7 Tips for Struggling Contractors

Growing your business or re-growing your business in the year 2021 is already proving to be tough. With the pandemic still affecting our day-to-day lives, as business owners, it is important to be cautious when making decisions that will determine the fate of your company. As a leading surety agency and small business ourselves, we know the value of quality advice. The Surety Place specializes in working with contractors who need help increasing revenue. From partnering with the SBA helping small businesses get approved for bonds that will help them grow their business, to creating specialized programs for contractors suffering from poor credit, we are the team to call when it comes to growing your construction business. Listed below are 7 tips for struggling contractors when trying to grow your business.

1. Knowing When and Where to Invest

The saying, “You have to spend money to make money,” is often more true than not when it comes to growing your business. The key to investing in your business is knowing when and where to invest. As a contractor looking for financial growth, investing in the right equipment is one great place to start. Purchasing the right vehicles and equipment that help with efficiency during your projects is important. Also, investing in the right training for your employees is crucial to the success of your business. At The Surety Place, we believe that when your employees are given the right tools and training to succeed, they will, which in return will help with the overall success of your business. Marketing is also an important place to invest your money when it comes to growing your business. Hiring a marketing specialist or team will help with your overall branding and getting your name out in front of the right audience. Allocating your funds to the right places when investing in your business is one key to success when looking for growth.

2. Underbidding in Order to get the Job

One of the biggest mistakes contractors make is underbidding on projects. Construction projects have so many different facets that go into the entire process from start to finish. It is important to calculate all expenses when bidding for a job. Some of these expenses include:

• Employee Salaries
• Supplies and Materials
• Vehicles and Equipment
• Insurance and Bonds
• Subcontractors

Making sure you properly calculate how much the potential job will cost is crucial in the bidding game. While you want to offer the best bid, you have to make sure your company will actually profit from the project. Underbidding could cost your company more than what will actually be paid out to you in the end which would be detrimental to your financial growth. In these competitive markets, we suggest talking to a professional at The Surety Place – as we specialize in helping contractors increase revenue.

3. Hiring, Firing, and Everything In-between

Your employees are such a significant part of your day-to-day business that it is crucial to hire the right people and know when it is time to let someone go when they are not adding value to your business. When it comes to hiring, firing, and everything in-between we often see these issues arise in the construction industry:

• Rushing to Hire – When contractors are understaffed and win a project with an expedited start date, they are often in a hurry to hire employees to ensure that there are enough people at the job site each day. This can cause the company to have poor hires, people who may not be trained as well or who do not fit with the company culture. It is important to have enough time to vet each potential employee. Bad hires can be bad for business and cause issues on site. Contractors must be prepared and well-staffed with the right employees for each and every project they may win.
• Slow to Fire – We get it, letting people go is never an easy task which is why we often see companies flooded with employees that don’t actually add value to the day-to-day business. Firing people is like ripping a bandaid off, the faster you do it the easier it will be. In the long run, the quicker you realize that someone isn’t the right fit, the better it will be for many reasons, including bettering company culture and saving money with the ability to use that money to hire the right person for your business.
• Finding the Right Fit – Sometimes you make a hire because you see great potential in someone and you know that they will fit well with your company values, mission, and culture, but maybe over time you realize that their current role isn’t best suited for them. It is important to keep valuable team players on your company roster, just make sure they hold the right position that adds value to them and your company.
• Lack of Proper Training – When it comes to hiring employees, it is important to offer different training opportunities to allow your new and veteran employees the chance to learn new or improve specific skills designed for their position. Setting your team up for success with proper training will create a more equipped work environment for everyone.

4. Keep Insurance and Bonds Up-to-date

Whether your company is growing or you are experiencing some growth struggles it is important to discuss your insurance and bond coverage with your agents. Construction is a litigious industry and it is important to know your coverage and be prepared for anything. When your company is experiencing any kind of struggles or expedited growth, oftentimes contractors are distracted with other things and put insurance and surety bonds on the back burner. Having the correct insurance and surety bonds to protect yourself from claims is crucial for any growing construction company. Talk to a professional at The Surety Place if you have questions about what kind of coverage you need to help grow your construction company.

5. Bid on the Right Jobs for your Business

When you are trying to grow your construction company, it is important to bid on the right projects, projects that will help you grow. Some contractors look to make a quick buck, taking any job that comes their way, but oftentimes this is not the best way to grow your business. Bidding on projects that are feasible for your company, that still gives you a chance to grow is most important. It is okay to be slightly picky with the jobs you bid on. Bidding on jobs that will increase revenue while also enhancing your portfolio for future projects is key. Contractors can get greedy, which is often their demise. Be the contractor that bids on the right projects that help market your company for future projects.

6. Focus on Accounting

When your business is struggling, it is important to focus on your accounting and know exactly what money is coming in and going out. When you take the time to balance your books and understand where unnecessary spending occurs, you can save the company an extraordinary amount each month. This will also give you time to evaluate your current employee roster to see if lay-offs need to occur during your slow season. Once you understand your monthly and annual expenditures you can decide where to better allocate your funds.

7. Be Process-Centric

Contractors who are struggling with growth need to rethink the way they run their business. Being process-centric is crucial when it comes to growth. Each position and task should have a clear process that is outlined for everyone. When the company is in unison with how things run, your company is bound to be more efficient. This also makes it easier when hiring and training as the expectations for each employee will be equal. Every person in the company will have the same opportunity to be successful in their role. Companies that are process-centric are more likely to succeed because the standards are set and each employee understands the expectations set before them and there are guidelines to follow with a specific process for everything.

7 Tips for Struggling Contractors

If you have found that the last year did not treat you well and your construction company is struggling to grow, consider these 7 tips. The Surety Place is a leading source for contractors looking to increase revenue. We have decades of combined experience working with contractors in the construction industry and we know what works and what doesn’t when it comes to wanting to scale your business. We know that a lot of contractors have a lot of making up to do when it comes to growth as 2020 proved to be difficult for a large portion of the industry and we are here to help. Talk to your surety agency and learn what special programs have been established to help you win bids on bigger projects that will help you increase revenue and expand your business.