When the market is hot, anyone can find work to do. There is so much demand that in most cases all you have to do to get a job is answer your phone or respond to an incoming lead. You put some numbers together in a bid and if the competition is weak or non-existent you win another job. Easy, right? Easy, yes but not very smart.
Building contractors that don’t have a marketing plan in place and don’t have a strong conversion strategy will struggle in the oncoming recession. Yes, a recession is coming. We just don’t know the timing or the severity. With 30+ years of experience in the construction industry and being a silent partner in a contracting firm, I have learned several things about what it takes to build a strong and sustainable contracting business. Here are the top 10 elements the most successful contracting firms have in place:
- Dominate and differentiate within your niche. If you offer the same products and services as everyone else in your market, you have no choice but to compete on price. What product enhancement can you add? How can you create more assurance about your company or product in the eyes of your customer? How can you create an unforgettable experience? Where can you add more value?
- Know your target market and communicate to them through the channels they hang out in. Who do you ideally serve the best? Who in your market is likely to say “yes” to your offering and has the ability to pay for it? Once you know your market, where do they hang out? Facebook? Instagram? Home shows? Wherever it is, focus your marketing efforts at the place you are likely to connect with your target market.
- Serve your market by offering tips and advice in areas of your “expertise”. Provide value first. Offer ideas, tips or some type of free inspection service. Doing so will not only endear your prospect to you, the knowledge you share builds your credibility as an expert in your field.
- Answer your phone and emails promptly. Show up on time. A slow response time and lacking punctuality is a common complaint of contractors. If you respond quickly, you’ll likely beat your competitor to the punch. Show up on time and you score big points.
- Everything you do should convey a professional image. You don’t need a brand-new truck. A clean truck with a professional logo will do. Add a nice shirt with your logo and branded paperwork and you will stand apart from the pack.
- Don’t bid, sell (serve) your potential client the unique value you will provide them. A fast-track to a short-lived business is bid among the lowest bidders. Sell your unique value and carefully explain what you offer that other contracting firms don’t. Note every added value item in your contract proposal. The vast majority of your prospects won’t buy on price alone. If they do, would you want to work with them?
- Get testimonials from your “raving fans” and stay in contact with them. The only way to build a raving fan-base is to provide exemplary work, backed by an amazing service experience. Continue to “touch” your customer base with ideas, maintenance tips, etc. and they will be your strongest referring source.
- Carefully manage your cash-flow. Cash-flow is the life blood of any business. Most failing businesses either start out with too little capital that is mis-managed or they “grow broke” as they try to scale larger and run out of capital resources. Keep significant cash on hand to manage the building cycles or access a line of credit to bridge over the lean part of the building cycle. Also, keep a tight rein on your Accounts Receivables.
- Continuously improve your business. If you aren’t growing, you will become stagnant. Look for ways to improve your craftmanship and the products you offer. Improve your business practices. How? Join an industry association or find a mentor who will help you see potential blind spots and employ best practices.
- Love what you do. The fuel that will drive you and your business is your purpose and passion behind everything you do. If you love what you do, that passion is contagious and your clients will feel it. Your passion is attractive and adds leverage to your word. Don’t love what you do? Find something that fuels your passion and hire out the rest.
Building a successful contracting company requires more than having good trade and project management skills, it demands good business acumen. There are many key components to a thriving business, and if followed will enable you to stop bidding and begin selling the unique value you offer. Said in a different way; once you build a business that can serve your clients powerfully, you will thrive.