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8 Key Components of a Successful Construction Business

Wondering why your construction business is becoming less and less profitable year by year? Or maybe you just want to know some proven ways to maintain your business' success?

Here are some of our best tips for creating a repeatable success in your construction business from our experience working with more than 950,000 construction professionals world wide:

1. Effective Team Management

Team management involves coordinating all members of your team to execute their respective tasks. 

Good team managers can clearly communicate what is expected of each employee at every stage of a project to ensure that the project progresses efficiently, without any schedule slippage or financial pitfalls, and to ensure that team members have more confidence doing their responsibilities.

Tips for Effective Team Management:

  • Communicate clearly and transparently so that no one has to question what they should or shouldn’t be doing
  • Give team members due dates for important tasks so that they have a clear end goal to work towards
  • Keep track of what tasks your employees are doing on jobsites so that you know when each project is progressing nicely or falling behind. An ideal way to do this is to use task management software specially made for construction projects.

Make sure your construction business is successful by ensuring each and every project is successful with our Free Project Scorecard Template:


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2. Staying Organized

Staying organized in regards to construction projects means good file management, good financial tracking for individual projects, keeping up with important deadlines, and mainly centralizing and categorizing all aspects of a project so that all relevant team members can quickly and easily access them.

It can be difficult to keep all of your ducks in a row for each construction project, but staying organized throughout the life cycle of a project ensures your company remains profitable.

Tips for Staying Organized:

  • Utilize a project management software for ideal organization capabilities
  • If you’re relying on Excel spreadsheets and Word documents, organize related files into folders to keep the project more manageable
  • Have a system in place for clear communication with team members to keep everyone updated on recent project updates

If your construction business regularly does multiple ongoing projects at once, check out our article How to Manage Multiple Construction Projects Simultaneously.

3. Establishing Repeatable Systems

When you’re in charge of multiple employees with different responsibilities working towards the same goal, having repeatable systems in place for the different facets of construction projects is non-negotiable to ensure the success of your business.

Establishing systems that you and other project managers can replicate without hassle makes project success repeatable which leads to your business’ overall success.

Tips for Establishing Systems:

  • Document important processes in a shared document so that everyone can access it and know what to do
  • Include protocols for when projects don’t go as planned like documenting weather or delivery delays that will lengthen the project timeline
  • Use software to help your team out with completing processes like estimating, change order, submittal, and RFI software


4. Accurate Financial Tracking

It’s hard to call your construction business a success if you’re constantly losing money. That’s why accurately tracking project-level and company-wide finances is a requirement for having success in your construction business.

If you don’t have a way of keeping a detailed breakdown of your company finances, you risk having inaccurate financial data that will need to be corrected, going over budget on each of your projects, experiencing stress and a larger workload come tax time, and ultimately losing profits as a company.

Tips for Financial Tracking:

  • Use an estimating software to create initial bids instead of relying solely on spreadsheets for more organized and accurate financial reports
  • Create project-wide and company-wide financial reports for a more holistic view of your finances
  • Break down costs by resources, materials & labor, change orders, and other areas for a more detailed and comprehensive understanding of finances. To ensure your construction business is protected from unexpected legal and financial risks, it's essential to have the right insurance coverage. For instance, securing commercial insurance by ContractorNerd can significantly reduce potential exposure to lawsuits and associated costs. Proper insurance not only safeguards your business but also enhances your reputation and credibility in the industry.


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5. Planning for the Future by Learning From the Past

It’s hard to plan for the future of your construction business if you can’t learn from past mistakes and successes, or any type of business for that matter. Being able to see what worked well and what didn’t in the different areas of your business could mean the difference between becoming a more profitable and credible company, or putting up the “Going Out of Business” sign.

That’s why it’s important to look back on your business in terms of profitability & finances, meeting deadlines, team performance, and more to learn how you can better prepare for the future of your company.

Tips for Planning for the Future:

  • Keep financial data organized by year so that you can see how your business has performed year-to-year, including change orders, client selections, budget overages, and more
  • Have a way of tracking team performance year-to-year so that you know who is helping or hurting your business
  • Track your team’s ability to stay on schedule year-to-year so you know what needs to be addressed in future project deadlines
  • Track your team’s communication performance so that you know how your business can identify and improve upon any communication pitfalls

6. Protecting Against Litigation

Protecting your construction business from legal trouble is important for your reputation, credibility, and your profitability, all of which contribute to the success of your business.

If you regularly find yourself involved in lawsuits because of miscommunication with clients, neglecting to get necessary permits before a project starts, or undocumented changes to the budget, you already know the importance of protecting your business from unexpected lawsuits that cost you time and money.

Tips for Protecting Your Business:

  • Implement good document management so that you have something to reference when questions arise, including permits, inspection reports, change order approval contracts, submittals, RFIs, changes to the budget, photos, etc. 
  • Notify relevant people about important changes and documents via email and text so that everyone who needs to be in the loop knows exactly what’s going on
  • Ensure you have the right insurance coverage in place to reduce your potential for legal and financial exposure



7. Clear Communication

Making sure your team has great communication and collaboration skills ensures your construction business runs efficiently and remains successful year-to-year. Otherwise, you run the risk of projects falling behind schedule, going over budget, and worst of all losing profits, costing your construction business to be less successful overall. 

According to the Project Management Institute (PMI), poor communication is the primary reason why one third of construction projects fail. To avoid being part of that one third portion of businesses with failing projects, it’s crucial that everyone on your team has good communication and collaboration skills and an effective medium of communication.

Tips for Better Communication:

  • Use one centralized messaging system instead of relying on different text and email threads that can easily get lost in the shuffle
  • Be detailed and transparent when communicating with your team and clients so that there are no questions or potential legal consequences, including attaching files and photos to your messages when relevant
  • When you have important phone calls take notes or create call logs so that you don’t rely on your memory for crucial details

8. Using Technology to Your Advantage

If you’ve ever tried juggling hundreds of spreadsheets and documents that include vital project information and tried to sift through everything to track down one specific piece of information, or if you’ve ever tried to handle communication with ten different people via text messages, Slack messages, or emails, you know the hassle and mental energy it takes to do project management without the help of software.

In fact, in our decades of helping construction firms, we’ve even encountered several construction professionals who have expressed to us just how much money they were losing while trying to handle business operations manually instead of with the help of an automated software.

With a project management platform like ConstructionOnline, you can ensure the success of your construction business with financial, scheduling, project tracking, communication, and team management tools that will make sure each of your projects is profitable and will consequently ensure your business is profitable.

Tips for Using Technology:

  • Find a project management software specific to construction projects for more relevant tools like change order tracking, client selection management, RFI tracking, submittal tracking, project logging, cost codes, and more
  • Use software that includes project overview dashboards so you can see at glance how construction projects are performing
  • Use software that includes accurate financial and estimating tools to keep track of profits and to keep important financial data organized and easily accessible
  • Use software that includes file management tools so that every permit, report, photo, contract, drawings, and any other type of construction document is organized

You can see a live demo of all of these features and more by booking a free trial with our product experts today:


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If you enjoyed this article, check out our article 6 Ways to Accurately Measure Construction Project Success to help each of your construction projects be more successful than the last and ultimately have a successful construction business.