Some of the builders that make it past the five-year mark go on to become multi-millionaires. Others continue on the hamster wheel constantly chasing cash flow.
As it turns out, there are quite a few traits that successful builders share, and it isn’t just the amount of money they’ve made.
In this article, we’ll reveal why some builders become multi-millionaires while others are left trying to figure out what they are doing wrong, as well as giving you the sales process they are using to dominate their market.
If you are serious about succeeding in business, then passing the million-dollar mark is a pretty good benchmark.
What follows are seven of the most common traits we’ve found in successful building companies. So if it works for them, it may work for you too.
Starting and running your own building business is just like starting any other type of business. You start with an idea, then you create a business plan based on that idea, and then start executing those plans to bring your ideas to life.
When you start your own building business, it should take more than an above-average building skill for you to be able to get your business to succeed. So what does it take to become a successful builder?
The Dream Big and Have a Strong Work Ethic
Firstly, successful builders see the possibilities beyond the immediate future. They look to scale their building company. Nothing holds them back. Obstacles and setbacks are just potential learning experiences.
They have big goals, and truly believe that they will turn their vision into a reality, even if it means stepping out of their comfort zone.
Turning a vision into reality not only takes hard work, but it also takes drive, ambition and total belief.
But there’s something else you don’t always hear about…and that’s the ability to step out of your comfort zone.
The ability and confidence to sail forward into unchartered waters after experiencing success is a very rare quality but one that is essential for a builder to move forward at speed, towards a goal. Looking for home builders? Look no further! MJS Construction Group has you covered.
They Choose Their Niche Strategically
Secondly, successful builders don’t take on any job they can, and they work strategically within a niche.
Usually, they’ll start by looking at the work they have been doing over the past 24 months and analyse the net margins. That’s important, it’s not the gross margin that’s crucial, but the net margin, after fixed costs have been applied to the job.
Once they know which jobs are the most profitable, they target that niche and become the authority in that area.
When researching this subject, we came across some interesting stats:
- 63% of builders admit their company does not have a competitive advantage
- 59% of builders have no idea who their ideal client is
- Only 11% of builders have looked at their previous jobs to discover a good niche.
Seems pretty surprising, right? You’d think that the owner of a building company would be interested in doing more of the work that makes the most money rather than taking on just anything.
That, however, is why some builders make it big. They think differently. They see opportunities and jump right into them. That might mean, however, that the market they’re going into isn’t the one they are passionate about, such as ‘architectural homes’. But they do end up living in a luxury home rather than just building them for other people.
Successful Builders Have A High Tolerance Of Risk And Failure
Successful builders also have a high tolerance for risk and failure. Failure is a constant feedback loop. Every time you fail, you’ll learn something.
To be a market leader in any business, you have to be willing to take big risks that might fail. You have to be able to get back up after getting knocked down and use what you’ve learned to grow and keep moving forward.
One of the biggest risks any business takes is investing in marketing. Every new advertising campaign is a bet. Most bets result in losses, but when an advertising bet pays off, it can then be scaled up, and that means big returns.
When you advertise your building company, test your campaigns with small bets. Measure the success by keeping a close eye on your lead acquisition costs. When your cost per acquisition dips below your earning per lead, then you are in a great position to scale up a building company.
Have you tried a different advertising strategy lately? Maybe now is the right time to set up a Facebook campaign or run an advert on Google Adwords.
They Are Self-Disciplined And Delay Gratification
Self-discipline is another extremely important and common trait among successful builders.
A disciplined business owner sets their sights on a big goal, then figures out how to reach that goal. Disciplined people are not easily sidetracked. They could be shown a hundred different ways to grow their business and only select one or two that are best suited to their strengths and the market they operate in.
The opportunities a builder says no to can be even more important than the ones they pursue.
They Develop Their Sales And Marketing Skills
Although they might not be the person implementing the marketing strategies or making the sales in their building company, all successful builders have developed their sales and marketing skills over time. Without a high-level understanding of how sales and marketing work, it’s almost impossible to successfully manage a team and hold them to account on their performance.
Most builders are not natural salespeople. Most builders would rather spend the weekend painting a house with a toothbrush as opposed to sitting in a display home.
But with a process in place, signing a building contract becomes a natural part of the whole experience. It also allows successful builders to scale up their building company quickly while keeping their finger firmly on the pulse of the business.
So let the market tell you what it wants. A lot of builders want to build. They think, “I can build anything,” but they end up with very little work. Success is the complete opposite, identify the need and create a marketing strategy to fill that gap.
Once you’ve done that, learn from the marketplace. The more time you spend speaking to clients in a particular niche, the more you’ll understand their fears, concerns and pain points. Once you understand your ideal client, the easier it becomes to speak to them directly in your advertising. At MJS Construction Group, we offer a wide range of home builders Melbourne.
And when you know who your ideal client is, targeting them becomes so much easier. It also allows you to repel the leads you are not interested in speaking to, the time-wasters and price-checkers.
They Don’t Waste Cash
The majority of successful builders aren’t taking every dollar they earn out of business to fund their lifestyle.
The successful ones are acutely aware of the volatility of the residential market and are always focused on building the company reserves before drawing dividends.
The main reason for the average building company only lasting 3.6 years is because they run out of cash during an economic downturn. While a typical business will aim for three to six months cash reserves to cover outgoings, a building company requires enough cash to cover twelve months of expenses PLUS all current creditors and the WIPAA liability.
Reaching that figure takes self-discipline and determination, but once achieved, you will never chase cash flow again. Instead, you will see opportunity in both boom times and recessions.
They Understand Their Financial Reports
And finally, every successful builder, and by that, I mean a multi-millionaire builder, understands their financials.
Not only that, but they also read their financial reports every month. For a building company that means the work in progress calculation must be calculated on the last day of each month and entered into the accounts. Without it, Profit & Loss is a mess.
So successful builders understand their work in progress, workflow, current liquidity, net margins, gross margins and expenses every single month of the year.
Better information leads to better decisions.
They Use A Proven Sales Process
A sales process lays out a clear path for taking a new enquiry through to contract. It eliminates the time-wasters early on and allows you to save time by only working with serious clients who are ready to build.
By following a process, you can tailor your proposal to a client’s specific pain points, effectively positioning your company as the only viable option for the client, eliminating your competitors and ensuring your margin is protected.
Below Are Things That Will Help Contribute To Your Success As A Builder
Maintain Your Control
Issues that often occur on business sites Which can make a builder sad.
Like bad weather and Wrong RawMaterial.
There is no benefit in losing your temper in such a situation. Rather there is a loss. That is why you should maintain control over yourself.
And all the management of weather accounting should be done in advance. And instead of being hyper when the wrong material arrives.
That material should be returned in time.
It seems minor to hear all these things. But these small things and a builder’s reaction to them. In the market, his credit and his progress are very impressive.
So that’s why to stay in control at all times. So you have got these six tips related to becoming a successful builder. We hope that all these tips will greatly benefit you. And help you become a better builder.
Mishaps are inevitable (especially with unpredictable weather) and sometimes really frustrating to someone who runs a business. The way to overcome this is to be in control of the situations you can control. When the wrong supplies arrive on-site, for example, handle the situation with calm – call the supplier immediately and tell them they sent the wrong stuff. Being in control also means being responsible. When things go wrong, take responsibility and start finding a solution to help alleviate the problem.
Understand Good Time Management Skills
When you run a successful building business, oftentimes you have little to no idle time in between projects. The less time you have for rest, the more stressed you are – and no one wants to hire a stressed-out builder. This is where time management comes in.
The first step to time management is to know the difference between what is urgent and what is important – not everything urgent is important, and not all things that are important are urgently needed. So how do you categorise your projects? How do you know which ones to prioritise?
Another way you can have a little bit of free time is to learn how to say ‘no’. You don’t have to take up every opportunity that comes in through the door. More projects might mean more money but think about the quality of your work if you have 8 to 10 projects to finish in a limited span of time. A better reputation will help secure those important jobs in the future.
Successful building businesses usually have more pressure on them as they have more projects to manage. As there are more projects to handle, the pressure comes from finishing them on time while maintaining good quality with the finished project.
If something doesn’t go according to plan, pressure builds up. Overcoming a struggle will define your limits as a business and as a builder. The higher your limits, the easier it is for you to overcome pressure in the future.
Customers Respect You
A successful builder is a respected builder! Customers respect a good builder as they have the proper working etiquette – they are experts in their field, and they are professional about it. But what makes a builder a “professional”?
Professional builders do not chase after customers, and rather, customers chase after them as they see how good the builder is in doing their job. If your customers respect you, there is a big chance that they will recommend your services to others as well.
Your Team Is Your Strength
Having the perfect team is one of the keys to a successful building a business. But what makes a great team? A great leader.
A strong leader sets a clear goal for the team and the company and is the person who makes the rules that the team should comply with. The leader has to make sure that each member of the team knows and is clear about the goals that have to be met.
Every company has a set of rules that each team member has to comply with, and these rules determine the kind of culture an organisation has. When the entire team follows what their leader says wholeheartedly, a perfect team is born.
When starting a building business (or any business), there has to be a system that outlines the different processes within your company. Systems are made as a guide for each employee, so they would know what to do in certain situations.
Your company’s system should be made clear to each member of the staff as this will help them work more effectively and efficiently. Think of it this way, if you don’t follow a system in your company and you just let your team members do as they please, wouldn’t that create disorder in the workplace?
Systems are progressive, and for as long as your building business is still running, you will make certain changes to the system in order to correct the flaws that you see in it.
Having the perfect team, a good working environment and, of course, a strong and determined leader is the key to having a successful building business. If you have been following the six steps above, chances are you’re on your way to building the right frameworks for a successful business. If you’re starting your own building business, be guided by the steps above, and you’re bound to succeed in no time.Check out our range of Melbourne home builders for your dream house.
Talents of Successful Builders
Here are the talents that shape the behaviours, guide the decisions, and influence the responses and actions of successful builders:
- Confidence: People with Confidence accurately know themselves and understand others.
- Delegator: Delegators recognise that they cannot do everything and are willing to contemplate a shift in style and control.
- Determination: People with Determination persevere through difficult and seemingly insurmountable obstacles.
- Disruptor: Disruptors exhibit creativity in taking an existing idea or product and turning it into something better.
- Independence: People with Independence do whatever needs to be done to build a successful venture.
- Knowledge: People with Knowledge constantly search for information that is relevant to growing their business.
- Profitability: People with Profitability make decisions based on the observed or anticipated effect on profit.
- Relationship: People with Relationship possess high social awareness and an ability to build relationships that are beneficial to their organisation’s survival and growth.
- Risk: People with Risk instinctively know how to manage high-risk situations and make decisions easily in complex scenarios.
- Selling: People with Selling are the best spokesperson for their business.
Your Best Chance for Success
Our research indicates that starting with self-awareness gives you the best chance for success.
The builder’s talents don’t address every factor that affects a builder’s success. But they explain who you are, what you can do and what you believe you are meant to do.
The assessment and blueprint can also help you make a plan, build better teams and predict your future in whatever uncharted territory you decide to explore.