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6 Warning Signs Your Construction Operations are Stalling—And How to Break Through

6 ways to navigate

Growth is a positive sign for any business, especially for construction companies where expansion means more projects and larger contracts. However, with growth comes the challenge of scaling operations effectively. In this article, we will explore seven key indicators that your construction company is expanding and provide actionable insights on how to adapt, including strategies for investing in more fleet, software, and managing headcount to mitigate labor shortages.

The insights from this article come from a recent interview featuring RentalResult’s Customer Success Manager, Jimmy Wilcock, and Kurt Olsen, the Director of Logistics at Big D Logistics. Their discussion sheds light on how to identify and adapt to signs of growth in the construction industry.

1. Frequently Re-renting Equipment

If you find yourself frequently re-renting equipment, it might be time to consider expanding your fleet. Kurt Olsen, Director of Logistics at Big-D Logistics, points out, “We use our re-rental dollars that we’ve had to pay out and calculate what we could look at as far as additional spends for those certain pieces of equipment.” Re-renting indicates that your current inventory may not be sufficient to meet demand. To adapt, regularly review re-rental costs and evaluate if purchasing new equipment is more cost-effective. This ensures that you have the necessary equipment to meet project demands without relying too heavily on external vendors.

2. Operational Efficiency Challenges

Meeting customer expectations is crucial for any growing business. Kurt Olsen shares, “We take a hard look at that and say, okay, are we meeting the expectation of the job site and being able to get the equipment there on time and on the right day?” If you notice that operational inefficiencies affect your ability to meet deadlines, you need to make changes. To adapt, introduce process improvement initiatives and technology solutions to enhance operational efficiency. In construction, this could mean investing in fleet management software, optimizing supply chain logistics, or improving communication between project teams and suppliers.

3. Lagging Behind in Tech

Technology plays a pivotal role in enabling growth while maintaining or even reducing headcount, especially in the construction industry where labor shortages are common. As Kurt Olsen mentions, “Adopting some of the apps that RentalResult and your group has offered us actually helps us keep headcount down.” When businesses grow, adopting technology can help manage increased demand without overwhelming existing resources. To adapt, evaluate and adopt new technologies that can automate or streamline operations for efficiency and growth. This might include project management software, mobile applications, fleet tracking systems, or equipment maintenance apps.

4. Increased Turnover and Demand for Products or Services

Increased turnover and contract volume are clear indicators of a growing construction business. As Kurt Olsen notes, “We are looking at how many turns and contracts we’re doing per day.” As demand increases, businesses must adjust to handle the additional volume effectively.

To adapt, implement robust order management and tracking systems to manage increased demand. This ensures that you can keep up with orders, fulfill customer expectations, and manage supply chain logistics efficiently, all of which are vital in construction.

5. Need for More Space and Resources

Space constraints or resource limitations can indicate the need for physical expansion. Growing construction companies often require more space for operations, inventory, or customer interactions. Kurt Olsen highlights, “Would it be better served to continue to re-rent? Or would it be better served to go ahead and put a brick and mortar facility in that location?” To adapt, assess the need for additional facilities or resources to support ongoing business growth. This might involve expanding existing facilities, opening new locations, or investing in new equipment or technology.

6. Customer Feedback Indicates Growth or Issues

Customer feedback is a valuable indicator of growth or operational issues. Kurt Olsen explains, “We want to make sure that we get it as quickly as we possibly can.” If customers frequently inquire about service delays or missing products, it’s a sign that your operations need adjustment to handle increased demand. To adapt, listen to customer feedback and use it to inform operational changes. Implement systems to monitor customer inquiries and address recurring issues promptly, enhancing customer satisfaction and retention.

Conclusion

Recognizing the signs of a growing business is crucial for sustained success in the construction industry. By understanding and adapting to these indicators, businesses can position themselves for continued growth and profitability. Implementing the strategies outlined above will help you align your operations with your growth objectives and thrive in a dynamic business environment.

Experiencing growth stalls? Discover how RentalResult can help you streamline your operations and overcome challenges. Click here to learn more and transform your construction strategies today!

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