8 Best Practices In Running A Small Contracting Business

Construction is a huge industry, which is always ready to welcome another small contracting business. However, only about 10% of all startups survive. Why does it happen?

Running a small contracting business requires a unique approach without serious expectations. Knowing when to stop or go forward is vital to the success of your company.

Meanwhile, the right investment of time and money can dictate the size of profits at the end of the first year in business.

In this article, we’ll talk about the best practices in running a small contracting business to help you boost your profits and avoid common mistakes.

1. Project Scope Clarity

One of the keys to a successful construction project is identifying the scope of work clearly. You have to understand what the project is about and so should the client. Be as clear as possible with the stakeholders about the size, volume, and budget of the project from the very beginning.

Make sure that the budget shared by the client can cover the entire scope of work. One of the most common mistakes construction workers make is trying to lower the expenses when describing the volume of work. In the race to please the client, they end up making the wrong calculations.

As a result, clients face unexpected expenses at the end of the project and give the company poor reviews.

Be realistic with the money, which should be spent on the project and allow yourself some cushion to fall back on. It’s always nice to have some money left at the end rather than spending extra, isn’t it?

2. Detailed Contract

A clear construction contract is a key to the lack of problems during the project. Meanwhile, it can help you enjoy peace of mind when discussing project details with your clients. The most important parts of the contract are:

•         Cost – describe cost in detail, including possible extra expenses, and all the rates. Before signing a contract, you should get an explicit confirmation from your client.
•         Schedule – the schedule shouldn’t be as precise as the cost since construction work is affected by many factors. That’s why you need to mention a period of time instead of exact dates.

According to general contractors in Florida, another important thing to consider in the contract is the authority. Who has the authority to make decisions during the project? By designating one person for decision-making, you can avoid numerous problems and confusion in the future.

3. Project Details

When you manage a construction project, details maybe even more important than the goal. It’s up to you to focus on details before their sudden appearance forces you to make serious changes to the timeline.

Take the time to single out details that need extra discussions and budget in order not to face greater issues down the road.

Details seem to become invisible when you are looking at major deadlines. A good contractor can identify the problematic components of the job and discuss them with the team before it’s too late.

4. Extensive Communication

Lack of communication is the key to all problems during a construction project. Failing to communicate about small issues with the client could lead to serious consequences when the project is over.

It’s up to the contractors to arrange simple communication channels with the client or the person authorized to make decisions.  

It’s important to understand that construction projects come with numerous nuances, many of which appear during the process.

Share the need for regular communications with your clients so frequent questions don’t come as a surprise to them. It’s always better to ask and discuss then to redo.

5. Latest Trends

Construction business changes on a regular basis. From new tools to new approaches, small contracting companies always have plenty to learn. The worst thing you could do is to stare blankly at clients when they tell you about the latest developments in your industry.

It’s up to you to choose a person who will regularly research construction trends, attend conferences, share the experience with other companies, join communities, and much more.

6. Marketing Efforts

Even the best contracting company can’t survive without proper marketing efforts. The most important marketing channel for a contracting business is word-of-the-mouth marketing.

It’s extremely important to make good relationships with existing clients and give them incentives for leaving reviews and recommending your company to friends and family.

Such approaches as email, social media, PPC and others are valuable as well. Even the smallest business should have a marketing team.

7. High-Quality Website

These days, running any type of business is impossible without a website. The website doesn’t just aid in marketing efforts, it allows your clients to learn as much as possible about a company.

The website is the “face” of your business. It’s the first thing your potential clients look at. That’s why it’s important to invest in the design and keep the website in top shape.

8. Excellent Team

It should go without saying that construction work depends on the team that does it. Even the most talented business owners can’t help the company survive if they choose the wrong team.

Take a smart approach to selecting experienced construction workers with a desire to make your company thrive. Make sure you offer the right incentives.

Final Thoughts

Running a small contracting business requires a serious approach to contract details, work scope clarity, communication, the latest industry trends, and marketing efforts.

If you want your company to be among the 10% of survivors, it’s up to you to do considerable research about best practices in your niche and invest time and money in marketing efforts. 

By Maria Victoria MacAraig – Contributor  |  20/09/2019