What a Contractor Needs to Do to Become Successful

What a Contractor Needs to Do to Become Successful

By Diane M. Calabrese / Published August 2020

Photo by iStockphoto.com/z_wei

Work hard. Take care of the small stuff and the big stuff. Have a bit of luck. That is as succinct an account of what a contractor needs to do to become successful as we can give.

Backing up, though, it’s important to recall that the original meaning of the word “success” is outcome or result. Yet the connotation of a positive outcome or result is now inextricably tied to the word.

By keeping the original meaning of success in mind, no one can ever be disappointed. In every dimension of life, something is gained in trying and having an outcome, even a less-than-positive one.

Many contractors who do not succeed in one niche move to a different one and achieve excellent results. A contractor may launch a business offering comprehensive cleaning services to homeowners, including exteriors, decks, driveways, and windows, only to discover more specialization works better. Decks and windows might be jettisoned. Or, decks or windows might become the sole focus.

Successful contractors become so by making adjustments as needed. Flexibility counts not just in the early days of the company, but throughout its lifespan. Markets change.

Methods change, too. Successful contractors keep pace with methods. They adopt new tools and techniques to gain efficiency and to better satisfy customers.

Expeditious, polite, and contained to the extent possible…Those are some of the characteristics customers look for in contractors. There’s no more visible message to the world about the capabilities of a contractor than what passersby (and neighbors) observe when a contractor is at work.

Many people connect with a contractor after seeing the contractor at work. They record the name of the company on the truck. Such a real-world link to new customers may beat referrals from online reviews.

Perseverance is frequently noted as a key to a good outcome in business. True and not true. Sometimes a contractor must simply cut losses and move on.

A contractor who keeps receiving callbacks from a residential customer who complains about algae shadows still visible or another depression found in the siding, may simply be impossible to satisfy. If the customer will not complete payment, the best course is probably to collect the possible and move on—after learning from the experience.

Successful contractors never give a contract to a customer who does not specify the limitations of cleaning and include a description of areas that may not be pristine following washing. Customers who think that soft washing a roof or an exterior will be the equivalent of getting a new roof installed or a fresh coat of paint must be educated (gently) before a project begins.

The loss-cutting applies also to the inception of a business. Being in the wrong place at the wrong time is a wholly impossible challenge to overcome. A contractor who starts a business just before a natural disaster occurs (and stops all from considering routine home maintenance and cleaning) may not be able to wait out rebuilding. It is best to rethink the focus or the location of the business.

Luck is always an element in business. Contractors can improve their chances of having luck on their side by doing everything possible to anticipate problems before they occur. Having chosen the wrong place and the wrong time to start a contracting business is one problem that should occur rarely.

Individuals aiming to establish a contractor business, or expand territory or services offered by an existing business, all have the obligation to evaluate the market. Are there customers for the service? If there are, can they afford to pay for the service?

A focus on cleaning dairy barns in an urban area would be ridiculous. But other niches might be equally unreasonable. Decks might be nice. Really? Are there enough decks to clean? Is deck cleaning alone a sufficient niche or must deck restoration be part of the repertoire.

Acknowledge the competition, too. It’s easy to check on how many other contractors in the area are offering the same service.

Successful contractors also know how to balance—and “read”—customers. There are customers who know exactly what they want and will pay for the service immediately. They are not interested in additional services or payment plans. They want a certain job done. Successful contractors know how valuable such customers are to the revenue stream.

Customers on the other end of the spectrum take more time, usually because they are less certain about what they want. Contractors that serve residential clients must take care not to lose too many hours on give-and-take with such time eaters. Contractors that work on commercial projects must factor the time it takes to respond to bids into the cost of doing business.

Successful contractors are realistic about the return on every investment, including time. They do not dream about the big contract that will provide months of income while forgoing income. Cash flow cannot be ignored.

Through The Customer’s Eyes

Clairvoyant they are not. Successful contractors, however, have a way of seeing things through their customer’s eyes. Some contractors have the knack from the start. Most learn from experience.

A big assist to seeing things through the eyes of customers is the bounty of information state and local governments, as well as non-profit agencies, put in the hands of consumers. The information is consolidated online in how-to-hire-a-contractor or hiring-a-contractor formats. A successful contractor checks what licensing entities—states and municipalities—are telling consumers to do when hiring.

Thus, successful contractors expect customers to ask for a contractor license number and references. The smoothest way to handle such requests is to pre-empt them by putting the information on business literature and contracts.

Some other advice to consumers includes checking on the litigation history of the contractor on the state court system’s website. With the sophistication of search engines, consumers can churn up litigation results without that step. Successful contractors are prepared to answer questions about negative reports prospective customers find. (And reasonable customers will accept concise explanations because they know that things happen.)

One piece of advice to consumers is to be wary of what seems to be an unusually low price offered by a contractor. Successful contractors are in business to make money. They become successful because they do make money on each project completed.

In most states permits required to do work on a residential site are the responsibility of the homeowner. Some municipalities will allow the contractor to take on the responsibility of permit acquisition. And successful contractors see stepping in—and charging a fee for the service—as a logical way to streamline and schedule work and provide an added service to the customer.

Successful contractors know that working in areas with HOAs may require some mettle. Homeowners associations typically have more restrictions on hours of work, noise, and power and water use than do municipalities.

A power washing contractor may not need a municipal permit just to clean. But if any structural activity is going on—e.g., deck restoration—some places will require a permit. Contractors will require NPDES permits for wastewater disposal in most places. Successful contractors have all required permits in hand and keep them up to date.

Analytical Approach

Successful contractors want to be doing. But before rushing ahead with new ventures—or their first venture—they complete a thorough analysis.

The analysis is part market research and part competitive analysis. Is there a demand for a service? Is the demand so well met that the market is saturated with competing businesses?

Both questions can be answered with excellent tools from the U.S. Small Business Administration (SBA). Start by linking to https://www.sba.gov/business-guide/plan-your-business/market-research-competitive-analysis.

The analysis tool from SBA provides small business data and trends. And it does so at no cost. (There are vendors who provide such information, as well. They do so for a fee and offer more precisely tailored information.)

Among the links to check out about markets and competition are those with statistics on business conditions and the employment and unemployment for a region. If an area has had many recent business failures or unemployment is high, launching a service business could be difficult. Yet some localities may be so in need of services, such as contract cleaning, that going forward with a startup may be a path to success.

Demographic data and earnings data are also easily accessed through the SBA market and competition portal. Both are important in determining whether a pool of employees will be available at an hourly rate of pay that fits the business plan for the contractor. The two sets of data also help a contractor gauge whether the community structure includes enough potential customers.

Finally, successful contractors instinctively assess the market in which they work whenever they have an opportunity—on the job, playing golf, at a child’s soccer game. They never hesitate to talk with business colleagues in related and competing companies to keep pace with trends—i.e., what customers want.

Let’s sum it up: Success requires hard work (and a bit of luck). 

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