When you have worked as a contractor for a while and want to expand and establish yourself in the industry, there are a number of things you need to consider. Whether you are a contractor acting as a self-employed tradesman, leading a team of contractors building a home, or contracting services to complete a job, we’re here to help you define what you should bear in mind as you scale.
Among contractors, there are numerous business failures. While it is not easy to pinpoint precisely why a business fails – and a few do – the general consensus is that almost all fail because they try to grow too big too fast, and this means some of them end up running out of money. money and did not last their first five years.
It’s not reflective of other business models that tend to do better, even if they try and thrive early on. With contracts, scaling up is more of a financial investment and as a result there’s more inherent risk. Moreover, raw materials cost money and the nature of contract work is harder and more unstable.
#1: Your Financial Problems
When you upgrade, you should do not neglect your finances, either as a company or as an individual. Improper financial management, improper budgeting, poor cash flow, lack of cost control and poor project management can all lead to precarious financial situations for new and existing businesses.
When you’re a contractor, it’s not only your creativity and technical skills that matter – it is extremely important that you’re financially savvy and able to maintain the one commodity that’s most significant to your business; Money. As a side note, if you do not have one contractor insurance, then get this over with before you even consider growth. You’ll be glad you have it when something goes wrong. Even the best contractors will have bad experiences and contractor insurance can save your business.
#2: The Growth You’re Experiencing Right Now
Even if you’re driving growth and expanding your profits, it’s important that you don’t neglect current growth and fail to increase your resources. Fast-growing businesses are often unable to keep up with demand, and the quality of work suffers as a result.
Equipment shortages are one of the things you are most certainly to encounter as a contracting business experiencing organic growth. This is made worse if you’re currently planning and driving growth because it is simple to overlook this smaller organic growth and fail to account for it.
#3: Factors Beyond Your Control
There are some things out of your control that shouldn’t be ignored. Material shortages, economic downturns, and periods of high inflation can all have a direct impact when you want to grow your business and there are times when, no matter how much you want it, you should not pursue growth. During a bad economic climate, it will all the time be better and more prosperous for you to wait.
Also, pay attention to any clients you have had bad experiences with and try to fix any underlying issues or problems that exist. Even if the problem is not your own doing, biting your tongue and trying to peacefully resolve unresolved issues can aid your growth. How? Because there’s nothing worse than a previous negative client seeing that you are trying to grow your business and then crawling out of obscurity to talk bad about your business and try to stunt your growth.
#4: Traits of a Successful Contractor
There are quite a lot of contractors and contractor businesses out there, and this is excellent news because it teaches us a lot. Successful contractors and their business share some traits and traitsFor example:
- Strong training for new employees
- Good relationship with contractors and other companies
- Competitive salary levels for your staff
- Great benefits for your staff
- Very good communication skills
- Good financial management
- Ability to engage directly with projects and manage them efficiently
- Good creditor and debt management
- Ability to stay on top of industry trends
There are a few more, but these are some of the most significant traits and traits. Notice how many of them include the word “manage” or “management” – that is what running a business is all about, good management.
If you run a contracting business and see clear success, then you might consider upgrading. It’s an excellent idea and can work wonders further, but it is vital that you plan any growth properly; don’t rush and don’t neglect the evident.
