13 Tips for Growing a Contractor Business
Many general contracting businesses have suffered economic setbacks since 2020 and have had to put a hold on their growth and expansion plans in subsequent years. However, growth is on the horizon again, and businesses are looking for the most effective ways to expand. Construction is an ever-growing and fluid industry, and scaling a business requires careful thought to reap the benefits.
Expansion must not interrupt regular workflow. Instead, a strategic focus on resources, operational processes and marketing must augment preexisting and successful procedures. Whether already established or newly created, there are specific ways to grow a contractor business.
13 Ways to Grow a Contractor Business
Read through these 13 tips and tricks on how to build a contractor team, expand your business and set positive goals for your future.
1. Pursue Further Training
Training helps business owners and employees fill the most prominent and in-demand skill sets when building a contractor team. Upskilling employees is an investment in your business, your employees and yourself. It boosts morale and increases skill retention. Contractors who invest in annual training prioritize worker safety and productivity.
The National Center for Construction Education and Research (NCCER) is a Florida-based organization that offers exhaustive construction training options for all levels of artisans, including technical skills and crew leadership. Collaboration and training opportunities can provide the benefits associated with a better-qualified and confident staff.
For your business to grow, you must identify potential weaknesses and training gaps and address them to ensure your employees have received the best education possible. Training is a critical part of many contractors’ business models and helps you keep up with the latest industry trends.
2. Keep Up to Date With Licensing Requirements
Safety is paramount for contractors, which is why states and local governments require contracting businesses to be appropriately licensed. Licensing requirements vary from state to state. As a general rule, expect to have to provide proof of industry experience and passing results from required exams.
You may be asked to take a test as part of your license application to show you understand and can apply the appropriate codes, best practices and industry regulations. When growing your business, having licensing documentation in order is imperative, as neglecting the administrative side of your company could become expensive in the long term.
3. Understand Legal Matters
Your business has to meet several legal requirements to operate. Ensure your business registration with the state is complete and up to date. If you don’t have the required operational permits, ensure you obtain them before expanding. Some of the legalities you must stay ahead of include the following:
- Small business taxes: As you expand, your tax requirements may change. Small business tax can be complicated and depends on your business type, payroll and income. If necessary, talk through your unique tax requirements with a professional.
- Licenses and permits: The specific licenses and permits you need will depend on your location, but most states require a building permit. Employees may also need to obtain permits depending on their craft. Permit requirements will differ depending on the size and scope of your business.
- General liability insurance: Insurance is critical for successful business growth. In case of an error or accident, your business won’t have to shoulder crippling costs to rectify the problem. Insurance will cover you if someone gets injured on-site or a client’s property is damaged.
- Other types of insurance: The more protected you are, the better. Consider professional liability insurance, workers’ compensation insurance and contractors’ tools and equipment insurance.
4. Create a Strong Company Vision
One of the most important parts of starting a contractor business is forming a company vision. A formal company vision helps you remember what’s important and discover where you see yourself in the future. A vision statement clarifies your business’s meaning, passion, values and goals. It propels your business from where it is to where you want it to be. It forces you to think past tomorrow. Some questions to consider when shaping your vision include the following:
- Where do you see your business in 5-10 years?
- What steps do you need to take to get there?
- What are the financial implications of your growth process?
- Who are you as a business, and what do you stand for?
- What are you passionate about?
Once you have an idea of where you want your business to go, you can start the first draft of your vision. Keep these concepts in mind as you write:
- Focus on success, and don’t be scared to dream big.
- Understand the time and resources you’ll commit to making this vision a reality.
- Use the present tense.
- Form a plan to communicate your vision to your employees.
- Take your passion for your work and pour it onto the page.
Once your company vision is complete, you’ll understand how to move forward. You can get excited about implementing your growth processes. Refer to your vision often to stay focused and keep a positive mindset.
5. Budget Time for Business
Growing a contracting business is different from doing contracting work. To grow your business, you must set aside time for the administrative aspects of your projects. Business growth requires effective time management, and as an entrepreneur, you won’t just be doing the job anymore. You’ll be running a business — doing taxes, accounting, logging time, marketing and networking.
You’ll have to plan to balance both requirements. Time is a precious commodity. At first, it may seem like you’re not making the best use of your time, but be patient. The administrative hours you put in during the initial stages will start to show their worth as your business gets busier.
Consider blocking off times during the week to devote yourself to the different aspects of running a business. Stay committed to these as you build the foundation for your business vision. Focusing on business and work will soon become a habit you can use throughout your career.
6. Start With Small Projects
Theoretical knowledge is valuable, but practical experience is the best way to gain contracting miles. Consider what your business is capable of and put yourself out there for projects well within your scope. You can learn on the job and showcase your existing expertise.
Your first few jobs present an opportunity to play to your strengths and look for a niche within your current market. You’ll figure out what people are looking for and if there’s any way to fill those gaps. You’ll be able to hone your craft and use your completed projects to build up your portfolio of work.
Think of costs when you take on your first projects. Factor in how much the project will cost your business, from transport to outsourcing and marketing. Assuming you’ll make a significant profit in these first few projects may not be realistic, but you require the resources to complete the task well. Paying attention to the budget forms part of your learning curve.
7. Find Industry Mentors
Imagine speaking to an expert in your industry, learning from them and engaging with them. Look for businesses that are already doing what you aspire to do. Many entrepreneurs would be happy to assume the role of a business mentor. They will help you navigate growth challenges, as they have already experienced these challenges themselves. Their input will be crucial to your business. Some of the benefits of having a mentor include the following:
- Like-minded support: Starting or growing your business can be lonely. Having someone to talk to who understands the pressure of making all the decisions could be a lifeline during pressured moments.
- Expert guidance: You will encounter challenges as you grow your business. A mentor who has faced these challenges before will be able to help you work through them and provide you with feedback on your chosen course of action.
- Expansion of your network: Your mentor has many years in the business and has developed a network of other professionals. As your relationship with your mentor progresses, you will have access to this network of people who can help you achieve your business growth goals. You’ll have the opportunity to make meaningful connections with other professionals and create symbiotic relationships.
- Brainstorm your new ideas: As an entrepreneur, you’re always full of fresh ideas. Your mentor can be someone to discuss these ideas with and gain an unbiased perspective from. Talk through the pros and cons, and your mentor can point out potential challenges you may have missed.
- A fresh perspective: Starting and growing a contractor business is bound to mean challenges. Problems often have more than one solution, and talking to someone who’s experienced the same difficulties and chosen their solutions gives you a different perspective. While you are both in the same profession, there will be differences in your journeys. Discussing them can lead to new thought patterns and further growth.
8. Practice Setting Boundaries
Having your own business means you are no longer confined to working specific weekly hours. The company is yours, and you’ve invested in its success. It’s easy for the lines to blur between work and the rest of your life. Before you know it, you’re working constantly, burnt out and realizing you’ve neglected other essential elements in your life.
A solid work/life balance is vital when you run your own business. The sooner you can put these boundaries in place, the better. The benefits of a clear and well-defined work/life balance are well documented, and creating goals you can stick to will benefit your business. Be deliberate and reasonable when setting these boundaries for yourself. The key word here is balance. Think about your life outside work and prioritize what is important. During your nonworking hours, don’t let work creep in. Turn your email off and promise you’ll return to the problem.
These boundaries can change over time, just as you and your business change. Revisit your work/life goals often and assess whether they’re helping you achieve a balance in both areas. Feel free to make adjustments to get the best out of both areas.
9. Consider Your Reputation
Reputation can make or break a small business’s success. The quality of your work and customer service are critical to your company’s long-term success. Word-of-mouth is a powerful business tool — if customers rave about the quality and efficiency of your work, word will spread and could lead to more business for you. Negative reviews can have the opposite effect, which can be detrimental to your business, especially in its early stages. While you shouldn’t be afraid of one negative review, many can mean trouble.
Ask yourself what matters to you as a service provider and how you would like your customers to perceive your services. What is meaningful to them, and how can you provide it? What would your ideal customer review look like if you read it online? Set goals based on the answers to these questions. If customers value efficient and good-quality work, consider how you can meet their expectations. You could include a personal touch, like a follow-up phone call to find out if they’re satisfied with your service.
Once you have reputational goals in place, actively work toward achieving them with every project you complete. Be on the constant lookout for how you can improve your projects and cement your reputation in the community. Doing so gives your business more than clients. It allows you to become a trusted service provider who can always be relied upon to do the job.
10. Invest in Marketing
No business growth plan is complete without marketing. As you grow, you have to get your name out there. Word of mouth is a massive asset for contractors as potential customers explore reviews online when looking for the best option. Your business must appear professional and capable of drawing customers. Some simple marketing tips to help grow your business include the following:
- Manage your online presence: Your business needs a professional website to be competitive. Ensure potential customers can easily find you using online channels such as Google Business Profile. Keep your operating hours and contact information up to date, and include a form on your website where customers can contact you. Try and respond to queries as quickly as possible.
- Compile testimonials: People often do a great deal of research before deciding whom they’re going to work with. Collect reviews from satisfied customers and display them on your website, homepage or dedicated testimonials page. Pay attention to online reviews and respond as quickly as possible, positive or negative. Stay calm and professional in the face of less favorable reviews. Potential customers will pay attention to this.
- Show people who you are: Your business values and mission must translate into your online presence. Take a critical look at your website and the values it communicates. Will it show people who you are as a business? Share your values and personal story on the About Us page of your website, and create and share valuable content with your customers.
- Use social media: Social media is valuable for connecting with potential customers and promoting your business. Sharing photos, blog posts and videos through social media expands your reach and helps you grow your potential client base. Consider which forms of social media are best suited to your business, and stay active on these channels. You can also launch paid advertising campaigns on social media platforms.
- Maximize your successes: Use your successes to build your marketing presence. Have a section of your website devoted to highlighting recently completed projects. Stay consistent with your social media posts to build hype surrounding your projects. Keep people engaged as your business grows to maximize future expansion.
- Evaluate your marketing strategy: When your marketing strategy has been in effect for a few months, take the time to quantify your progress. Have you generated more leads and clients? Use online tools to analyze what’s working for your business and what isn’t, so you can update your marketing strategy and tailor it to further growth.
- Get paid for your work: It may seem tempting to work on a complimentary basis in the beginning stages of your business. Working for free allows you to accumulate experience, but it also devalues your business. Your time and expertise are worth money. Working for free gives people the impression that your business isn’t ready to meet their requirements.
11. Outsource Specialized Tasks
Running a business is time-consuming. Play to your strengths and stick to what you’re good at instead of allowing yourself to become overwhelmed. You can’t do everything yourself. Even if you could, it’s unlikely the quality of your work would be the same as a specialist in the field. Although outsourcing is an expense for your business, it’s an investment in the long term.
Consider hiring an accountant, for example, instead of attempting to keep the accounts up to date yourself. You can also look at outsourcing marketing experts if your business could use an image overhaul.
As your business grows and you become successful, you can expand your portfolio by hiring subcontractors. Specialists will improve the overall quality of your work and provide faster turnaround times without sacrificing quality. They allow your business to branch out and take on more projects, which is part of the growth process.
12. Network in Your Industry
Building a network is an integral part of business success. People remember positive interactions and are likely to return if they’ve had a pleasant experience with your business. Build positive relationships with everyone in your network, whether customers, subcontractors or competitors. They’ll remember the experience they had with you, making them likely to hire, work with or recommend you.
Expand your network by attending business conferences, events, charity functions and luncheons. It’s an excellent way to remind people about your business and continue making new connections.
Your customers form a vital part of your network. Make a point of putting them first and catering to their unique needs, and they will notice. They’re likely to return when they need work done and recommend you to friends and family if they see you going the extra mile to make their experience positive. How you present yourself within your network goes a long way in cementing your reputation and allows you to keep growing your business with a group of like-minded and trusted customers and colleagues.
13. Stay Persistent
Running or growing your own business is hard work. The highs and lows can be draining. It’s best to stay prepared, motivated and proactive during the early growth stages. Stay focused through the good fortune and the challenges — don’t allow yourself to become complacent when things are going well, and don’t give up when challenges arise. Stay calm and rely on transparent thinking to see you through.
Motivation helps you keep a positive mindset in business. Refer to your vision statement often to remind yourself why you’re not giving up and refocus on your goals. It’s also crucial to have a backup plan for your business. If you hit a substantial speed bump during your business journey, you must be able to see yourself through the bad patch so you can get back on track with your long-term goals.
Although there are challenges, running your contracting business is extremely rewarding — stand firm in the face of setbacks. Keep pushing forward, and you can look forward to much success in the long term.
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