Working as a contractor can be a very profitable enterprise. However, there are several obstacles you will need to navigate and important things you will need to take into consideration.
Here are our top 10 tips for creating a sustainable contracting firm or expanding an existing enterprise.
- Follow best practices
Converging on what is regarded as the best practice in the industry is one of the issues contractors encounter the most when trying to increase efficiency and expand their business. After all, they already have a system in place that they are accustomed to and think is doing well.
You are free to use whichever system you like to manage everything from training and task management to bookkeeping, scheduling, and invoicing, as long as it includes the fundamentals of the activity and aids each employee by giving them step-by-step instructions.
Putting a productive system is in place enables you to continue to succeed at your current level while also assisting you in being ready to scale effectively when it comes time to expand.
- Evaluate your internal structure
You should carry out a thorough analysis of your business after choosing a system that adheres to best standards. This includes asking some basic questions:
- Is your company financially secure?
- Do you attract repeat business?
- Do your customers refer you to others?
- What are people’s opinions of your company and customer support?
- What is the turnover rate of your staff?
Reviewing your financial records, keeping an eye on internet reviews, and speaking with staff and customers can all help you find ways to improve. Prior to the over-expansion of your company, pay attention to any areas that require modification.
For instance, if your customers’ top complaint is that you don’t have personnel that give excellent customer service, you might want to think about employing people who can address this issue or train your current staff to better manage customer queries.
- Be readily accessible.
Speaking of customer service, during regular business hours, potential customers want to speak with a real person, not a machine. Having someone on hand to answer the phone nonstop all day is a lot, but it is vital if you don’t want to lose clients to other businesses.
Sending business calls to your cell phone while you’re away from the office is one technique to get around this. Even if you are unable to use the phone, you can probably contact the customer back before returning to the office.
On your business cards, website, social media outlets, and of course your physical location, clearly indicate your business hours to eliminate any room for misunderstanding. A consumer shouldn’t be dissatisfied if no one answers the phone at 8 p.m. if you have clearly stated that you close at 5 p.m.
Additionally, schedule automated emails and posts on social media during off-peak hours. Customers should be satisfied with a straightforward reply stating that their message was received and that they will hear back from you within 24 hours.
- Become a member of a trade group.
Industry organizations, like the Associated General Contractors, are excellent for more than just networking. They can also assist you in learning crucial business skills, such as how much to charge clients and contract writing. In addition, they offer suggestions for products to utilize and sub-trade resources.
- Improve your marketing efforts.
A successful marketing effort involves more than just acquiring new clients. Effective marketing strategies focus on landing more lucrative business and keeping your current clients satisfied.
Your marketing and promotion techniques should focus on having an online presence and communicating with your niche market via email, social media, and blog postings.
However, you should also concentrate on marketing your company locally. Make sure your location, phone number, and business hours are online and easily accessible to start. Then, engage in offline and online community networking by participating in local chamber of business meetings or a local newspaper forum. Don’t be scared to invest a few dollars promoting your company on social media sites like Facebook.
- Don’t skip the insurance
If you’re an independent contractor, freelancer, sole proprietor, or self-employed worker, you no doubt appreciate the freedom and independence that comes from working for yourself, including the chance to earn more money, select your own schedule, and find your place in the world.
Being the boss, though, carries some risk. You are responsible for fixing problems on your own. Unless, of course, your company is properly protected. Insurance for contractors can offer that protection. Look for an insurance package that meets your needs, enabling you to continue doing business worry-free.
- Secure additional funds.
If you’re a small-scale contractor, you most likely lack the resources to support growth. Delays in customer payments are a common cause of cash flow problems. This means it’s up to you to figure out different ways to use credit lines, get loans, and get overdraft protection.
Keep in mind that keeping thorough and organized records is essential if you want to obtain investment. You should also investigate the best loan option for your company depending on its present requirements.
- Be adaptable.
Even if you are a general contractor, you most likely lack expertise in every area. However, you’ll probably gain a lifelong customer if you go above and beyond for them.
- Look for a mentor.
The nicest thing about a mentor is that they can help you work through issues. The mentor can provide you with advice on how to handle your finances and clients, as well as connect you with suppliers or investors. Choose someone who has “been there, done that.” This person might occasionally be a relative or a former contractor.
- Employ individuals who are smarter and more talented than you.
Your long-term solution to any issues you may have with micromanagement is to get suitably skilled resources on board. You can rely on the people you hire to do any project without your supervision if they are brighter and more competent than you are. This will give you more time to concentrate on expanding your contractor business. Furthermore, you’ll pick up a ton of knowledge along the road.
- Keep an eye on your cash flow
Many construction companies fail because they are unable to pay their overhead expenses. This means that before accepting work, you must pay attention to overhead charges and be aware of any additional fees. Include project costs in your proposals, especially those for materials and labour, and provide a rough estimate to the client.
Making a budget is another technique to manage the expense of your overhead. This reveals how much money you are bringing in and spending. If the amount going out is greater than the amount coming in, you must start making adjustments by reducing wasteful spending and raising your rates.
