In the construction industry, where projects are complex, expensive, and time-consuming, strategic planning is essential for ensuring efficient execution, staying within budget, and achieving desired outcomes.
Why is strategic planning important?
For construction business owners aiming for long-term success, staying ahead of the curve is crucial. Strategic planning isn’t just a buzzword—it’s a powerful tool to future-proof your business.
In this blog, we’ll hear from leading builders and explore practical ways construction business owners can use strategic planning to navigate challenges and seize opportunities.
Why Strategic Planning Matters
Strategic planning serves as a blueprint for your construction business. It involves setting clear goals, identifying potential obstacles, and outlining the steps needed to reach your objectives. This means anticipating industry trends, embracing innovation, and staying agile in the face of change.
Through strategic planning, you can ensure you have an outline for these key areas:
- Long-term vision
- Resource allocation
- Risk management
- Competitive advantage
- Adapting to change
- Financial management
- Understanding the value of strategic planning is essential for running a successful construction business.
“Strategic planning is vital for a custom home builder to navigate the unique challenges and opportunities in our industry,” said Tyler Farrell, president of Killowen Construction in Heber City, Utah. “Planning allows us to stay ahead of regional trends, address specific regulatory considerations, and ensure that our projects align with the distinctive needs and preferences of homeowners.”
How do you use strategic thinking to plan for the future?
Future-proofing your construction business requires a proactive approach to strategic planning. Here are some guidelines to help you get started:
- Assess Your Current Situation
Before planning for the future, you need a clear understanding of your present situation. Evaluate your strengths, weaknesses, opportunities, and threats. Consider market trends, client expectations, and the competitive landscape.
“Strategic thinking in the Utah custom home building industry involves a nuanced understanding of the local market,” Tyler said. “We carefully analyze factors such as regional design preferences, compliance with local building codes, and sustainable construction practices relevant to Utah’s climate.”
By considering factors like competition, regulatory changes, and economic conditions, you can keep your company nimble and responsive.
- Define Your Long-Term Vision
What do you want your construction business to look like in five or ten years? Define a compelling vision that aligns with your values and goals.
“I am a huge believer in writing down goals, even if they’re crazy and big,” said Meghan Billings, owner and founder of Meg & Co. Designer Homes in Twin Falls, Idaho. “Once you clarify that vision, you start to see things in a new way. You start to see how you can make it happen instead of all the reasons that make it hard.”
Your vision will serve as a guiding light, inspiring your team and shaping your strategic decisions.
- Diversify Your Services
To future-proof your construction business, consider diversifying your service offerings. Explore new markets, offer innovative products, take on different types of projects, and adapt to emerging construction trends.
“By staying attuned to local dynamics, we position our business to meet the evolving demands of the Utah market effectively,” Tyler said. “This approach enables us to incorporate elements like energy-efficient features and architectural styles that resonate with Utah homeowners.”
Diversification not only expands your revenue streams but also mitigates risks associated with economic fluctuations in specific sectors.
- Involve Your Team in Company Goals
Your employees are your most valuable asset. Getting their buy-in on company goals creates a sense of shared purpose, collaboration, and commitment essential for achieving sustainable growth and competitiveness.
“Once we have goals nailed down, we have a team meeting where we present the plan to the team,” Meghan said. “This comes with lots of questions, excitement, and sometimes slight adjustments. It’s great having that collaboration. With the vision fully explained to the team, they can make their own quarterly goals and know they’re helping us meet our goals.”
Fostering a culture of collaboration and adaptability will empower your team and ensure the success of your construction business.
- Monitor and Adapt
Strategic planning is an ongoing process. Regularly review and adapt your plan to address changing circumstances and industry dynamics. Stay attuned to client feedback, monitor market trends, and be ready to pivot when necessary.
“Once we’ve finalized our ‘playbook,’ we execute with determination, aiming for success every time,” said Gloria Flores, principal of GloJoy Construction in New York City. “Recognizing that unforeseen obstacles may surface, we maintain agility and efficiency with daily and weekly huddles where we fine-tune our strategy.”
Planning strategically for your business is a continuous journey that keeps your company resilient and ready for whatever the future holds.
How to put your strategic plan into motion in three easy steps
Here are three steps to implement your strategic plan effectively:
- Evaluate
Understand the current state of your business and identify key performance indicators such as revenue, profit margins, customer satisfaction, and market share.
- Establish Goals
Based on your assessment, determine clear and achievable goals that align with your vision and mission statements.
- Create an Action Plan
Once you have defined your goals and objectives, develop strategies to achieve them. Consider what actions, initiatives, or changes are needed to move your business in the right direction.
By following these steps and embracing strategic planning, you can navigate challenges, seize opportunities, and ensure the long-term success of your construction business.