Every business’ first five years are important. It is during this time that you must overcome hurdles to prosper. Construction companies are particularly prone to failure during this period. According to the US Small Business Administration, roughly two out of every three construction contractors will fail to make it to the 5-year milestone.
General contractor business owners encounter a variety of issues on a daily basis that, if not addressed properly, could lead to financial disaster and the eventual liquidation of their company. Unhappy customers, poor project outcomes, equipment failure, shipment delays, personnel concerns, and other factors may all hamper your company’s performance and development.
Here are some contractor business suggestions to help you stay on top of the game in the face of market obstacles. Being well-rounded and making sensible decisions will undoubtedly give your company the boost it requires to ensure its long-term viability.
1. Observe excellent practices in the construction business
To ensure high-quality work, every sector has its own set of standards and best practices, and the contracting industry is no different. They say there’s a suitable tool for every job, and there are ideal ways to complete various construction activities. The best practices your business uses may come from within the industry, be prescribed by state or local law, or could be created by you and/or other high-level staff.
Regardless of who sets the standard, as long as your staff have a fundamental understanding of what’s expected of them, your small business is in excellent hands. There should be a process in place to assist everyone to perform key processes. This includes everything from bookkeeping and scheduling, to training and management, along with the physical work you do on job sites.
2. Make your contracting business more specialized
No doubt your company is one of many that may offer similar services to customers. This can make it hard to stand out from the crowd, especially if there are many contracting businesses in your area to choose from. To differentiate yourself from the competition, consider adding a specialty to your service offering.
While specializing your service may feel like you’re limiting your pool of potential clients, it could actually help you grow your contracting business. Clients may be quicker to hire someone who is seen as an expert in the type of project or build they are planning. It can also be more efficient, as you may need to purchase fewer types of materials and could possibly buy some in bulk. Specialty services could be offered alongside more general ones to keep your portfolio diverse and help protect you against economic downturns in one area.
3. Carefully choose your clientele
Turning away customers may not feel like an option, especially when you’re just started out. However, there are reasons to decline certain projects or working with some clients. While all customers contribute to your company’s income, some are undoubtedly better than others.
You’ve almost certainly dealt with a customer who was demanding and rude to others. Then there are some that track you down to get you to work on a project that is only worth a few dollars. The time, money, and effort you’ve put into these sorts of clients may not be worth it for you and your business. You should learn to recognize these indications early on and separate them from the signs of good prospective customers. For example, customers who refuse to pay a deposit could be more likely to dispute your final invoice or drag their feet paying you.
4. Hire a professional to help you
You can be the best business owner in history, but you won’t be able to master and handle everything from bookkeeping to manual construction. There are only 24 hours in a day, so even if you do have the skills to do the work, you may not have the time. It may be enticing to have a go at everything to save money, but outsourcing to professionals could help you focus on what you do best.
Accounting and bookkeeping, human resources, marketing your business, IT, customer support, maintenance, and office cleaning are just a few of the jobs you might consider outsourcing. You may use the time you save on these tasks to focus on delivering your business services. In fact, professionals in these areas might be able to suggest ways to work more efficiently, which could allow you to take on more clients.
5. Here’s to your success!
We hope this short business guide will help you grow a successful contracting business. These and other changes could help you get past the first five years of business and set you up for greater success in the years to come.
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