coming on today. I know I did a lot of talking at y’all. Um, and you know, maybe it’s tough when it’s not specific tailored to your business, but now’s your chance ask questions. Um, so while we’re waiting for some more questions to come in, I wanna remind you all that. You’re gonna receive a recording of the webinar via email within the next 24 to 48 hours. I’m also going to include my contact info. So if you want a customized webinar, we can talk specifically about your business. Um, I’d be more than happy to go over that to help y’all achieve your goals here. So, okay. Let’s see.
Speaker 1 (22:01):
So we got a question from Sharon. Hey Sharon, uh, okay. Most contracts I must sign with. Yes, I will. I will include the slides with the recording. Um, most contracts, I must sign with primes, have 15 plus pages on how I will get paid. How did this industry get to the point where subcontractors must finance a owner jobs? Well, that’s a good question, Sharon. Um, what I would say, uh, for that is it, it doesn’t have to be that way. Right? Um, especially with like, with the tools that, that you can have at your disposal, like materials, financing, uh, there’s ways to get, you know, around, around that feeling. And I’ve heard it before, right? Like you’re a sub you’re, you’re not a bank. And at the end of the day, leveraging lean rights is a great way to make it. So that’s not the case would be more than happy to connect with you Sharon, after discuss more in depth, what you’re dealing with specifically. Did that answer your question?
Speaker 1 (23:18):
It it’s a, it’s a tough one. Okay. There we go. So Sharon seems like the commercial construction field is being groomed to do business like this. Yeah. So you’re you’re right. Um, you know, the mom and pop values, that’s just a thing in the past, unfortunately. Um, while there’s still gonna be great people to work with who, uh, are gonna align with you in that case, we, we are gonna have to protect ourselves, um, the right way to make sure you’re not getting taken advantage of, um, as someone who, if you’re someone who likes those handshake deals. Okay. Any other questions?
Speaker 1 (24:28):
No. Okay. So if there’s no more questions or if you know, you’d rather ask me personally, um, um, I’m gonna, like I said, I’ll give my contact info to reach out, but just wanted to thank everyone again for attending today’s webinar. Again, it was a quick in general overview, but I’m happy to talk to any of you, uh, more in detail. So, um, mention already, if you want a consultation for yourself to see what, what it would look like to use level set in your business for your unique needs would be more than happy to, to connect, um, visit the website listed here or feel free to reach out, uh, if you want. And once again, keep an eye out for the upcoming construction business growth series workshop. If you want some even more in depth training. Thanks again, and everyone have a great week. Sharon I’ll reach out to you 120 days is ridiculous, um, to be waiting, to get paid. So would love to talk to you more in depth about that. Thanks. Y’all have a great week.