Running a successful contracting business has its fair share of challenges—finding the right customers, balancing office and field dynamics, and upholding a positive online reputation.
Whether you’re starting your own business from square one or looking to grow an existing business, here is a list of nine practical tips to help with the everyday challenges of managing a contracting business.
1. Identify the right niche
There are many different types of contracting businesses—from general contractors to carpenters to painters and more.
While you might initially feel hesitant to limit the types of services your contracting business provides, doing so will give you a clear vision of who you are as a business and allow you to stay wholly focused on providing the best possible services within your niche.
2. Keep your equipment properly serviced
Every industry has tools of the trade, but as a contractor, it’s likely that you’re highly dependent on a wide range of tools in order to perform your job each day. Downtime can have a detrimental impact on your business.
To a customer, nothing says unreliable quite like broken machinery and equipment. When these issues pop up frequently, not only do they inconvenience you but they can also affect your customer’s schedule.
Make sure all of your machinery and equipment are serviced frequently. Furthermore, consider stocking parts for important tools, such as air compressors, in case of emergency.
3. Bring talented workers on board
Contracting is a team sport. To provide high-quality services, you’ll need to employ the right group of people—workers who represent the values of your business and provide the customer with exceptional service.
Like most businesses, you’ll want to strike the right balance between experience and talent.
Of course, seasoned professionals bring expertise and an already developed skill set, but often at a higher price. Plus, 61% of contractors have trouble finding skilled workers. Talent, on the other hand, can be developed through training and learning experiences and may cost your business less money.
4. Start documenting everything
There is virtually no limit to how often you should keep documentation, particularly when you’re a fledgling business and don’t yet know which items need or don’t need to be recorded.
As you’re starting out, it’s good practice to document as much as possible. With time, you’ll develop a better understanding of how to prioritize documentation of specific items.
5. Don’t be afraid to outsource
Particularly if you’re starting out small, you shouldn’t feel as though you have to provide your customers with a full service using only your in-house team.
There are plenty of professional contractors that outsource certain work to other companies. This can also be advantageous for your business, as you may be able to outsource to companies that can perform tasks for less.
6. Staying small is an option
As is the case with many contractors, there may be a real temptation to grow your business, increase your staff, and take on larger projects. 35% of construction-related companies increased their staff in 2017.
However, there are many contractors that still manage to remain profitable without ever expanding or scaling their business. If you’re content and profitable as a small business, there’s no need to upset the apple cart now.
7. Choose customers wisely
If you’re a small business that is still struggling to find customers, it should go without saying that you likely don’t have the luxury of turning away customers in lieu of other customers.
However, if you’re finding that you have a steady stream of work, there’s no better time to start being selective of your customers. Choosing to work with high-quality customers can often result in a better working experience and higher profit margins.
8. Know that your reputation matters
In the construction industry, a poor reputation can be detrimental to your ability to woo customers and earn top-tier projects. Unfortunately, it’s also easier than ever for customers to leave negative reviews about your business.
With businesses listed across multiple online directories and social media platforms, it takes little more than 30 seconds to find out about a contractor’s reputation online. Studies show that 87% of consumers read online reviews for local businesses.
9. Don’t neglect marketing
If being out in the field and getting your hands dirty is what you love most about contracting work, it’s probably that you don’t share nearly the same enthusiasm about marketing.
Many contractors rely on word-of-mouth to earn new customers; but the returns can be inconsistent, especially when you’re still building a body of work. A little branding and marketing can go a long way towards bringing in a flow of fresh leads and customers.