Ready, set, grow! Take your contractor business to the next level this year with ten growth strategies designed to help you expand and bring in more profits.
Ready to level up? Here’s how:
Update Your Contractor Website
You don’t have to look far to find potential new clients. They’re online.
A website is your new business card. You can demonstrate professionalism and make a good first impression in a millisecond if your contractor website is modern, polished, and responsive (responsive = works well on screens of all sizes — especially smartphones).
A modern website can be an important tool that helps you build your business. Not only can it help potential clients find you online, it can also help convert website visitors into actual prospects, provide a tool for scheduling consultations, and a method for clients to make deposits and payments, too.
It doesn’t have to be expensive; contractors can get a website that’s professional and polished at a very affordable price.
Improve Your Local Search Rankings
A website can only be a useful tool if potential clients can find you online. Local SEO can help your business be found by potential clients who are looking for your services in their area.
To get found by potential clients near you, be sure your business is listed in the following:
Putting effort into optimizing your contractor website for local search you’ll send all the right signals to search engines to get your business in front of the right people — the ones in your area.
Hustle During Off Season
Busy during summer and barren in winter — it’s a way of life for many contractors. Instead of kicking back during the off-season, use those slower months strategically to help grow your business.
Offer winter-weather services such as weather-proofing, snow-removal, or holiday decorating. Reach out to clients who’ve expressed an interest in interior remodeling or offer energy efficient upgrades.
Many profitable contractors use winter months to attend trade shows, network, and focus on marketing or other operational tasks. Remember the story of the ants and the grasshopper? Take a lesson from the entrepreneurial ants and use the slow season to prepare for the busy months up ahead.
Avoid Preventable Mistakes
Preventable mistakes pose the biggest threat to your bottom line. When a job becomes unprofitable, preventable mistakes are often the cause.
Preventable mistakes can include building things to the wrong specifications, which can require re-work and additional staff time and material/equipment costs, and employee injuries that result in workers’ compensation claims and a hit to your safety record, which can negatively affect your insurance rates and your ability to bid and obtain future work.
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Budget Wisely
Small construction businesses have to budget more creatively compared to larger firms. If you want to end up with more cash in the bank this year than last, here’s how to establish and stay on top of your budget:
- Create a budget
- Research the market value of your prices
- Track your financial progress during the year
- Take action when needed to stay on track
An annual budget will allow you to stay on top of your financials throughout the year, allowing you to make changes and reallocate resources before your bottom line feels the impact.
Expand Your Offerings
If you’re ready to grow, it may be time to expand your service offerings.
Expand strategically: what services do your clients often request in addition to yours? If you specialize in kitchen remodels, it may be time to expand to kitchen and bath. If you’re a concrete contractor, you may benefit from offering landscaping services, as well.
The best service expansions are the ones that will help increase the value of your customers — and prevent them from seeking out another contractor to finish the job.
Or Just Keep it Small
Just because you can expand your service offerings, doesn’t always mean you should. Staying in your niche can help you market your business. After all, you don’t want to become a “Jack of all trades, master of none.”
In some cases, the amount of cash flow required to hire more workers and expand your business just isn’t worth it. Staying small could be the ticket to increasing your profits.
Keep Employees Happy
Keeping workers content and happy can pay off, big time.
“I can’t afford to lose one person," said Jay Badame, president and COO of AECOM's Building Construction division "If I do, history has shown that it costs me $250,000 to replace that person in terms of recruitment and training. I have to make sure my competitors aren’t stealing my people.”
Profit sharing plans, job autonomy, health insurance benefits, performance bonuses, and continuing education and training are some of the ways you can show your employees that they’re valued members of your organization.
Keep them happy and working and you won’t have to waste resources finding and training your employee’s replacements.
Stay Safe
Safety is crucial to your success in the construction industry. Not only is it important to keep your workers on the job — and out of the emergency room — but a focus on safety also keeps insurance rates low and cash flow high.
Keep a perfect safety record by:
- Daily safety meetings
- Weekly tactical meetings
- Regular safety training sessions,
- Identify potential hazards at the beginning of every task
- Creating a top-down safety culture in your company
Get Creative with Cash and Credit
Having enough cash is imperative to grow your contractor business. Secure enough operating capital to support growth & bonding.
You need to cover job costs, pay vendors for materials, meet payroll, and pay subs. If you don't pay your subs on time, no one will want to work for you. If you don't pay your suppliers on time, your credit rating will suffer.
If you’re feeling the cash-crunch, it may be time to secure a bigger line of credit.
How much credit do you need? A good rule of thumb is to cover 10% of your annual sales.
If big banks aren’t enthusiastic about lending to you, don’t take no for an answer. Sometimes small contracting businesses need to get creative to find alternative (non-bank) methods of financing.
Growing and expanding your contractor business can be exciting and profitable, as long as you do it strategically. Really take the time to rethink your services, offerings, digital presence, financial situation, and impact on your employees, and you’ll find yourself increasing your business in no time at all.