Beyond Builders: Unveiling the Secrets of Successful Construction Companies

Sales is the function by which a company acquires revenue. Sales are critically important - without revenue, the lights aren't going to stay on very long. But commercial contracting isn't really a sales-driven industry, unlike a retail business where you need a constant stream of new sales to keep going, in construction, one or two big jobs can keep the entire company busy for months or even years...

In a sales-driven industry, the difference between making money and losing money is heavily influenced by how good your sales team is. Close more deals, make more money.

On the other hand, construction is an operations-driven industry. The difference between making money and losing money has a lot more to do with the ability of the team to plan and execute the work: a great team working on a tough job still has a chance to make a buck.

Operators

In my career I have worked with construction companies of various sizes and stages, and I've come to realize that most small and mid-size general contractors rely heavily on their leadership team, and that most construction leaders are excellent operators. The people leading these companies are "construction people" - they know how to schedule a job, source materials and trades, run a crew, push the pace, avoid constructibility issues, maintain quality, ...etc.

Intuitively, this makes sense - people who can make money in construction often realize they can make more money working for themselves and go off to start their own business. A big challenge for many of these operators is that the sales and marketing side of the business doesn't come naturally and they struggle to consistently find good projects. This lack of skill in acquiring new revenue impairs the ability of the business to grow. Worse yet, operators are often blind to this gap in their skillset.

This leads to operator run companies having a reputation in their local markets as excellent builders and are able to generate decent profits year to year, but they often struggle to grow beyond a small footprint.

Rainmakers

There is another type of construction leader that I call a rainmaker. Unlike operators, sales come naturally to rainmakers - they are out there networking, uncovering leads, and closing new business all the time. Rainmakers make it rain and companies led by rainmakers never have a shortage of new work coming in, which is great - except that most rainmakers aren't very good operators. In a lot of cases, they aren't construction people at all... they came from a different industry entirely and stumbled into contracting.

As an operations focused industry, having a rainmaker leading the way unchecked can cause all kinds of downstream problems like taking on more projects than the business has capacity for, entering into bad or risky contracts, or failing to pay enough attention during the execution of the work.

Rainmaker led companies tend to be flashy with signs all over town, but when you ask their clients about the quality of their work - the answers aren't always glowing review. These companies are also far more likely to end up going broke.

Unicorns

It doesn't have to be one or the other though - the best companies are those led by both an Operator AND a Rainmaker. The Rainmaker brings in the work, and the Operator ensures the work is well executed. Furthermore, it doesn't have to be two different people, many of the best companies have a leader who has both sets of skills. I call these people unicorns because they are so rare in construction.

There are far more operators out there than rainmakers. The good news for great operators is that its easier to sales skills than it is to learn to be an operator and the set of sales enablement tools out to make it easier is growing by the day.

Pursuit Zen is one of those great tools for improving sales outcomes. Submitting personalized proposals greatly increases the likelihood an owner will select you for their project. If you are using boilerplate sales materials, upgrading to customized content is an easy way to increase your win percentage.

For more ideas on how to find leads, win more projects, and generate higher profits - sign up for our email newsletter and get new, actionable insights delivered to your inbox!