Construction Monkey

Construction Monkey Blog

Forecast Accurately

Given the turmoil in the marketplace over the past 2 years, I have heard repeatedly from different contractors that they are looking to move into different markets.
  • We need to focus on larger projects.
  • We need to get into government work.
  • We need to go after renewable energy work.
  • We need to move into City x, y, or z.
Most of these comments and business direction are said out of necessity.  Everyone's market has shrunk (some more than others) and everyone is trying to survive by expanding their market.  I believe that some of these thoughts are based on the "grass is greener on the other side" mentality and some of it is based in fact.  No matter how the theory is floated, the real issue is how do you implement it?

Most typically, the business walks into the Business Development Manager's office or Estimator's office and makes the statement and then anticipates results.  If that is all that happens, it will surely fail.  Every type of work and location is unique in its own right.  Whether we are talking about residential, banks, government, health care, or Dallas work, anyone who is doing that work feels they are doing something special, unique, and that they do it better than others.  It doesn't matter if that is a true statement or not, the fact is that this is the perception.

Take as an example whatever work you specialize in now.  How do you win the work?  Typically with the same group of customers who believe you are qualified to perform that work.  If someday you are bidding for the work against a new company that doesn't do that work, do they win it?  More times than not they will not.

So if that is true, what makes you believe that sending out an Estimator to a new market will yield better results.  It is unfair to the "Get-Work" people in the organization.  In order to move into new markets you need to do a lot more.

You will need to get the talent needed for the marketplace.  This includes relationship people, Estimators, Project Managers, and Superintendents.  Look at rebuilding a chunk of the organization.  Think about it this way, Motel 6 is a budget hotel.  If one day their CEO states that they want to be a 5-star hotel, they cannot just go hire a marketing person to find 5-star clients.  They cannot just produce signage and brochures that state they are 5-star.  They have to do remodeling, build new buildings, hire new people that understand 5-star quality, and possibly even rename their organization.  If they don't any 5-star client will know it is a sham and will not stay there.  The only people they might attract are uneducated clients and then only once.  To ensure that Estimators and Sales can make a dream of new markets a reality you must give them a product to sell.

You will also need patience.  Absent purchasing another company and retaining their talent, changing a brand image does not happen overnight.  It does not happen without several failures.  Once you have the talent in place it will take pursuing several projects and not getting them to actually win one.  The client after some persistence will give you a chance and typically on a smaller/lower risk opportunity.  They most likely will then sit back and see if you succeed or fail.  Assuming there is not a failure then you will get another chance.  Depending on the market, this could be 6-18 months of time.

I believe every company should be moving into new markets.  Diversity is the key to a stable business.  Unfortunately, too often we don't do it the right way.  We put pressure on sales to make it happen without the right product and without the patience to see it through.  If you do it right and have a commitment to stick to it, your company can succeed in any market, because truth be told each market has its nuisances, but they are fundamentally the same: its construction!

About the Author

Craig Pierce

Craig Pierce has been working in the construction industry for the past 25 years helping subcontractors master their trade. Currently he is President of Atalanta Enterprises which provides consulting services to contractors And software solutions through