Succeeding in the construction industry takes hard work. Construction business owners often need to overcome obstacles such as over-budget projects, difficult client demands, and cash flow issues. The companies that survive aren’t just lucky. They’re strategic about how to grow their construction businesses and their banking choices.
In this article, we’ll cover 10 ways you can level up your business strategy for growth.
1. OPTIMIZE PROJECT MANAGEMENT AND EFFICIENCY
Inefficiencies on a construction job can quickly eat away at your profit margin. This includes hours wasted, miscommunications, delayed deliveries, and incorrect estimates for materials and supplies.
The construction companies winning today treat project management like a science, not an art. Modern project management software and Building Information Modeling (BIM) tools help eliminate project hiccups. Use them to schedule resources, track progress, and identify bottlenecks before they become expensive problems.
2. DIVERSIFY YOUR SERVICE OFFERINGS
Construction companies focusing on a single service can lose revenue when that service loses its demand. But diversifying your offerings can help you avoid slowdowns when the market shifts. Smart construction companies expand into complementary areas, like light commercial work, HVAC, or electrical work. This can be done by hiring specialists in these areas or engaging subcontractors. You’ll also have more touchpoints with clients, meaning they’re more likely to return to you for each service.
3. STRENGTHEN SUBCONTRACTOR AND SUPPLIER RELATIONSHIPS
Building subcontractor relationships can facilitate faster growth and help you scale. You can strengthen those bonds by paying your invoices on time, treating workers fairly, and ensuring your needs are communicated clearly. The same rules apply to your suppliers. Like employees and subcontractors, they are essential to your success.
Mistreating subcontractors can cause project delays. Paying suppliers late can bring work to a standstill. In construction, better relationships translate into better pricing, on-time or early project completion, and higher quality work—which will improve your business’s reputation.
4. INVEST IN EQUIPMENT AND TECHNOLOGY
Modern construction equipment is faster, more efficient, and can deliver a positive return on investment by increasing the amount of work that can get done, even if the price is high.
How you invest can separate your company from its competitors. Using capital reserves to pay cash for new equipment is okay if you have a large surplus, but most companies are better off taking a construction loan for long-term project planning. This preserves cash on hand and allows you to fund a project that will make back the money.
5. MASTER MARKETING AND BUILD A BUSINESS DEVELOPMENT PLAN
Marketing and business development shouldn’t be add-on tasks for your business. They must be a regular part of your operations. Effective marketing starts with targeting your ideal customer. If your specialty is residential construction and renovations, don’t waste your efforts on commercial contracts. Many companies create customer profiles to get a better understanding of who to target. Other firms rely heavily on referrals from existing customers.
You can download an in-depth free guide with digital marketing tips to help you market your business or check out some marketing strategies for construction businesses.
6. PRIORITIZE EMPLOYEE TRAINING AND RETENTION
Skilled workers have rarely had the same job opportunities they do now. Prioritizing employee retention saves you money and ensures high quality employees will stay. Competitive compensation can’t hurt either. And remember: Every time a worker leaves, you need to recruit and train a new person to cover their job. By investing in employee training and creating retention programs, you can build a better company culture and take on more complex projects.
7. EMBRACE SUSTAINABLE AND GREEN BUILDING PRACTICES
Green construction is a priority for many homeowners and commercial real estate investors. This necessitates a different mindset for construction companies. Weighing materials costs is important, but so is sustainability. Your clients are looking for eco-friendly solutions and affordability. Your challenge is to find a balance between the two.
More importantly, the effects of climate change are not going away. Doing your part to create a healthy environment and completing projects that can withstand our new climate will pay dividends in the future.
8. BE STRATEGIC WITH FINANCIAL PLANNING AND CASH FLOW
Cash flow is the lifeblood of every company. Offering overly generous payment terms on a construction project can create cash-flow problems. For instance, if you take a 50-percent deposit on a 30-day job and invoice the remainder with net-60 terms, how will you pay your workers? Covering expenses with another job is not the best solution, but many companies do it. Effective cash-flow management starts with budgeting and financial forecasting. That includes expense tracking and taking a look at when you invoice and how.
9. PROACTIVELY MANAGE RISK AND SECURE THE RIGHT INSURANCE
Risk management isn’t a concept exclusive to financial services. Construction is inherently risky due to project delays, cost fluctuations, unpredictable weather, or even accidents. It’s impossible to know what will happen, so the best approach is to prepare as best you can. Identify potential risks and plan for the worst-case scenario, even if it’s unlikely.
Comprehensive insurance coverage can protect your assets. Your company should have general liability, workers’ compensation, and builder’s risk insurance. If something goes wrong, these safeguards ensure business continuity. The cost for keeping them in place is minimal compared to the potential losses you’ll incur if you’re underinsured.
10. ESTABLISH AND BUILD STRONG BUSINESS CREDIT
A sole proprietor may start out using their personal information to obtain loans and credit cards. That won’t work when your company grows. Larger construction projects may require a loan or line of credit that banks won’t approve for an individual. Building your business credit under a federal EIN should be a priority if you want to grow.
Timely payments on credit cards and loans aren’t the only way to build business credit. Dun & Bradstreet, one of the reporting bureaus for business credit scores, tracks payments to vendors and suppliers. They also watch your performance with lines of credit, which you can use to grow your construction business.
What could be holding your construction business back?
Most of the obstacles that can hold you back are the result of poor business decisions. Bad project management creates delays, using outdated technology and equipment makes you less competitive, and insufficient marketing makes it difficult to maintain steady revenue streams. In an economic downturn, these conditions could be devastating.
Not having skilled labor can create problems too, though that can be alleviated by offering competitive wages and benefits. Proper financial planning can make obstacles easier to overcome, but it needs to be consistent for the long-term health of your company.
Limited access to lending and inefficient cash flow are also two of the most common obstacles construction companies face. If you’re looking for a flexible, reliable banking solution, we recommend checking out Bluevine, the largest small business banking platform in the U.S.1 With Bluevine, you can access a high-yield checking account, powerful bill pay, and flexible business lines of credit all in one place.
Visit www.bluevine.com to learn more.
1. As compared to publicly available data on the number of lifetime customer accounts held by other U.S. banking platforms dedicated to small business, as of March 2025.