5 Principles of Contracting Success
Why do some contractors succeed while others struggle?
Are there some guiding principles that any contractor could commit to that would help them be successful?
Well it just so happens there are.
When it comes down to it, business is about consistency and efficiency. Successful contractors embrace this fact and operate their businesses guided by principles that help them maximize their time, effort, and profit.
Here are 5 principles that I’ve uncovered while studying successful contractors.
1. Focus on what you do best.
It is a truism in contracting that you don’t make the most profit delivering services you are terrible at. That fact makes it critical to identify what you do best in your business and build your core offerings around your strong points.
Failing to focus your business on what you do best means you are not focused in general and are most likely operating inconsistently, with no definable market identity, or strategic plan. The unfortunate result is often frustration, less profitable work, and uneven (or insufficient) income.
Take a look at contractors who are crushing it and you’ll see businesses with hyper focus, built around company strengths. The most profitable service offerings of any successful contractor stem directly from what they do best.
2. Qualify, Qualify, Qualify.
Nothing will waste more of your time than failing to qualify your sales leads.
Successful contractors know they can’t afford to waste valuable hours each month going to meetings that won’t result in signed contracts. Yet many contractors rush to in person meetings with no prior qualification.
The most important qualifying factor that has to be identified early on is budget. Revealing budget numbers lets you know your next step in the sales process. The lack of a realistic budget is a non started that should have you either pivoting the conversation to a smaller scope of work, deferring sales meetings until the budget is available, or deciding it best to refer the client to a different contractor.
Other important factors in a thorough qualifying process include confirming the project plays to your strengths, and that the client themselves will respect you as a professional.
3. Only produce proposals when it’s likely you will get the job.
Most proposals that don’t get accepted should have never been produced in the first place. The proposal itself will not rescue the sale if it was never really going to happen.
Before you even think about creating a formal proposal you need to have already agree on the problems to solve, scope of work and budget needed to solve them, possible start dates and timelines, as well as any objections the potential customer might have with moving forward.
If anyone one of those elements has not been clarified to your satisfaction then you are still in the discovery stage of the sales process, not the proposal stage.
4. Be comfortable with saying no.
It takes discipline, but saying no when you need to, no matter how uncomfortable it might be, is the most powerful strategy to protect your time.
Protecting your time means respecting your time. Saying no when you should means you value yourself. It means you acknowledge that there is limited time each day to accomplish the most important tasks in your business.
Examples of when to say no:
When a client wants to add to the scope of work but is not willing pay you for it.
When you are asked to produce an estimate when it has been identified they do not have the appropriate budget.
When you will regret saying yes to a difficult client or low profit project.
It’s not always easy to say no, but it’s often necessary.
5. Charge what you’re worth.
Successful contractors have no problem charging top of market rates because they know they deliver top of market services.
Struggling contractors believe they have to offer a discount to close a deal no matter how competent they are.
Consistently offering discounts is a bad financial habit. Lowering your rates when you are estimating, or otherwise monetarily devaluing your services because you are afraid of losing work is a race to the bottom. You’ll develop a reputation as being cheap, and you’ll only attract clients that won’t value what you or what you bring to the table. Keep it up and you will soon hate your business.
The bottom line is, if your strategy to land work is to be one of the cheapest contractors, you should also prepare yourself to be one of the least profitable contractors.
Charging what you are worth is a simple concept that many contractors have difficulty with, especially when they are first starting out. But ask any thriving contractor and they will tell you that their business changed forever once they had the confidence start to charging what they were worth.
Follow these 5 principles to build the best version of your business.
Next Article: Move the Needle for Your Business
About the Author: Wayne Lamarre is a construction marketing expert, speaker, and business development consultant, who specializes in helping contractors go from good to great. Contact Wayne to add fuel to your construction business.