This is the second in a series of articles on construction financing that Masonry Design has planned with CreditSuppliers. Look for part three in a future issue.
By James Nielsen,
Esq., CPA, founder and CEO of CreditSuppliers
It’s no secret that the recession hit the construction industry hardest. Almost a decade later, years of uncertainty are giving way to growth and increased demand. Construction starts were projected to increase by six percent in 2017. Competition levels are higher than they have been in years and contractors are eager to hire new employees.
Stone and the craftsmen who work with it are considered pricey, but as demand and budgets for both commercial and residential construction continues to increase, so will the need for skilled masons.
According to IbisWorld, the United States’ 89,000 masonry businesses employ almost 210,000 people, and the industry is expected to grow 15 percent by 2024. Industry growth is wonderful, but is your business prepared to adapt as the market for masonry services grows?
Set your business up for success with a financial management strategy that allows you to invest in business growth.
Create a long-term plan
Start the planning process by identifying your long-term business goals. What do you need to do this year to push your business to where it needs to be in five or 10 years? Start by looking inward—determine your business’s strengths and how you can leverage them. Maybe you should focus on commercial versus residential projects, or vice versa. Maybe you need to hire another employee or refine your bidding process to position your company for more wins.
After determining an internal goal, take a look at the market to see where you can take advantage of external opportunities. You may be able to increase your contracts with existing customers, ramp up networking and marketing to acquire new customers or take advantage of competitors closing to expand your market share.
Goals should be measurable so you can easily track performance. For example, you could choose to work toward hiring two employees, completing two additional projects in a specific vertical or increasing profits by 10 percent in a year.
Match your financial strategy to your goals
It is important that your financial goals align with your business aspirations. After all, you are not likely to get far if you do not have the capital in the first place! An analysis of your finances will make it easier to create more realistic goals. Determine what financial changes are necessary—and doable–to start moving down the path to growth. These changes can include hiring employees, increased investment in equipment or adding projects to your usual quota.
Consider utilizing a financial partner to help you reach these goals. Project management software can be an effective way to organize and streamline your project management strategy. Additionally, financing from a third party can help offset some of the costs associated with growth by freeing up your working capital.
Execute your plan and evaluate performance
As you carry out your plan, it is important to periodically evaluate your adherence to each goal. Are you on your way to fulfilling your plan and—more importantly—are your finances in order in a way that will get you there?
Setting benchmarks along the way assists in the creation of day-to-day tactics that contribute to the larger plan. Checking in on your alignment with tactics at each benchmark will help you be more flexible if you need to adjust your approach.
Reassess your long-term goals each year to ensure that they are still realistic and achievable. Goals and business priorities can change over time, and that’s ok. However, it is important to reorient your business around a common goal to track performance.
Growth happens over time—and it certainly takes a lot of work to get there. The definition of success can be different for each business owner–it is not always defined as millions of dollars in revenue. The majority of masonry businesses employ fewer than five people, meaning that hiring one or two employees could make a huge impact. Take advantage of your business’s potential with a sound strategy, smart financial planning and a system to hold yourself accountable to your goals. The masonry industry’s continued growth depends on you!
About the Author
James Nielsen, Esq., CPA is the CEO and founder of CreditSuppliers.
James combined his backgrounds in law, accounting, construction supply and venture capital to found CreditSuppliers, a financing platform that provides project funding to contractors and subcontractors.
James earned his Bachelor of Science and Master’s Degrees in Accountancy from Brigham Young University. He earned his Juris Doctorate at Arizona State University. He is currently a CPA and an active member of the Arizona State Bar.