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Growing a construction business in New Zealand

Mahia

As a contractor or sole trader in the construction industry, word-of-mouth and referrals are going to be the biggest tools for growing your business. Reliable and friendly customer services is the easiest way to ensure people refer your business and you beat out your competition. Focus on exceeding expectations of current customers – you never know when someone might be ready to build another house or maybe they might have a friend who is looking for a contractor. Simple sales tactics like offering discounts on future contracts if they recommend you to a friend can bring you new business.

Marketing

A smart way to support referrals is having a company website. It’s the digital age after all, even if Joe Blogs recommends you to his friends at a BBQ, they are still likely to look you up online for validation. Make sure you have an online presence. It doesn’t need to be big, a simple one page website outlining what your business does and how to get in touch is all you need. The only word of warning here is don’t skimp and get your mates, brother’s cousin who did some web design at high school to take a crack at it. It’s worth getting a professional to do, it’ll look sharp and probably won’t cost as much as you think. A website is an excellent foundation for any future marketing. Facebook is also another tool that, in conjunction with your website, can give your business a solid online presence, and is a great way of sharing positive customer reviews.

Note: Ask you web developer to ensure your site is optimized for search, that way for example when someone types “plumber + South Auckland” into Google your website will appear in the top search results.

Financing

Construction businesses traditionally have high cash needs to maintain day-to-day operations. Business owners typically need to invest heavily in building materials and labor up front to get the job started and then wait for reimbursement from the client. If this reimbursement doesn’t happen on time it can put a major financial strain on the company. On the Construction supply side, the business is required to carry massive inventory to keep up with immediate needs of the builders on the job. Having ready access to quick capital for investing in these materials is paramount to not only building the business, but keeping it afloat. Added advertising, location renovations, more staffing and other periodic expenses also continue to require cash infusions at regular intervals.

Exploring ways of accessing a line of credit, overdraft protection, and bank loans will all help you expand your business.

To attract funding from banks, you need to be organised – banks will require documents like:

  • Financial statements (for current and previous year)
  • List of current and past jobs
  • Tax returns for the past 3 years
  • An inventory list of your company’s equipment
  • Photos of completed jobs
  • References
  • Customer list

It requires a bit of preparation but it well worth the effort and an important tool if you are looking to grow your business operations.

Cactus Insurance believes the information in this publication is correct, and it has reasonable grounds for any opinion or recommendation found within this publication on the date of this publication. However, no liability is accepted for any loss or damage incurred by any person as a result of any error in any information, opinion or recommendation in this publication.

Nothing in this publication is, or should be taken as, an offer, invitation or recommendation to buy, sell or retain any investment in or make any deposit with any person.

The information contained in this publication is general in nature. It may not be relevant to individual circumstances. Before making any investment, insurance or other financial decisions, you should consult a professional financial adviser.

This publication is for the use of persons in New Zealand only.

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