The entrepreneur looking to operate a profitable contracting business can find success with detailed planning and proper execution. By consistently addressing the most critical elements of the business, the contractor can overcome obstacles and ultimately achieve substantial success.
The Importance of Planning
Contracting on all levels has become increasingly sophisticated as tools have emerged to assist the contractor in controlling overhead, increasing labor efficiency and maximizing profit potential. Although to some degree successful contacting continues to contain an element of art and instinctual intuition, it is important to recognize that profits are highly dependant on establishing true and accurate costs.
The question of how to run a profitable contracting business always starts with developing and adhering to a well designed and executed business plan. By addressing important issues such as market identification, products and services and sources of financing, the contractor creates a document that will serve as a blueprint for creating a disciplined approach to achieving the envisioned objectives while avoiding significant pitfalls.
It is also important to create a mindset that maintains a clear focus on the targeted goals and objectives. Contracting is filled with potential distractions and business dead-ends. If recognized early, this wasted time and energy can be applied to far more productive endeavors instead.
Markets and Sales Strategies
Contracting is an extremely diverse industry that includes a variety of disciplines and markets. Assuming the trade has been selected and the correct licenses have been obtained, it is important to identify the appropriate target markets.
This typically means focusing on either residential or commercial construction and specializing in ether new construction or the retrofit market. For all trades including general contracting, there are stark distinctions in the clientele, sales and marketing efforts and labor structure for these differing environments.
Contractors in the new construction market require people with accurate estimating skills and sales people with an ability to develop ongoing relationships with developers and general contractors. Since these associations potentially endure through many years and different jobs, it is important to have industry qualified people who can deal with deadlines. They must also be adept at stress management while maintaining their composure as they work through complicated matters in a demanding time frame.
In the retrofit market, involvement with customers tends to be more limited, often ending when the job is completed. Therefore, the sales person must have the capacity to gain customer trust quickly while possessing the skill to address unusual construction situations rapidly and accurately. The quality salespeople in the retrofit business also have the ability to self generate leads and orders. This is especially important since unlike new construction which is often a public bidding environment, the retrofit business is marketing and advertising intensive
Regardless of the focus of the business, key metrics should always be used to measure sales productivity even if the owner is also the primary sales person. Among these tracking mechanisms are the number of sales calls per week, the number of estimates and proposals per week and the number of signed contracts and their dollar value per month.
Showing page 1 of 212next
Similar Posts:
- Guidance for New Withholding in North Carolina
- Why Knowing Acronyms In Government Contracting Is Critical
- Problems with Buy American legislation
- Area feels more pain in slump
- How to Calculate the Hourly Cost to Run Your Business
