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Growth is Good?

February 21, 2008  |  from The Construction Contractor's Digest

Construction is different. We don't know of another industry with all the good and bad that construction has to offer. Several business characteristics are unique. A general approach can help in some areas but, hurts in others.

Growth of all types is not good. In certain areas, it is desired and growing other parts is not. What am I talking about? Growth of your employees as professionals is important. It allows benefits past a more efficient staff. Intellectual growth is important, that is, always searching and finding better ways to conduct your business. These reasons for growth are not hard to fathom.

Contrastingly, growth of revenue can be a disaster in construction contracting. To raise revenue profitably in a management intensive business is hard. Our trusted staff can only work so hard and then we have to hire unproven and untrusted new people.

Added to this, we cannot get a premium of even 5% over a like competitor. To sell more in the short term is to have to cut price to gain agreement from new customers. Cost will be the same and probably more due to overworked staff and new hires.

We are in cost side business and the greater the distance of cost from revenue, the more secure the business. Said another way, if these two business numbers are close together then the company may have one bad event and cost can quickly become more than revenue (a loss).

As Denis Waitley said, "If you are growing you are green, if you are ripe, you rot". True in most cases and most industries, but not construction contracting.


Filed: Sales-Marketing