Business improvement is a strategic approach that guides individuals, teams, and organizations through transitions, ensuring that new initiatives are smoothly adopted and successfully implemented. Addressing organizational change’s emotional, behavioral, and engagement aspects helps businesses shift from their current state to a more profitable and efficient future.
For construction companies, business improvement can be especially valuable when faced with operational inefficiencies, cash flow challenges, or the need to enhance profitability. With a structured, thoughtful approach, construction companies can embrace change in ways that not only improve their bottom line but also create a more rewarding environment for leaders and teams alike.
Introduction to Business Improvement in Construction
Business improvement is a structured strategy designed to help individuals, teams, and entire organizations smoothly transition from their current state to a more desirable future state. Its core focus is on the people side of change—addressing the emotions, behaviors, and engagement necessary to ensure that new initiatives are adopted successfully.
Identifying the Need for Strategic Change
One of the clearest signs that a construction company may benefit from business improvement is by taking a close look at cash flow and overall satisfaction with how the business operates. If cash flow is strong and the owners can pay themselves the salary they want, there may be no immediate need for change. But if the owner struggles to compensate themselves fairly or feels drained by the daily grind, it’s a strong signal that something needs to shift. These issues often point to deeper structural or operational inefficiencies. By applying a thoughtful change management strategy, construction businesses can implement the necessary adjustments to improve profitability—and make the company a more rewarding place to lead.
Evaluating Current Business Performance
To effectively measure current performance and the impact of major changes, construction companies should keep a close eye on a few essential key performance indicators (KPIs). Gross profit margin is one of the most telling metrics—it reveals how profitable each job is and helps identify where improvements can be made. Total net profit in dollars is another vital figure, offering a clear picture of the company’s overall financial health. In addition, it is crucial to monitor accounts receivable aging (how long it takes to collect payment from clients) and accounts payable aging (how long it takes to pay vendors). Comparing these two—days in receivables versus payables—gives valuable insight into the company’s cash flow and helps determine whether operational changes are truly making a difference.
Developing a Clear Vision and Objectives
Establishing a strong vision and clear objectives for a business improvement initiative starts with a structured, methodical approach. At Foundation Accounting & Consulting, we guide construction companies through a 13-module system—one step at a time. Each module builds on the one before, creating a natural progression toward strategic clarity and operational improvement. Depending on the company’s existing strengths and readiness, some modules may require multiple meetings, while others can be completed more quickly. This flexible, modular approach allows us to tailor the process to each client’s unique starting point, ensuring that the vision and goals we help develop are both practical and aligned with their capacity for growth and change.
Getting Buy-In from Your Team
A few years ago, I worked with a landscape company that set out to improve job costing—a key step toward understanding true profitability on each project. While they were doing a decent job of estimating bids, they struggled to track actual expenses and compare them to those estimates. The root of the issue was common: field workers would buy materials from suppliers, but the invoices or pick tickets rarely made it back to the office. When monthly statements arrived from suppliers, there was no way to tie those charges back to specific jobs, leaving accounting in the dark about where the money was going.
We recommended a simple fix—have field staff write the job name and accounting code on each invoice, snap a quick photo, and upload it to a shared site for real-time tracking. This would have drastically improved cost attribution and job profitability analysis. But the owner hesitated. Concerned that the team wouldn’t adopt the process, he chose not to move forward with the change. Sadly, the company still doesn’t have a clear picture of job-level profitability and continues struggling with growth and improvement. It’s a powerful reminder that sometimes, the greatest barrier to success is the fear of change itself.
Gaining team support for a change initiative starts with understanding what matters most to your employees. Typically, their top concerns are job security and how the change will impact their daily tasks. Resistance often stems from fear—fear of increased workloads, unfamiliar routines, or losing control over their responsibilities. That’s why effective leadership is critical. Motivating and guiding your team through change requires trust, transparency, and consistent communication. When leaders clearly explain how the changes will benefit both the company and the individual and create space for feedback and involvement, it becomes much easier to build a culture where employees feel safe, supported, and ready to embrace new directions.
Building a Culture of Continuous Improvement
Creating a company culture that welcomes change starts at the top. Leaders play a pivotal role by setting the tone and leading by example. That means never asking the team to embrace something they aren’t personally committed to. When an owner or leader actively participates in the change process—demonstrating a clear understanding of what it involves and showing commitment through their own actions—it sends a powerful message. This kind of leadership builds trust and sets the standard, making it far more likely that the rest of the team will get on board and adjust with confidence.
Conclusion
Effective business improvement is a critical tool for construction companies looking to improve their performance, profitability, and overall business health. By recognizing the need for change, evaluating current business performance, and developing a clear vision, companies can navigate transitions with confidence. Gaining buy-in from the team and building a culture of continuous improvement is key to ensuring that change is embraced and successfully integrated into the company’s operations. With the right strategy and leadership, construction businesses can transform challenges into opportunities for growth, ultimately achieving long-term success and a more rewarding work environment for everyone involved.
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