In a popular Entrepreneur article, the writer calls the “working hard versus working smart” debate a myth. He then goes on to bluntly ask, “Why aren’t we doing both?” This is a question that’s especially relevant to the construction business. Which then raises another question: what is the key to building a successful construction business? Hard work or smart work?
The Challenges Of Running A Construction Business
The construction business is one of the hardest businesses to manage, run, sustain, and earn consistent profits from. One reason is that these companies are constantly struggling to keep costs low due to increased personnel costs and rising material costs.
Stagnant productivity levels are another major challenge in construction. Many other industries – notably agriculture, technology, and manufacturing – have increased their production levels over the past few decades. However, productivity levels in construction have not quite kept pace.
The slow adoption of technologies such as automation, Artificial Intelligence, etc. is one driving factor. Another is ongoing labor shortages, particularly of skilled workers, and workers specializing in certain niches. More recently, the COVID-19 pandemic and its impact on labor availability and supply chains have also contributed to productivity problems. These problems will take a while to go away.
Worker safety is also an ongoing issue plaguing the construction industry. Workplace accidents, injuries, and deaths continue to happen, further increasing costs and hitting productivity levels.
So how can construction businesses address these challenges? By working hard or by working smart?
According to one survey, about 21.2% of construction companies fail within five years. This number places the construction industry in the Top 10 list of failure-prone industries. The only way these companies can avoid this fate is by working hard and by working smart.
Why Working “Hard” Is One Key To A Successful Construction Business
To build a successful construction business, owners and management need to overcome the challenges highlighted above. And for this, hard work is not optional. Here’s why.
Their efforts should start by putting together a solid business plan that establishes the company’s goals and objectives. They should also understand their tax responsibilities and ensure that they meet them. Legal and regulatory compliance is also crucial in construction. This means getting all the necessary licenses, permits, and registrations, and also understanding which laws and regulations apply to the industry and business.
Finally, construction is a resource- and funds-intensive industry, so it’s crucial to secure the financing required to establish and run a business. Further, we saw earlier that construction is a hazardous industry, so these companies must also invest in safety equipment, implement safety procedures, and purchase insurance.
All of these activities require sustained effort and hard work, without which a construction business is doomed to failure. And yet, hard work is just one key to success in construction. The other is smart work.
Why Working “Smart” Is The Other Key To A Successful Construction Business
If hard work is all about blood, sweat, and tears, smart work is about good choices, sound judgment, and impartial analyses. As we have already seen, hard work is a crucial success factor in construction. But smart work is equally critical.
Anyone aiming to set up a construction business must research their local market. They should understand their potential customer base and get a handle on how many competitors are already operating in that area. Knowledge of these aspects can inform the company’s business plan and reveal what the company must do to gain a competitive edge.
Business owners must also build a great team. This means hiring skilled tradespeople, as well as experienced engineers, draftsmen, project managers, and planners. Leaders must lead and mentor their workforce, while also managing the business and its projects, customers, and funds. Finally, they must get involved in industry trade associations and network with other companies and professionals to bring in more business for the company.
The success of a construction business depends on doing all of the above – and doing them in a smart way. Advertising and marketing, lead generation, budgeting, accounting, customer relationship management, and customer service are also vital to the company’s growth and success.
To get these aspects right, the organization must invest in the best people, tools, and technologies. Such investments require owners and leaders to be hyper-organized, analyze the available options, and make data-driven decisions. In short, they must work smart.
Conclusion
Only hard work alone cannot guarantee the success of a construction business. But neither can only smart work. But together, they can increase the chances of success. Hard work focuses on effort while smart work focuses on outcomes. In the modern hyper-competitive and challenge-prone landscape, construction companies need to focus on both. They must put in the effort while keeping an eye on projected outcomes. That’s why they need to work hard and work smart.
