Europe’s construction industry is a vital contributor to the region’s economy, and over 90% of the sector is comprised of micro (fewer than 10 employees) and small (fewer than 50 employees) enterprises. In other words, smaller businesses form the backbone of this sector.
But, as with many businesses, many small construction companies suffer from productivity challenges, cost overruns, and administrative challenges. This is understandable, given how much goes into managing a construction business–maintaining relationships with vendors and contractors, putting the right team together, acquiring and managing customers, and managing projects throughout their lifecycle.
The good news is that the right tech infrastructure–specifically the best construction management software for small business–can add value to every major business function. It can help you organise workflows, manage customer relationships, track time, improve productivity, automate repetitive work, and more.
In this article, we’ll take a closer look at how construction management software supports small businesses, the essential features of the best software, and why Caflou is a popular choice for small construction companies.
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Why small businesses in construction need construction management software
Here’s how construction management software helps small building & construction businesses thrive:
1. Plan, schedule, and manage projects
Building and construction projects, even smaller ones, can have multiple stages involving different kinds of work and contractors. For example, a project may require an architectural technologist or architect to plan and make drawings in the earlier stages, while interior designers and painters might be engaged post-construction.
Individual stages of work also consist of tasks and dependencies–for example, the planning stage may involve outlining the scope, drafting technical drawings, securing necessary licenses and permissions, and arranging construction materials. Multiple team members may be involved here, meaning the work needs to be coordinated and properly managed.
Construction management software makes it easy to track each stage of work and engage relevant contractors as they’re needed. You can organise projects and present them in different views, track tasks and progress, assign resources, and more in one place.
2. Collaborate with different team members and contractors
Since various team members and contractors are involved at different project stages, having visibility into each other’s work is essential to working effectively. Builders need access to the architect’s plans and drawings, designers and builders may need to coordinate, and project managers require visibility at each stage.
Construction management software equips teams with powerful, flexible communication tools. Project views give teams a live snapshot of each project’s progress, tasks, and assigned resources. Team members can comment on tasks, tag contractors, share documentation, and communicate in real-time. On-site contractors can also remotely communicate with off-site team members.
3. Create and store essential documentation
Building and construction businesses require essential documentation for their operations, including:
- Standard operating procedures (SOPs), to guide both your business’s operations and each contractor’s specific area of work. For example, you might need SOPs for safety protocols such as working at heights or working with dangerous tools. Other SOPs may govern how tools are used and maintained, how projects are managed, and steps for ensuring legal compliance.
- Permits and licenses. These include issued permits and licenses as well as templates/forms for additional permits that you might need to apply for on new projects.
- Contracts. For bringing on clients, vendors, and contractors.
Construction management software lets you store essential documentation and share it with clients, contractors and vendors. Project managers can also embed the documentation inside projects to guide team members better–e.g., application forms might be included in the “planning” stage to remind team members to apply for permits.
4. Manage clients
The best construction software makes it easy for small businesses to manage their customers and keep them engaged throughout the project, without burdening your team with administrative tasks. An end-to-end system that hosts your projects and lets you share real-time updates with customers gives them visibility into the work your team is doing for them.
For example, contractors can invite customers to the project board so they can see the progress that’s been made, the work currently being undertaken, future tasks, and the timeline. Construction business management systems also make it easy to manage customers throughout their lifecycle, from initial correspondence to sharing contracts and managing communications during the project.
5. Track cashflow and profitability
Cashflow is the lifeblood of any small business; yours might be profitable on paper, but without healthy cash flow, a business may struggle to make payroll and sustain its operations till the end of the year. Studies also suggest that construction businesses may be particularly vulnerable to cost-related challenges, with nine out of ten construction projects over a twenty-year span experiencing cost overrun. The average overrun was 28%.
These numbers highlight an important consideration for construction companies: profitability at the project level. Tracking whether the entire business is profitable is not enough; teams need to dig deep and determine the profitability of existing and previous projects.
This exercise may reveal further insights that you’ll want to take action based on–for example, certain projects may be less profitable than anticipated because of cost overruns. If cost overruns exist across multiple projects, you might consider taking precautionary steps, such as monitoring expenses more closely or accounting for the overruns in your quote to customers.
The advantage of using construction management software here is that the systems offer granular insights, such as the costs and expenses associated with each project, making it easier to determine profitability and identify unexpected costs. These systems also help project managers track project expenditures and take necessary action if a project starts to exceed its budget.
The best construction software for small business: 7 essential features
There are dozens of construction management software solutions available for small businesses, with some tailored for specific needs (such as contracts and billing) and others that support core business functions.
But the best construction software for small business should deliver value to your entire organisation, which means providing the following essential features:
1. Time tracking and invoicing
Time-tracking features are important for two core reasons:
1. Client billing. Smaller building or construction work might be billed by the hour, but time tracking is important even for larger projects billed at a fixed rate. This is because time tracking gives clients visibility into how much work went into the project. Moreover, if they’ll have a better indication of the timeline for any additional work they might be considering.
2. Productivity tracking. A McKinsey study revealed that larger construction projects can take 20% longer to complete than anticipated, and some estimates revealed that construction professionals could be spending as much as 35% of their time on “non-productive activities” (such as rework, managing mistakes, and resolving conflicts). Time tracking, combined with project and task data, gives project managers more insight into how teams are spending their time and where productivity can be improved.
Thus, it’s important to choose software that lets your team members and contractors accurately track their billable hours. Here’s how you can do this with Caflou:
2. Project management and profitability
he right software makes it easy to manage the entire project lifecycle, including budgets, resources, and tasks. This means the platform should support task management and hierarchies, milestones, tagging team members and assigning roles, in-project communication options, and different project views.
The right platform will also provide financial data–including the costs and expenses in each project–allowing you to accurately determine a project’s profitability. In a broader context, these insights are also key to tracking your construction business’s overall cash flow.
3. Client, vendor, and contractor management
Managing clients, contractors, and vendors should be simple and intuitive–and the right tech can make it so. The best construction management software will have built-in customer relationship management features that let you:
Store contact information for leads, vendors, contractors and customers.
Communicate with clients and partners and track your correspondence in one place.
Conveniently share projects with them, looping clients in for approvals, engaging external contractors when they’re needed, and providing automatic project status updates.
Unify and interpret customer data. Hosting all your customer data in a single place makes it easier to analyse and discover patterns; for example, you might discover similarities in your customer base–maybe demographic information–that can help you acquire new business.
4. Seamless team collaboration
The platform you choose should complement the way your team works, not get in the way of it. The right software gives your team members multiple ways to communicate and collaborate–sharing documentation, tagging each other in projects, meeting 1:1, and assigning tasks or requesting approvals.
5. Scalable pricing plans
Software as a service (SaaS) solutions such as construction management software have different pricing plans that may depend on tiers (e.g., feature-specific ones) and usage (such as user seats, or credits). Since the software you choose to manage your construction business will facilitate core business functions, finding one with transparent pricing is important for managing long-term costs.
The advantage of using an all-in-one construction management solution is that the costs are more predictable, meaning it’s easier to project future increases. For example, if you sign up for a Premium plan and purchase 20 user seats, you’ll also know what the costs will be for 30 or 40 employees. In contrast, if you’re using multiple tools for different purposes–maybe a separate one for time tracking and another for project management–then forecasting costs requires more tedious calculations.
6. Workflow automation
Workflow automation lets you automate mundane, repetitive tasks–such as data entry, administrative work, sharing status updates, etc–to improve productivity by freeing your team up to focus on specialised work. Over 30% of small-to-medium-sized businesses (SMBs) report that automation reduces errors, helps them provide better customer service and support, and reduces the time they spend on administrative tasks.
With the right software, you can create custom automated workflows for various purposes. For example, a construction business might:
- Create an automated event that sends an email or SMS to relevant vendors after a project’s needs have been outlined.
- Provide automatic updates to team members as a project progresses. For example, you can tailor the system to automatically notify stakeholders after a project’s status is updated from the “planning” to the “construction” phase. In this case, it might update the builders and designers.
- Notify project managers if a project starts to experience cost overrun.
And more.
Caflou: The best construction software for small businesses
Caflou is a purpose-built business management solution for small businesses. Here’s why small construction businesses choose Caflou as their construction management software of choice.
1. Manage your entire project lifecycle
Plan your projects, outline milestones, assign responsibilities, engage stakeholders, and track cash flow in one place. Caflou’s project management suite gives construction teams everything they need to monitor a project’s lifecycle, budget, and goals.
2. Built-in CRM for client and partner relationships
Manage customer relationships from end-to-end, from your initial interaction to after sealing the deal. Caflou lets you store all your business contacts–including vendors, contractors, and partners–in one place, making it easy to engage them when needed.
3. Customisable for your needs
Personalise Caflou to your team’s needs and tailor it to your workflows. Customise your top menu, add quick links and lists, design custom notifications, create custom modules on your Caflou dashboard, and more.
4. Track work from anywhere
Use Caflou to track the time spent on different types of work; client correspondence, on-site, planning, and more. Get a complete overview of your “tracked times” in one place.
5. Powerful workflow automation capabilities
Automate tasks and processes with Caflou’s built-in workflow automation builder by specifying custom triggers, events, and actions. Create more advanced, cross-platform integrations by integrating Caflou with Make.
Ready to manage your small construction business on a single, centralised platform? Get started with Caflou for free today.