When you manage a construction firm, your company’s profits, legal standing, and reputation all depend on your ability to coordinate the dozens of elements involved in each project. The occasional bump in the road is inevitable, but by following a few practical managing tips for construction firms, you can keep those bumps small.
Nurture your relationships
When you have good relationships with your subcontractors, suppliers, and property owners, you will enjoy more open communication and collaboration. Those involved in the project will be more likely to bring up minor issues before they become major problems and have more patience if the project hits a snag. Be a friend by reaching out to pass along useful information or valuable opportunities. To ensure no one who approaches your company leaves frustrated, teach all your staff the basics of supportive customer service and instruct them in how to handle complaints.
Take time with your contracts
Clear wording goes a long way toward preventing disputes and legal action. Review your standard contract and make sure it contains clauses designed to protect you, such as entire agreement and non-waiver/exercise of rights clauses. Often overlooked are escalation clauses. These address situations in which a subcontractor can pass increased costs to the general contractor, or the GC can pass them to the owner. Without these clauses, cost increases can eat into your profits. Thoroughly review the contract with your client before it is finalized. If there is any confusion or hesitation on the client’s part, be willing to re-negotiate and draw up a new contract.
Switch to managerial accounting
Financial accounting helps keep you on track with your taxes, but does nothing to advance your business. Managerial accounting focuses on collecting financial information that allows you to make better decisions about how to run your company. It involves tracking multiple metrics, including controllable and non-controllable costs, variable costs, and opportunity costs. The information gleaned helps you assess your performance, moderate your risks, and strategize for future growth.
For more managing tips for construction firms, contact us at Construction Monitor.