learnables

4 Steps to Success: Business Development for General Contractors

By the team at Buildr, November 2, 2021

Part 1

If business development for general contractors looks night and day than it did a decade ago, just wait till you see how indistinguishable it will be in the coming decade. You've likely heard the projection that 41% of the construction industry—primarily in managerial roles—is due to retire. This is part of the reason why a search for "business development construction" on LinkedIn's job page will provide you with 40 pages of general contractors eagerly looking to bolster their futures.

With so many business relationships relying on longstanding repeat business (over 80% for most firms; 90%+ average for our partners) technological advancement in the last 20 years sidestepped customer-relations and took off in the realm of the (literal) nuts-and-bolts of project management. This paved the way for the flying successes of the Autodesks and Procores of the world (you may have heard of them).

It wasn’t until a global pandemic that we all collectively realized how vulnerable we were and how we had to become experts on subjects like supply chain disruption, the importance of diversified project portfolios, and the subtly disarming nature of a dog in one’s Zoom background.

We also learned that relationships didn’t need to be in-person to still be interpersonal. The general contractors that found the most success in 2020, and will continue to do so moving forward, are the ones that

  • are the most agile and adaptable;
  • forecasted pipeline to cover themselves and keep their crews intact;
  • the ones that adopted tech to fill in the gaps emphasized by the pandemic.

For reasons of discovered convenience for both sides, it’ll be a hybrid approach from here on out. Of course, Covid-19 didn’t cause the change so much as it accelerated what was already on its way.

In Part One of our multi-part series on business development, we're digging into some high-level strategies to set your teams up for success. Our goal is to help you find your footing in the increasingly unknown future of construction relationships.

Step 1: Focus on systems, not goals.

For some GCs, hiring for a previously non-existing position requires a bit of faith that the team or individual will “figure it out.” It means potentially under-paying the under-experienced. It’s the fruit of the labor of those under-experienced that will be the propelling force in both the future of the company and their personal career advancement. If it doesn’t work out, it was an expensive diversion and trying again will have less oomph behind it: “Maybe we just go back to the not-focusing-on-sales thing.”

The key is to do everything possible to empower your business development team. It’s deciding on a timeboxed goal (quarterly, annually, 5 years—it's your call), strategizing a system to achieve that goal, then not fretting about the goal again. Business development, and symbiotically marketing, is a long-game strategy akin to a marathon. It takes accumulating data, and then making careful projections based on that data, before dramatic actions are appropriate. Setting both short and longterm key performance indicators (KPI) are necessary to stay on track, and performance on the short will influence whether the longer ones need to change. Bricked quarterly KPI's foreshadow longer term KPI's needing a readjustment.

James Clear’s Atomic Habits posits that we set goals incorrectly. For example, both teams in the Super Bowl this year will have the goal of winning, yet only one will. So what good are goals? It’s the systems in place to reach those goals that actually matter and the team that will win the Super Bowl will be the one that figured out the best system (even if you’re reading this in 2026, it’s whatever team has Tom Brady).

The following data is from a Stambaugh Ness survey of 2021 business development empowerment priorities voted on by members of AEC firms, in order of most to least voted on. They’re a good compass for your own firm when it comes to where to empower BD team members with systems:

28% Establishing direction

25% Creating/budgeting time

22% Providing training

20% Implementing accountability

5% Developing incentive program

It’s worth noting that the role in question is the seller-doer, hence the 2nd place emphasis on figuring out the way the BD team member(s) manage their time. Singular hat-wearing BD team members won’t have to worry about time management to the degree of their multitasking counterparts.

Empowerment techniques won’t look the same across the board and the annual construction volume and growth goals of individual general contractors will differ dramatically.

Step 2: Seeds need nurturing.

To some construction vets, “sales” is a dirty word. This line of thinking has inevitably led to stunted company growth for one obvious reason: how could a business in a capitalist economic system reach its full potential if increasing sales isn’t an explicit goal?

At its core, demonizing sales is wholesomely-intentioned. The modern construction industry was built on handshakes that evolved into full-blown friendships; business had always been about remembering clients’ kids’ names (best of luck if Elon Musk is your client) and playing rounds of golf before the holidays without so much as a mentioning of work.

It’s been said that the best salesmen are the ones you can’t tell are even selling anything. Perhaps there was a time where general contractors didn’t realize they were "selling" anything (or perhaps we’re being the wholesome ones now). Either way, sales is here to stay, and the contractors that prioritize empowering their sales teams are the ones whose growth will squeeze out their competitors who do not.

Pro tip: As a euphemism, call sales “business development.” (it makes some people feel more comfortable)

For an industry that tends to shy away from automation while valuing tried-and-true manual processes (including the interpersonal nature of construction), one can take solace in the fact that business development can never be automated. The tools for business development, of course, can be (but that's skipping ahead to Part 2).

It's the living, breathing relationships that make projects a reality. In that sense, giving business development a name and priority, no longer relegating it to a lower-tiered non-department on autopilot, is more in line with the longstanding framework of the construction industry. Respecting the craft is formally deciding that business relationships take dedicated time to nurture, and aren't just one-and-done seeds that are planted and forgotten about.

With our expanded perception of business development in construction, we're primed to dive deeper into tools and techniques that set your business development teams up for success in Part 2. Stay tuned.

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