Call the Architect, Owner, and/or Owner Representative and find out who the bidding General Contractors are. This is  The most important insurance you can have. It’s a big myth that the low bidder always wins the job. Where is the “noise” coming from in your business? Tip 9: Start getting picky. It is inevitable that someone will damage your work on the job. 7 Ways To Build a Successful Construction Business. How the IRS Classifies Independent Contractors, Here’s a list of construction associations. If you want to grow a profitable construction business, you need to focus on these four key disciplines: margins, metrics, methods and meetings. Next, scale the drawing and start measuring using the Linear Tool, Area Tool, or Count Tool. But if you are the highly specialized contractor, that almost guarantees a successful project. Grow Your Business. Basically if you do a good estimate, run the project and perform the way you were supposed to, you will never have an issue with bonding. Lastly, another way to build up your perceived value is branding your company. But, before you get too far involved, here are 15 ways that you can build a contracting business that’s going to last or grow the contracting business you already own. And, don’t be afraid to spend a couple of bucks advertising your business on social networks like Facebook. Once you get what you need, instead of sending through email, print the documents and GO VISIT them. Try to get a meeting with the decision maker right then an there. So the electricians need to cut up the wall and  and then it has to be patched. Construction is a cost-based business. Because of my background as a Superintendent, I opened up the Mechanical plans and figured out the vertical space requirements using the height of the ducts, required strap height, an additional gap for installation purposes, etc. As an entrepreneur, popular speaker and business coach, he helps business owners build profitable companies. To create your own brand in the construction company, you need to spend both time and brain. They might be able to hire you directly. Today’s construction industry is fluid in the sense that there are countless opportunities to grow your construction business quickly if you land the right job. General Contractors (ask to get on their bid list), Construction Management Firms (sometimes they hire subs on smaller projects directly), New Construction Projects (ask for the person in charge and ask if they need your trade for any jobs). Where do you see the most challenges and issues in your business? It’s a very simple principle that you can follow that will, at a minimum, quadruple the chances of you getting the job. It is important to build a good team that meshes well when trying to build your construction company. While expanding your construction firm can lead to increased profits if done right, it brings greater challenges than with other businesses. This only works to cover you and any officers of your company. This also covers pre-construction costs such as estimating, administrative task like contracts, meetings, site visits, etc. And I let the General Contractor know that I am doing this to help them. Your construction consulting and remodeling business isn't likely to become successful overnight. Most contractors are smaller operations, and using out an estimating services is a great way to get those projects bid ASAP. For example, if you're doing electrical work and notice that a pipe has a minor leak that you can easily repair, you can fix the pipe instead of having the customer call a plumber. And you aren’t perfect. Our team has worked with over 900 General Contractors, Developers, and Subcontractors, nationwide and we’ve seen what works and … Essentially, you are creating an addendum to your contract. If you build a great team, implement these strategies and principles, you’re pretty much guaranteed success. If you send your bid to all the bidding general contractors,  you instantly multiply your chances of winning because  it guarantees that the winner will have your bid. Here are 12 tips to help you successfully grow your construction business: 1. You can’t plan for every scenario, but always go over your proposal before jumping in, to make sure that you have everything that you need to complete the job. Make it a point to collect their business cards, leads emails, etc. Call them and ask them if you can send them a bid AND ask to get on their bid list. I would also recommend that you set up automated email and social media messages during off-hours. “Angieslist” and “Houzz,” they both are great to expand construction business. It is absolutely essential to have a user-friendly website that shows up in search engines. Seek advice from your accountant on the financial viability of your ideas. Today, that means having an online presence and interacting with your specific audience through email, social media and blog posts, where you demonstrate how your business solves their problems. For instance, let’s say that you’re almost done with a bathroom renovation and find out that you’re missing a $5 part you need to finish. What actually win the job is going to be your perceived value and expertise in this specific project that you are bidding on. What you want to do is add value and trustworthiness over time. Construction is not a "grow or die" business. What’s the solution? This is the same in construction. Copyright © 2020 Entrepreneur Media, Inc. All rights reserved. We use the numbers from the database and make modifications to labor and material pricing based on field conditions. Go to Google Maps and make a list of potential clients and start visiting their offices and introducing yourself. When GCs start blasting out emails to all the subcontractors in the area, you’ll get an email and you can contact the owner as a potential GC bidder. Find out who else is bidding the job, and send them your bid. Buffer. This is a big mistake. There are way too many contractors who just know enough to do the job and don’t really offer any additional value other than their labor. You can hire skilled workers as piece-workers on a subcontracted basis, or you can bring in hourly labor from Subcontractors. Your Project Manager will likely spend half of his or her time managing administrative duties, and the other half managing the field alongside the Superintendent. DO NOT use construction agencies to staff your project. While niche markets can give you a competitive edge and help make you stand out, they’re not always as large as businesses that reach a wide audience.. For bigger projects, you might have to use only 5% mobilization. Growing a business of any type is certainly not without its challenges. When sending out bids, factor in the costs involved with the project, particularly materials and labor, and give the customer a ballpark estimate. Form Your Own Brand. For instance, you can ask some of your fellow contractors if they’ve had any experience with this customer in the past. Once you’ve spent the time to estimate a project, it is important to write a winning proposal. If they say yes, you can bid directly to the Owner AND you can bid to the bidding GCs for the trades of your choice. They might have a project you can take last-minute. A lot of contractors get stuck in this middle area where they’re forced to hire more people because they can’t handle the workload, but profits aren’t any higher. Cash flow is the most important part of a business staying afloat and growing. You should have the mindset that you are the best in your industry. After settling on a system that uses the best practices, you next want to conduct a comprehensive assessment of your company. When I worked at Caroni, the 20th of the month was the most important day of the month and we would stop all operations in the office until the billings got done. Tweet. I understand that it's asking a lot to have someone handle the phone all day, but if you don’t want to lose customers to your competitors, then that's necessary. If you are a subcontractor, consider investing in bidding for drywall and painting. We’ve estimated or built over 3,000 projects, and I’ve never seen a perfect set of drawings. Have a section for your total amount, followed by your payment terms, and any other provisions you want to add. Related: Small Business Is Using More Contractors. Amplify your business knowledge and reach your full entrepreneurial potential with Entrepreneur Insider’s exclusive benefits. In my experience, getting these types of workers is a waste of money and will make you look very bad. This covers upfront costs you’ll need to cover such as equipment rentals, set up fees for scaffolding, lifts, etc. I’ve gotten pricing from my supplier. They’ll likely have some pre-qualification forms and requirements to submit. Step 3: Spend Your Finances Prudently. We’ve seen material prices tend to be pretty close throughout the nation, but labor fluctuate widely. USA.Gov – https://www.usa.gov/become-government-contractor. One of the greatest contributing factors to longevity in the industry is customer loyalty and reputation. Change orders are the lifeblood of this business. If you are just starting out or your funds are limited, you might not be able to hire an in-house employee, so hiring an estimating firm is a must. Pin. Now when it comes to a construction business, your workers and staff are the ones who actually represent your business or company. Here’s a list of construction associations that you should consider joining. I wouldn’t recommend turning away a customer. However, Angieslist works in US only. It is essential to put in real effort and remain committed. You do this with your price, and you include some qualifications that don’t give away your method. Get heaping discounts to books you love delivered straight to your inbox. So let us know some such interesting facts that help in laying the foundation of a successful small construction business. They might say: PM/Owner:  “We have a few other projects we were awarded that I want you take a look at…..”, Get in contact multiple ways and channels. 2. Take this time to be thorough. Make it a point to collect their business cards, leads emails, etc. So when I submitted the change order to the General Contractor that was backcharging this idiot,  I calculated my total cost with profit and I multiplied that number by three. We highly recommend you get yourself an in-house Estimator employee to help you with your estimating. However, they should be reasonable in allowing you to bill for more upfront since it does often take between 30 and 90 days to get your first check. And another perk of working of the Government – there is no such thing as a recession or ups-and-downs. How valuable is that to your business? They only hire on price if that’s all they have to go by. It’s not a truism for construction, however. Sometimes this person can be a family member or retired contractor; other times it may be someone you have to hire. If you specialize in a specific niche, you can position yourself as an expert so that everyone who is going to be performing that type of project comes to you. Everyone thinks clients hire based on price,  but that’s not true. For example, building a restaurant is not the same as building a high-rise. Always keep in mind that you want customers who deliver a solid ROI, instead of those who give you headaches. You also get a chance to start bidding for a new General Contractor. So you need to convey this expertise to them. Home > Articles > Ultimate Guide to Grow Your Construction Business Growing a construction business IS EASY if you follow certain proven strategies. As well as taking proactive steps to grow your business, you’ll want to take preventive steps to protect it too. Is your estimating team making mistakes because they are going too fast? The interview method goes hand-in-hand with the addition method. A simple message informing customer that their message was received and they’ll receive a response within 24 hours should be enough to keep them satisfied. So take away the headache and pay the few hundred bucks a month that it costs to cover your employees. If you bill heavy here, the General Contractor will be the one footing the bill. If you are an established expert in a specific type of construction, you already get the title of expert without really having to prove yourself. Be the one that helps the GC or other trades coordinate the job. 2. This shows you how much money you have coming in and how much is going out. Here’s the deal, most contractors are so busy working in the business they neglect the one thing that matters most… Sales. I would just charge a decent rate for this work. Without them you can be certain that homes and offices would literally fall apart. Most contractors use an Excel sheet, and some handwritten notes to run their companies. Forge a solid reputation and secure a solid client base with these 7 tips. Learn how to get leads on autopilot, bid jobs faster, and close more sales. Here is a simple template to get you started: Next, to estimate the project you are going to need a database of pricing. So, why not contract out all of your bookkeeping and accounting needs to a freelancer or CPA? One of the ways contractors try to get around this is by using a Worker’s Compensation exemption. Head over to your set of plans, and go to the title page or sometimes the title block. They are based on actual contractors and suppliers providing pricing to them. One of the best ways to grow your constructs company  is by offering multiple trades. It could simply be your ability to provide services specifically for offices, as opposed to other contractors, who solely focus on residential properties. How do people rate your business and customers service. I recommend using the Title Page Method you just learned above and ask the Owner to bid their job. But, before you get too far involved, here are 15 ways that you can build a contracting business that’s going to last or grow the contracting business you already own. Reliably providing an essential service is a good way to grow a business you will be proud of. If something seems obvious to you, it might not be obvious to your client. To save you this aggravation, learn how to spot these customers before agreeing on a project. We work with Developers, General Contractors, Subcontractors, Architects, Owners, Owner Reps, Lenders and more. People have to be free to do their own work and make their own decisions. The more bids you put out, the more chances of getting jobs you have. Building your perceived value is essentially going to be a combination of implementing many of the strategies in this guide. That means starting off you only have a 10 or 11% chance of winning the job. After that, network in your community both online and offline by attending chamber of commerce meetings or answering questions in a local newspaper forum. You often can get much better pricing from them with this arrangement. How are you going to estimate them? Now, a lot of contractors think this bond will cover them if they make a mistake on the price I need to walk away, but that’s not true. Adjust your business plan. Hi, my name is Daniel Quindemil, and I’m the founder of I AM Builders. And, always stay on top of your invoicing. Sign up today and one of our team members will contact you shortly, Deduction for Alternative EIFS Trim Installation:   ($30,000), construction division here in South Florida, https://www.usa.gov/become-government-contractor, Ultimate Guide to Grow your Construction Business for 2020, 27 Ways You Can Get More Construction Jobs in 2020, Ultimate Guide to Construction Estimating and Takeoffs for 2020, Ultimate Guide to Grow Your Construction Business, New Construction Project or Developments (ask for the main person in charge), Construction Management Firms (or large GCs that usually hire Sub-GCs), Mall Leasing Offices (ask how to become a preferred contractor), Universities and Colleges (ask how to become a preferred contractor), Large Residential Developments (they are usually run by property managers, or they need contractors for renovation projects often), Empty Tenant Spaces at Malls and Strip Malls (ask the leasing agent to be updated on these spaces – this a great opportunity because if the space becomes filled soon, you’ll be fresh in their minds. The solution is to hire an estimating firm like us to manage your construction takeoffs and estimates. If it works, you’ll get a phone call saying: Potential Client:  “Hi John, I got your proposal and I saw your alternate for EIFS trim installation. Ten years later, the claim is still paying for that person’s living  arrangements. Keep in mind every company has growing pains. But rather it’s important to bid the right clients and bid them extremely accurate. When I called to complain to the agency they told me it was too bad and I was the responsible to make the payment. It’s amazing what you can learn from other experts on Google and Youtube. They can tell you who is bidding. HOW TO GROW A PROFITABLE CONSTRUCTION BUSINESS – 4 KEY DISCIPLINES. They’re about securing more profitable projects and keeping your current customers happy. 3. Setting your Goals and Fixing Existing Issues. Whatever you bid today, you’ll  see the results 3-6 months from now. However, when you go above and beyond for a customer, you'll probably earn a lifelong oner. Databases like National Construction Estimator offer you highly accurate pricing tailored to your project’s zip code. Older Residential Communities (that might need paint or other remodeling), Realtors (Commercial and Residential – their clients always need remodels in new spaces or homes), Suppliers and Vendors (they come across all the projects since other contractors call to bid them. Owners and Architects are notorious for asking to change things throughout the  progress of construction. No doubt choosing a legal entity for a business such as a construction company is some worth straightforward especially if you decided to grow the business big. Strategy 7 Tips to Successfully Grow Your Business Regardless of the industry you are in, you can be highly successful if you live by these very simple ideologies. This one is a no brainer. Means you have to bid 11 jobs to get ONE. The thing is if you’re talking to an estimator, they aren’t the final decision maker. Staying small also reduces stress since the workload is easier to manage. My insurance agent told me of a case that a worker for a roofing company fell off and became a quadriplegic. Then provide Area Modifiers to adjust for pricing for each zip code. * *NOTE: The numbers used in this exercise are simple in nature and should be readily available even if your books are a mess. This year we helped Handymench secure a US Government contract to build the US Embassy in Jerusalem. Share. And filing bankruptcy will likely not remove those types of liabilities from you. Just be careful that you don’t over extend yourself because I’ve actually even seen companies take on too much work that they can’t finance and go out of business. Now, if you happen to be a do it yourself are, then here is the way to estimate your projects. You can submit a plan only when needed, so it’ll keep your costs low. In construction, your people are your business. Be A Good Leader And Work On Your Team. I also try to hire right and believe in our people. I AM Builders is a licensed General Contractor and we focus on helping client grow their businesses in a construction fields. This article is part of our Construction Business Startup Guide—a curated list of articles to help you plan, start, and grow your construction business!. Lastly, make sure your proposals are well formatted, well written with good grammar, and looks aesthetically pleasing. What does this mean?”. Unlike what strictly online businesses do, though, you should also focus on marketing your business locally. Here are two methods for you to use to get leads instantly. If you are a Subcontractor and you are bidding for your General Contractor, you are probably bidding against three other Subcontractors. Bid as both a GC and Sub. Maybe even the doors. If you want to grow your construction business, you need to spend money on it. Related: Should I Hire a Contractor or an Employee? That’s why you provide specific services for your customers. Growing a construction business will require a significant amount of time and effort. As a General Contractor, you’ll have direct access to the Owner, which gives you the best shot of winning a job, but overall there are less projects out there. This is called a Change Order. This cost goes directly to the Owner. Areas like New York and Boston have labor rates nearly double the national average. For example, if there is a plumbing leak over the weekend and it causes major damage to other parts of the building, this is covered in General Liability Insurance. A deeper financial analysis should be performed at the time that you have more data available, but this is a good place to start. Margins. Even if you’re a general contractor, you’re probably not an expert in all fields. Whether you want to be your area’s next big general contractor, or you believe you can build a successful small construction company in a specific niche, getting into the construction business is a process. Build a great team. Is it with your field supervision? Industry associations, such as the Associated General Contractors, aren’t just great for networking. Adjust your business plan once you have done the investigation into how to grow your construction business. And their contracts are always wage-scaled. When you have an effective system in place. Furthermore, when searching for the right bank or bonding company to help grow construction business, you should ask contractor friends, builder’s association, competitors and insurance agents for recommendations. To avoid any confusion, clearly state your business hours on your business cards, website and social channels, and of course state your physical location.