Contracting is a rather unique kind of business model. It covers everything from getting involved in construction projects to fixing electrics to painting homes. The defining features are that they tend to be nomadic and that, of course, they’re based on contracts, not a steady stream of sales. So, being cost effective as a contractor is very important. You need to know not only how to capitalize in the times of greatest success but stay safe through the lean times of the year.
Qualify your leads
It all starts with choosing the projects you’re going to take on to begin with. Creating those leads is challenging enough, but you need to get cost-effective with leads, too. This means taking the time to qualify them. For one, that means finding out how likely you are to get the contract by researching what they need and, if you can, who else is bidding. You don’t want to waste time and money going for leads that you’re not going to close. But you also want the details on those leads so you can do estimates and see how profitable a job is. Unless it’s the beginning of a longer relationship, you should never take jobs that aren’t showing you a significant chance for profit.
Anticipate equipment failure
Most contractors use machine equipment of some kind. This might be in heavy construction equipment, electrical tools and the like but is just as important when it comes to the vehicle of the business. It is your access to work, so you need it to be running as well as possible. Besides strict downtime maintenance, however, you need to anticipate failure. This means using reactive services that can get you replacements and repairs within hours. You need to know who can get you the right individual pieces, from a company hose to bearings and gasket parts. It also means being aware of where your machines are most likely to fail. The right research on every piece of machinery and knowing the quickest way to get it back on its feet will severely reduce the amount of downtime you suffer due to equipment failure.
Partner up locally
Besides having effective, efficient equipment practices, if you use supplies of any kind, it’s a good idea to look at local partners. For one, they’re close, which means you’re saving on extensive delivery charges and you can access them much easier than bigger partners that are further away. Many products are produced to a high-quality locally, so you don’t have to assume that the bigger suppliers are always better. Besides, while bigger suppliers hold a certain veneer of prestige, your clients might have some affinity for local businesses too and appreciate that you support them in your work. The fact is that local businesses also appreciate a reliable long-term relationship more than bigger businesses which don’t consider you as valuable a lead. That can give you more influence in the deals you make.
Of course, the tips about must be adjusted to seasonal peaks and dips. You have to anticipate demand as well as dearth, making sure that you have the supplies when you need them and that you’re not wasting money on them when you don’t.