Build Your Construction Company Right

How to build a successful construction company, in one of the most competitive markets in the world, during an economic downturn.

It seems simple at first. A man in a truck (aka Joe) is told by his boss that the construction company he works for is running low on work. Joe’s boss doesn’t have a gig for him. Suddenly, Joe is in a tight spot. But, as fortune would have it, Joe’s neighbor needs work done on his home, and commissions him to work on his project. Suddenly, Joe is his own contractor.

That was me. I was Joe. But nothing worth doing is ever really that simple. Building a company is hard work, although it’s also very rewarding. Building a company in an ultra-competitive market, during an economic downturn is even harder. I’ll take about 2008 a little bit later.

But it is true. It seems simple enough to “get started” and there are few barriers to entry to become a contractor. And the barriers you do encounter, are pretty low. However, to become a true professional and build a great company, to make a reasonable profit, comply with all the laws, and still keep a smile on your face, there’s a lot of complex work to do. The hidden trap is always the same. Starting out, you simply don’t know what you don’t know. Additionally, there’s no obvious place to learn the important stuff. Everyone is out there pretty much reinventing the wheel for the first couple of years, thinking that “if I can just get this one problem solved, I’ll be unstoppable”. True, it’s easy to get started. But solving one more problem and becoming unstoppable. Well, that’s unrealistic.

30 years ago, I broke out on my own too early. I was bold, enthusiastic, and ready to make a dent in the universe. But the truth is, I would have benefitted from sticking with my first boss for another 5 or 6 years (thick or thin). I’ve never done a proper calculation, but I’d bet good money that it would have cut 10 or 15 years off the development of Acton ADU.

I have found that starting and building a business is as much about personal exploration as it is a business venture. You’ll see a theme forming, but in every turn, along every step, there are new challenges. I’ve discovered that I have always had a fundamental role in creating and solving challenges. It’s easy to blame someone else, or the economy or the wind. But the sooner I got past “blaming” and took a hard look in the mirror, the sooner I learned and focused on finding solutions. Expecting the world to come in and make everything alright? Well, that’s just never going to happen.

You’ll get frustrated, you’ll get angry, and you’ll want to throw in the towel and quit. So how do you weather it all? For me, the absolute first step was eating drinking sleeping, and breathing one core value: Accountability.

There’s no better medicine than 100% accountability for your life. If anyone is to succeed in the world of general contracting, they would be well advised to learn this crucial lesson early.

General contracting, designing, building is competitive. But competitive is a completely relative term. For example, Acton ADU is not the low price leader. If a customer wants the cheapest option, they are likely to get what they pay for. We stay competitive by trying our best to understand what our customers need and creatively solve the problem that really faces them. It’s our responsibility to be a trusted advisor with the experience and know-how to solve our clients’ unique challenges.

Once we have a clear understanding of what we believe it will take to be successful for a customer, looking through their own eyes, we propose a solution that’s tailored and specific. So, staying competitive is more about offering the right creative solution and charging a fair price for it. If we fail to stay in business because we don’t charge enough, we fail in our service to the community.

But how did I do it? How did I jump from Joe, the man in the truck, to a specialized ADU designer and builder? In the Bay Area? Where housing is so expensive it makes your head want to explode? The short answer is…I didn’t do it alone. And, I didn’t follow popular wisdom.

It’s all about people.

It was 2008. The economic crash nearly obliterated the construction market and builders in the Bay Area were dropping like flies. Not an ideal time to build a company, right? Wrong.

Finding great talent in the skilled trades is tough. It’s especially tough in the Bay Area with rising housing prices, rising costs of living. It’s tough on everyone. But great talent is critical to building a strong, prosperous construction company. You can’t do it all by yourself. Well, you absolutely can. But if you want to build a lasting legacy, and scale your business, this fundamental truth is something you should hold dear.

The crash came like an avalanche. Construction bosses, just like Joe’s, were out of work. Customers dried up and only the best, most equipped companies were still doing business. But with lots of bosses letting their people go, suddenly there was a massive influx of great talent.

So, against popular wisdom, I started hiring. In 2008, Acton went from 3 to 20 employees and shifted our vision for our future. We grew our team with some of the best people in the San Francisco Bay Area and started building and working with more and more homeowners that valued our approach to designing, navigating, and building residential projects. And that was just it. We focused on providing value. And when I say value, I’m talking about what families get out of their homes, not the price they paid for it. Those are two astoundingly different things.

Anyway, we’re talking about people. And at Acton, we hired aggressively, built a great team and delivered a great product. But, those are only the first two steps. There’s one more. The big one. The step that creates a sea of change in all aspects of your business. I’m talking about culture.

How to keep the good people.

Culture is often a company’s biggest advantage when it comes to building teams and retaining amazing people. For example, at Acton ADU, we’ve got team members that have been with us as long as 15 years. Culture is our biggest advantage, and indisputably the valuable asset that walks in and out of our doors every day.

A strong culture provides each individual with a path to success both professionally and personally. Remember what I said about my boss? How I wished I’d stayed with him 5-6 more years. That’s because there was a culture of growth that I would have certainly benefited from learning about, had I not caught the entrepreneurial bug and left the company.

Culture vastly increases the probability that your employees will return the next day. We spend such a large percentage of our lives at work that coming to a place that is inspiring and supportive, in my opinion, is the only way to build a great, lasting enterprise. Without our people, we are nothing.

And without our culture, we would never have been successful growing Acton ADU from a three-person practice to a highly specialized team and leader in developing long-term housing plans for families and homeowners.

– Stan Acton, Founder