Growth vs Managed Growth: Bringing Order to Chaos

Due to the ramp-up in infrastructure spending, the next few years will hold ample opportunities for companies in the construction industry. While rapid growth can create a welcome spike in revenues, it can also have undesired effects. These include a host of unforeseen problems that impact risk, exposure, profitability, employee turnover, cash flow and long-term business objectives.

A well thought out strategic plan can help you grow in a more organized and sustainable manner, by preparing you for some of the predictable problems that frequently accompany busy times. What are the real benefits of taking a more strategic approach to managing growth?

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Improved Customer and Employee Relationships.

At its core, managed growth is designed to help you avoid chaos and accommodate an increase in workload in a methodical fashion. This means you’re better able to deliver on customer expectations around time, budget and quality. For your employees, it means a more predictable and organized project load. In short, it’s a win in both areas.

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Smoother Financial Performance.

Unmanaged spikes in workload may create a sudden need to invest in more equipment, machinery, technology or manpower. This, in turn, can have a negative impact on short-term profitability and cash flow. A more strategic and managed approach will help you anticipate the impact that projects in the pipeline will have, so that you can sail ahead more smoothly. The ultimate goal: improved profitability, higher margins and positive cash flow.

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Alignment With Your Vision.

In a market that is sending more work or RFPs your way than you can handle, it’s important to choose the projects and relationships that are most closely aligned with your long-term vision. For example, an HVAC firm may want projects that are rich in opportunities for ongoing service contracts. Another firm may seek out opportunities that enable them to expand into neighboring regions. Others may target work from larger organizations rather than “one-and-done” projects, which may enable them to form relationships that will lead to additional opportunities in the future.

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Improved Competitive Advantage.

By growing in ways that are aligned with your vision, you also give yourself improved competitive advantage in the years ahead. You can make more strategic capital investments. You can form alliances that provide greater value. And you can launch recruitment and staffing efforts that focus on finding people whose skills and capabilities are in sync with where your organization is headed.

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Long- and Short-Term Sustainability.

Perhaps the biggest negative associated with rapid growth is that it is not always sustainable; it can disappear as quickly as it came. Strategic planning and managed growth enable you to anticipate and avoid some of the pains that come with scaling up or down and provide a more long-term perspective. Ultimately, this translates into more stable returns — and a more resilient business model.

Talk To HORNE

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Growth is good. But managed growth is better. HORNE helps you take a strategic and organized approach to growth by developing a formal plan that spells out your vision — and provides metrics, KPIs and milestones for the year ahead.

In addition to strategic planning, HORNE offers construction firms a comprehensive array of services to help improve profitability and performance. As a Top 30 Accounting Firm, we also provide access to the tax, accounting and business consulting services clients need to improve the quality, accuracy and reliability of their financials.

For more information on how HORNE can help you with strategic planning and other areas of business, contact us today.

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