Building Professionals: Could Market ‘Positioning’ Make Your Company More Profitable?

This week RIBA’s 2012-2013 Business Benchmarking Survey revealed a combined turnover of £1.58 billion for RIBA Chartered Practices.

Whilst this would appear to be promising news for the construction industry as a whole, it must be pointed out that 50% of this declared annual turnover was achieved by a mere 3% of large practices surveyed. Indeed, almost 40% of respondents in this category make less than 10% profit a year.

Following publication of the report, RIBA President Angela Brady commented on the “acute split in business management, profitability and specialisms between large and small practices on how to make the most of their own position in the marketplace.”

Certainly the survey produced some interesting insights. For example, 62% of practices do not have any form of business plan, and of those who do, only 13% plan beyond a single year at a time. Another interesting (and perhaps surprising) statistic is that 50% of the industry’s work won is through a “direct approach with no competitive process.”

This would appear to give the green light to the more proactive practices that use direct marketing in their armoury. Angela Brady also made mention that the survey results would indicate that great design skills alone would not be enough to ensure a thriving practice. She said: “Practices must identify a clear proposition to its target audiences with client-focused leadership and efficient business management – as well as great design.”

Incidentally, if you want to know which sectors account for the majority of the profession’s fees, the figures are:

One-off house projects – 9%

Residential market – 25%

Education – 15%

Mixed use – 13%

Offices - 11%

Those listed above were the only sectors to contribute more than 10%.

If you run an architects’ practice, construction company, or building machinery hire firm , then ‘positioning’ your offering could help you narrow your focus, as well as market your business more effectively. It’s becoming increasingly harder to ‘sell’ businesses which view themselves as ‘Jacks of all trades’, whereas focusing on a particular area or specialism within the business, could mean you will attract greater recognition within your particular niche market.

By the same token, building machinery hire companies could also increase demand for their services by focusing on a niche: for example telehandler hire.

By focusing on a single area of expertise and promoting your offering vigorously and consistently, you could establish yourself as the ‘go to’ company in your sector, whether you are promoting architects’ services, construction services or telehandler hire.