15 Ways to Build a Long-Lasting Contractor Business

15 Ways to Build a Long-Lasting Contractor Business

 

Consistently and reliably providing a necessary service is a wonderful strategy to build a business you can be proud of.

Because they are vitally necessary, freelance contractors are a substantial contributor to the economy. Without them, homes and offices would literally fall apart. As such, developing your own contracting company could represent a very profitable venture.

If you’re serious about growing your contractor business, here are 15 strategies that may just come in handy. 

1. Adhere to the most up-to-date company procedures.

When contractors aim to enhance efficiency and grow their business, one of the most common issues they face is agreeing on what is considered industry best practice. After all, they already have a system in place that they are acquainted with and perceive to be functioning properly.

To put an end to this discussion, you may use whichever system you choose to manage value-added tasks such as planning, bookkeeping, invoicing, task management, and staff training, as long as the system includes basic task knowledge and assists each employee with step-by-step instructions.

When you've got a good system in place, you are ideally placed to retain your present level of success while also being ready to scale appropriately when the time comes to expand.

2. Evaluate your internal structure.

After you've decided on a system that follows best practices, you'll want to undertake a thorough analysis of your firm. This entails posing the following questions:

  • Is your company financially sound?

  • Do you get a lot of repeat customers?

  • Do you have any customer recommendations?

  • What are people's opinions of your company and customer service?

  • What staff turnover rate does your organization have? 

Regularly scrutinizing your books, seeking customer opinions about your firm online, and interacting with staff and customers can help you answer these lines of enquiry. If there are areas that need to be improved, concentrate on them before expanding your company too much.

For example, if your number one complaint from consumers is that you don't have personnel who excel in customer service, you might want to try hiring people who do or provide sufficient training for your current staff.

3. Availability is key.

During normal business hours, your potential consumers want to speak with a real person, not a robot. Having someone on hand to answer the phone all day is a big ask, but it's vital if you don't want to lose consumers to your competition.

Sending business calls to your cell phone while you're out of the office is one technique to get around this. Even if you’re not able to answer the phone in person, you'll probably be able to call the customer back faster than returning to the office.

To avoid any misunderstandings, make sure your company hours are clearly stated on your business cards, website, and social media outlets. If your business closes at 5 p.m., a customer shouldn't be disappointed if no one answers the phone at 8 p.m. 

4. Become a member of a trade association.

Associations like the Associated General Contractors are useful for more than just networking. They can also assist you in developing important business skills, such as determining how much to charge clients and how to construct a contract. They also suggest which items to utilise for certain types of jobs and where to find sub-trades.

5. Improve your marketing skills.

Landing new clients isn't the only goal of a successful marketing strategy. It's all about acquiring more profitable contracts while keeping your current customers satisfied.

Today, that includes having an online presence and communicating with your target audience via email, social media, and blog entries that show how your company addresses their problems.

Don’t forget to market your business locally. Begin by ensuring that your address, phone number, and business hours are all clearly accessible and searchable online. Then, attend chamber of commerce meetings or respond to queries in a local newspaper forum to network in your neighbourhood both online and offline. Also, don't be scared to invest a few dollars advertising your company on social media sites like Facebook.

6. Obtain additional funds.

It is not uncommon for small-scale contractors to have grand plans for expansion but no financial means to support such plans. Customers' late payments cause cash flow problems, which are all too typical. This means it's up to you to figure out how to get lines of credit, loans, and overdraft protection.

Remember that if you want to get finance, you'll need to keep precise and structured records and investigate the best sort of loan for your company depending on its present needs.

7. Be adaptable.

Even if you work as a general contractor, you are unlikely to be a specialist in every subject. That is why you offer specialised services to your clients. When you exceed consumer requirements and offer a positive customer experience, you'll almost certainly win a lifelong customer. For example, if you're fixing a faulty socket and see a bit of plastering that you can easily patch, instead of having the customer call a plumber, you can make the repair for yourself.

8. Look for a mentor.

The nicest part about having a mentor is that they can help you solve challenges. The mentor can help you manage your money and customers, as well as connect you with vendors and investors. 

9. Hire brighter and more talented people than yourself.

This is the long-term solution to any micromanagement issues you may encounter. You can trust people who are smarter and more talented than you to handle any assignment without your supervision. This frees up time for you to concentrate on expanding your contractor business. Plus, you'll pick up a lot of useful information from them.

10. Keep a close eye on your finances.

Many construction companies fail because they are unable to afford the costs of their overheads. That means that before you accept a job, you must pay special attention to overhead costs and be aware of any additional fees. When submitting bids, consider the project costs, primarily materials and labour, and provide a ballpark estimate to the customer.

Creating a budget is another technique to manage overheads. This will help you to track how much money comes in and how much money leaves your account. If your outgoings exceed your inflows, you'll need to make some adjustments, such as eliminating unnecessary spending and raising your rates.

When planning your finances, make sure you don’t cut costs from the wrong places.

For instance, many businesses may be tempted to reduce their insurance costs in a bid to enhance profitability.

But even the most seasoned and reputable businesses may need to deal with insurance claims from time to time. Don’t skip the public liability insurance, which protects you against potential legal, financial, and reputational harm.

11. Stand apart from the crowd.

Is your company specialised in some way, or does it cater to a specific market? Then make the most of what distinguishes your company from others in the area. It might simply be your capacity to give services tailored to offices rather than residential premises, as opposed to other contractors who only work on residential homes.

Make sure that you offer a healthy mix of items and services. Niche markets can provide you with a competitive advantage and help you stand out, but they aren't usually as huge as enterprises that reach a broad audience.

12. Select the most deserving customers.

I wouldn't advise turning a consumer away. However, the harsh reality is that some clients are superior to others. Is it really worth going after a deadbeat customer who only wanted some minor contracting work for a few hundred dollars? Or would you prefer to acquire a large job from a client who pays you in advance?

Always remember that you want clients that provide you with a good return on investment, not those who cause you problems. Learn how to recognise these consumers before agreeing to a job to save yourself the trouble. For example, you could ask some of your coworkers if they've ever worked with this particular customer. Customers who are nasty or aggressive to you or your team from the start or refuse to offer you a down payment are also signals of problems.

13. When necessary, outsource.

Here are a few realities that you must accept: A day is made up of only 24 hours. You aren't flawless, either. Once you realise this, you can begin outsourcing specific activities to lessen stress and focus on slowly building your firm. Accounting, for example, can be frustrating and time-consuming. So, why not hire a freelancer or a CPA to handle all of your bookkeeping and accounting needs?

14. Be ready for anything.

Being prepared, regardless of the size of your company, can make or destroy you. However, for contractors, it's the tiny things that determine whether you’ll be a success. After all, efficiency and profitability are dependent on being well-prepared.

Let's imagine you're almost finished with a bathroom remodel and discover that you're missing a $5 element that you need to finish. Because you have to overnight it, that part can now run you back a couple of hundred dollars. Even a quick trip to the hardware store is time and money consuming. And, because it wasn't included in the original quote, you'll probably have to eat that cost.

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You can't plan for every eventuality, but read over your proposal before getting started to ensure that you have everything you need to do the work.

15. Don't be frightened to stay small.

Many contractors find themselves in this middle ground, where they are obliged to hire additional workers because they can't handle the demand, yet their revenues aren't increasing. It's more convenient for many contractors to maintain smaller entities. This can be a good thing because it preserves a positive cash flow by keeping expenses to a minimum. Because the task is easier to handle, being small also decreases stress.

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