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Contractors usually have only one of two problems: Getting the Work or Getting the Work Done.
If you are currently struggling with the first problem, how to get more work for your construction company, then stick around.
I’m going to give you three strategies that I use in my concrete construction company that have helped us grow our business tremendously.
What’s that you say? You aren’t a concrete contractor and you are wondering if these strategies will still work for your construction business?
I can assure you they’ll work for your company, too.
I’ve taught these strategies to different types of contractors and they’ve all had success.
These strategies will work for you no matter what part of the construction industry you are in.
The three strategies are:
One of the best ways to figure out how to get more work for your construction company is to determine what your customers want, and then give it to them.
To help illustrate what I mean, I'm going to use a hot dog stand analogy...
Let me ask you a question:
If you were to start a hot dog stand, what is the one thing you would want more than anything else?
Would you want...
While all of those should be considered, the most important thing you would want is...
a hungry crowd.
When you have a hungry group of people – like a hurried lunch crowd on a downtown city street with limited dining options – then most of the other things I mentioned above don’t really matter.
If your potential customers are hungry, they are going to buy from you.
You don’t have to offer gourmet hot dogs to entice them to buy.
As long as your food is acceptable, they’ll buy it because they need to satisfy their hunger.
On the other hand, if you don’t have a hungry crowd, then it doesn’t matter how delicious your hot dogs are.
Moreover, it doesn’t matter how great your signage is. And, it doesn’t matter that you are $0.80 less than the hot dog stands one block away
You see, if the people in your area are not hungry, then they won’t buy a hot dog.
Now, I know what you’re thinking:
“What the heck does this have to do with me and my construction company?!?!”
And my answer is this:
If you are wondering how to get more work for your construction company, then this concept has everything to do with you.
Let me explain…
You have to be sure that you have a “hungry crowd” for the services that you provide.
Whether you work with general contractors, home builders, local government, homeowners, or any other type of client base, you have to ask yourself: Are we offering them what they want?
Do they want what we have and are they willing to pay for it?
There has to be demand for what you are selling.
Your success is dependent on a big demand for your service. Let me give you an example of what I’m talking about.
Let’s say you really like artificial turf. It looks good year-round. It saves money on water bills. It reduces the demand for water resources. It saves time and money because it doesn’t have to be mowed or maintained.
And, you believe you can make a lot of money installing it for people.
For all of those reasons, you decide you want to start doing that in your area.
But there’s a problem.
In all your enthusiasm for this new business idea, you forgot to verify if there is a big demand for artificial turf in your area.
Notice I didn’t say “demand.”
I said “big demand.”
Just because your neighbor and your aunt want you to install it in their yard doesn’t mean there is a Big Demand.
Perhaps people in your market aren’t interested in artificial turf. Maybe they prefer natural grass.
Or maybe there are a lot of single-family renters in your area whose lawn maintenance is included in their rent payment.
Perhaps when people hear “artificial turf” they still think of that old fake grass that more closely resembles green indoor/outdoor carpet than the modern, highly realistic artificial turf that is produced today.
Furthermore, maybe the homeowners in your market are lower middle-class families that cannot afford to install artificial turf in their yards.
Do you see where I’m going with all this?
No matter how cool you think it is, and no matter how great it would be for your company to install it…
If there isn’t a big demand for it, then you shouldn’t do it.
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There has to be a demand for the construction services you currently provide, as well as for any services you are considering adding.
As stated in my hot dog analogy, you need a hungry crowd.
Trust me, I’ve learned this lesson the hard way.
If you know my story as a second-generation contractor, you know that I’m not afraid to try new things. My company has started several construction-related companies.
With every new company, I was sure it would be a smashing success.
But when we didn’t first ensure there was a hungry crowd for what we wanted to do, we were really just hoping the new business would succeed.
And what I learned is that “hope” is not a strategy.
Of the companies that we started, if there was a hungry crowd, then the sales rolled in effortlessly.
Of course they did!
After all, we were business geniuses. Right? Right!
However, when there wasn’t a hungry crowd, then sales came slowly, begrudgingly, and painfully.
And sometimes…they never came at all.
Ouch.
Maybe we’d better cut back on all that “business geniuses” talk.
The difference between success and failure came down to the demand for what we were offering.
I’m not the only one who believes a hungry crowd is paramount to the success of a new service. This article from Marc Andreessen describes how demand for a service/product – what he calls a market – is more important than the product and the team behind it.
Andreessen is a billionaire venture capitalist who has started several companies and has invested in many more.
So take it from me (or Marc Andreessen): It’s vitally important to operate where there is demand.
It makes life so much easier and ensures you are a profitable contractor.
Keep that in mind as we go through the following three strategies for how to get more work for your construction company.
The first strategy for how to get more work for your construction company is to figure out what additional services you can offer your customers and potential clients.
On every construction project, there may be several opportunities where you can pick up more work.
A great way to figure this out is to get your team together. Then, discuss what your target audience is saying, as well as what your team is seeing on the job sites.
Ask these questions:
Those last two questions are important.
The reason for this is that when you begin performing the service that occurs just before or just after your main business, the profits of your main business improve.
When my concrete construction company saw a demand for excavation services, we added an excavation division to our business.
Our customers were happy to have us perform that additional work. It reduced the number of contractors they had to manage.
The new excavation services provided revenue and profit to our overall company.
But there was an added benefit we hadn’t anticipated...
Since our excavation crews did their work right before our concrete crews, the excavation was performed to the specific requirements of our concrete crews.
As a result, our concrete crews were more efficient and benefited by having the excavation done just the way they wanted it.
Our concrete construction profits were higher after we added the excavation division.
The service we added that preceded our main business made our main business more profitable.
Our customers were happy, and our revenue and net profits increased.
That’s an example of adding a service that comes before the main work you perform.
Another good idea is to look at the service that comes right after the main work you perform.
You see, sometimes your crews can perform that additional service while they are already there doing their main work.
It's often easy to get more work with this strategy because your own construction company already has a strong network of customers. Those customers see it as a good fit because they already know you have a good reputation, skilled labor, and a great team.
This is a competitive edge for you.
And your customers will likely try your new services on their upcoming projects.
In addition, as a construction business owner, adding additional services is a way to diversify your own construction business.
And as we know, diversification leads to more stability. As a result, you are better prepared for changing market conditions.
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In some cases, the best service you can add does not come right before or after your main work. It happens well before or after.
One contractor friend of mine added lightweight concrete floor installation to their list of services.
This allowed them to diversify into apartments and high-rise condo projects – which was a completely different sector than they had been accustomed to.
They benefited from this diversification of sectors and clients. In addition, they were able to utilize the same crews and equipment they already had.
Plus, the new service provided names and contact information for companies that their main business hadn’t previously worked with. This allowed their main business to grow through those new contacts.
That new service filled a demand in their area. It served a hungry crowd.
When you are trying to determine how to get more work for your contracting company, use this strategy of adding additional services to your business.
The second strategy for how to get more work for your construction company is to figure out how you can solve the problems your customers have.
To do this, ask these questions:
The answers to these questions often reveal pain points your customers are having.
These may be areas you can move into.
Look for problems that your customers want solved.
What or whom do they complain about?
Does it take them a long time to get bids from their contractors?
If they often complain about the cost of something, then you may want to look into it.
If they constantly have to wait a long time to get a contractor onto the job site because that contractor is always busy, then that may be a new service you want to investigate.
Another good way to solve your customers’ problems is to ask them.
Meet with your customers at their office, on the job site, or take them to lunch. Then, ask this question:
"If there was another service you’d like us to provide, what would it be?"
That is a million-dollar question. The answer may cause you to add a service that leads to millions in revenue for your construction firm.
Occasionally, a new opportunity to add another service comes from a recent change in your local building codes.
I rarely talk favorably about building inspection departments (don’t get me started). But in this case, their propensity to create endless amounts of ridiculous new rules and codes could be used to your benefit (yes, I know, that sounds crazy just reading it aloud).
However, if the building department creates a new rule or code that leaves your customers scrambling to find a solution on the construction site, then you may be able to step in and fill that void by providing a new service.
That new code change may create a hungry crowd, including companies you’ve always wanted to work with.
This strategy of solving your customers’ problems can help you get more work for your construction company.
Everyone has problems they want to solve. Your task is to find out what those are for your customers.
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The third strategy for how to get more work for your construction company is to eliminate the services you offer that are in low demand.
“Wait, what?”
I know, I know…
Right about now you are saying, “Wait a minute, Doug. I’m here to learn how to get more work for my construction company. And you are telling me to get rid of services?”
Yep. You read that right. That’s what I’m saying.
Let me explain…
There may be services you offer that do not pull their own weight. They take too much effort and/or risk for the revenue and profit that they bring in.
These under-performing services take up time and resources that could be spent on a more profitable offering.
If you have a portion of your business that causes 80% of the headaches and problems but only contributes 20% of your revenue, then you should seriously consider cutting it loose.
If you get rid of it, you’ll reduce your problems and free yourself up to pursue a more profitable service.
I know this may be hard to read.
We get attached to the services we provide – even if they are a pain in the arse.
But you aren’t running a non-profit here.
You are running a business. A for-profit business.
And that requires an honest evaluation of every aspect of your company. If something is not producing a good return, it must go.
Sometimes, one or more parts of your business are not worth your time and energy.
For example, if you have been trying to sell metal roofing for houses in your market for the last two years and it just hasn’t taken off, then it could be because homeowners in your area are not hungry for metal roofs.
If you’ve effectively marketed it and given it time to flourish, but you still find it tough to sell, then it’s time to pull the plug on it.
Redirect that time, money, and energy into selling more of what you are already doing, or add a different service that appeals to your market.
That way, you’ll sell more of what your customers want, and you’ll be a much more profitable contractor.
in this fREE guide, Doug Herbert shares why submitting bids quickly has been the secret to his and other construction company's success.
Once you are sure there is a hungry crowd for the service you want to add, the next step is to determine how you’ll make it happen.
In other words, how will you perform the service?
Here are two questions to ask yourself:
Let’s look into those topics more closely.
For some services, you don’t really need anything special or unique to begin doing the work.
You don't need to set up a separate business entity, get a new phone number, create marketing materials, write a construction business plan to show to financial institutions for SBA loans, or even get business cards.
- Your existing salespeople can sell the new service.
- Your existing skilled employees can perform the work.
- Your existing office staff can manage the paperwork for the new service.
This is a low-risk, low-investment way to add a new service. For a small business, it is also the easiest to execute well.
Just be sure you know how to estimate the new service.[link to How to Bid Small Jobs]
However, sometimes you must buy something to enter the new business.
We’ll talk about that next…
Sometimes you cannot perform that new service with the equipment or crews that you currently have. You might have to finance extra working capital or attain additional business licenses.
After you've performed your due diligence on this new venture and created a solid business plan, you'll often find that you have to buy something to make it all work.
Often, the fastest way to begin providing the new service is to buy what you need.
This can mean different things to different contractors. It all depends on what size company you have, your current employees, and what service you want to add.
Here are a few examples of buying what you need:
A small excavation contractor decides they want to offer erosion control services.
They buy a trencher to install silt fence with their own crews.
A medium-sized drywall installation company determines there is a demand for reliable trim carpentry services in their market.
They buy a local trim carpentry company and install effective systems to improve the company[link to Systems blog], and meet the market demand.
A large electrical contractor in the Midwest sees an opportunity to purchase and unite several HVAC businesses throughout the region.
This allows them to offer HVAC services to additional regional divisions of their current general contractor clients.
These are all examples of finding a hungry crowd and buying what you need to provide a service to them.
A hard lesson I’ve learned over the years is that a new service doesn’t just run itself.
Depending on its size and complexity, your new service will require one or more of the right people to get it off the ground and to the point where it consistently produces profits.
Before you add a new service, make sure someone will be responsible for its success.
This careful planning will give you a better chance of succeeding.
Have a plan for who will be responsible for its sales, management, systems, and performing the actual work.
If nobody is responsible, or if they don’t have the time required to do the hard work to ensure it’s a success, then it will fail.
Unfortunately, if it fails, then it’ll cost you time and money.
But more importantly, your main business’ reputation will likely be negatively impacted if it fails.
You do not want that. The whole goal here is to increase work; not lose it.
On the other hand, when you get the right person to take that new service and run with it, it is awesome.
The right person won't treat it like a new job; they'll treat it like a separate business unit.
They’ll take ownership and it'll be their top priority. Also, they’ll treat it like their baby – seeing to it that it not only grows but flourishes.
When the right person runs that new service, you won’t have to spend a lot of your time ensuring its success. They’ll do that for you. That allows you to keep doing what it is you do best.
I’ve shared with you three strategies to get more construction jobs for your contracting business.
They have worked for my construction company, and for the contractor businesses that I help as a consultant.
The three strategies are:
Work on these strategies and you’ll be well on your way to getting more work, which will improve your cash flow and increase your profit margin. Then, you'll be a more Profitable Contractor.
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Hi, I'm Doug Herbert. I'm a 30+ year veteran of the construction industry and the active President of Herbert Construction Company in Atlanta, GA.
Contractors are often over-worked, stressed, and frustrated with their business.
I created Profitable Contractor to help good contractors make more money, find better employees, and delegate tasks so they can make it home in time for dinner.
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