How to Manage a Construction Company

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Effectively managing a construction company requires excellent organizational, financial and motivational skills. The best construction managers also understand the ins and outs of completing a construction project so they can effectively schedule the project and obtain equipment. That's why construction managers are often promoted out of the field and into the office. It's quite the change of scenery, but the same dedication to efficiency and organization that you possessed on the construction site will serve you well as a construction manager.

Because there are several successful construction business models, each company can distribute duties however they see fit. Regardless of how you choose to fine-tune the construction manager's role, here are some common objectives for this position.

Making Financial Decisions

First and foremost, the manager of a construction company always has to bear in mind three words: return on investment. Well-managed finances ensure that a company can thrive and prosper, so it's important for a construction manager to weigh the pros and cons of every other decision in terms of finances. Each project has an estimated budget, and the ultimate goal would be to complete the work under budget in order to increase customer satisfaction. Budgeting and itemizing projects becomes a huge part of the day-to-day work of a construction company manager.

Bidding on New Work

Speaking of finances, the only way to bring in money is to bid on jobs or send potential customers an estimate. Construction managers can delegate this task to sales associates if there's room in the budget to hire such personnel. In that case, the manager oversees the work, provides guidance when needed and approves the final proposal.

If there's no budget for sales associates right now, it's the manager's job to get this important job done. Regardless of whether you do the grunt work of filling out the proposals each day, sending out a steady stream of bids helps keep your schedule full.

Evaluating and Hiring Subcontractors

Once you win a job, it's time to assemble your team. As a construction manager, it's crucial that you understand the entire construction process so that you not only know which subcontractors you'll need but also when you'll need them. For example, there's no point in having the electrician on hand when the site is still being excavated and leveled, but you also don't want to have the drywall installation stall because the electrician isn't scheduled to come for another few days.

You'll need to either reach out to your network of associates or post your opportunity on a bidding site to attract subcontractors. Remember that return on investment needs to remain high on your list of priorities. You need to find subcontractors that not only have the availability but also the skills and affordability to get the job done under budget. Start your search early if you hope to find this trifecta.

Evaluating and Replacing Company Equipment

As a construction company, you undoubtedly have your own fleet of trucks, heavy machinery, power tools and hand tools. As previously stated, return on investment should be top of mind, but ROI comes second when safety is at stake. As a construction manager, you need to do your part to ensure the entire team stays safe on the job, and that includes routine maintenance on all equipment. Your safety record can also affect your insurance and, of course, potentially opens you up to lawsuits.

No matter what, it's in the company's best interest to always evaluate and maintain equipment. Whether you run the safety inspections and perform the maintenance tasks yourself or delegate it to an assistant, make sure it gets done. Provide preventative maintenance to keep machines working properly, fix what can be fixed and replace what needs to be replaced. Emphasize to your site managers and team that equipment problems need to be brought to your attention immediately.

Overseeing Construction Schedules

Your organizational skills will be put to the test when running a successful construction company, as will your ability to adapt and recalibrate. A construction project completed ahead of schedule often also comes in under budget, which makes the end client extremely happy. But if you pad your bids with too much wiggle room in an effort to finish ahead of schedule, you run the risk of not winning as many jobs.

Therefore, you have to strike a balance between understanding a realistic time frame for completing the project, adding in enough buffer days and rescheduling tasks as problems occur. When managing a construction company, you have to problem-solve on a daily basis to keep projects running smoothly and on schedule.

Motivating Contractors to Increase Productivity

One thing that can eat into the project's schedule is a lack of motivation among the individual contractors working on the project. There should be a site foreman who directly oversees the workers as they do the job and can provide motivation and feedback, but as the company manager, you may need to assist in this endeavor.

It's not necessarily a matter of visiting the construction site and "rallying the troops" with a passionate speech while you pass out donuts, although it's certainly an option. Instead, you can ensure you're not asking contractors to work unrealistic shifts without adequate break time or tools and for lousy pay. What can you do in terms of scheduling, payment, equipment and other incentives to help contractors do the job to the best of their ability?

Making Big-Picture Company Decisions

As the manager of a construction company, you may also need to assist with big-picture decisions. Some successful construction business models position the construction manager at the head of the company, while others place the manager below a CEO or owner. You might even have a board of directors to answer to. The way your particular company is set up will determine whether you collaborate on these decisions or make them on your own.

But these big-picture decisions can run the gamut, from hiring new employees to establishing a marketing campaign to working only on commercial projects. Managing a construction company means not only focusing on the here and now but also looking to the future growth of the company. What can you do to ensure you build the company's reputation within the community, not to mention its revenue?

Handling Unhappy Clients

Finally, this position comes the responsibility of responding courteously to the words, "Let me speak to the manager." When your clients are unhappy, you'll definitely hear about it, but a disgruntled client doesn't have to spell doom for your company. You need to maintain a high level of professionalism when handling unhappy clients in order to problem-solve and deliver results.

There's no one higher up the rung that you can pass these clients to, so you'll need to have a sympathetic ear when your client needs to feel heard, a strong backbone to stand firm when you know your team did its best and the resourcefulness to provide an adequate solution when more than an apology is in order.

Is Managing a Construction Company Right for You?

Managing a construction company comes with a fair amount of pressure, whether it be meeting clients' expectations, juggling schedules to accommodate all kinds of subcontractors (not to mention the weather), crunching numbers to come in under budget and continuing to push the company forward. But some people thrive on deadlines and challenging puzzles. If you enjoy behind-the-scenes work but have plenty of first-hand construction knowledge to inform your decisions, you might be the perfect choice to manage a construction company.

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About the Author

Cathy Habas specializes in marketing, customer experiences, and behind-the-scenes management. Cathy has contributed to sites like Business and Finance, Business 2 Community, and Inside Small Business. She served as the managing editor for a small content marketing agency before continuing with her writing career.