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Expand your contracting business during a slow market

Aug. 6, 2014
Trying to predict, or beat, the curve is a fool’s errand. There are things you can do to streamline your business. There is always work to be had for the contractor who looks for it.  

While it may seem counter-intuitive to think about expanding your business in a slow market, when you look at most subcontractor business models it makes sense. It is easy to say, “It’s a tough market out there, I’ll just pull back and wait for it to improve.”  The problem with that type of thinking is it’s a negatively self-fulfilling prophecy.  At what point would you deem it alright to ramp up your business?  Do you hit the beginning of the upswing (if there is an upswing) or do you catch it in the middle? 

As I mentioned in last month’s column, trying to predict, or beat, the curve is a fool’s errand.  You and your business are subject to all the vagaries of the marketplace all the time, so why try to simply ‘ride it out’ by deliberately slowing yourself down?

There are things you can do to streamline your business; make yourself leaner and more efficient.  However, once you’ve done that, you will need to get aggressive in your approach not shrink back until things improve.  Instead of pulling back in a slow market, ramp-up your efforts. There is always work to be had for the contractor who looks for it.  In good times you can be selective (to a degree), in hard times it pays to be less so.

Doing things that you have never done before, such as cold calling prospective clients, architects, engineers and the like can bring good results.  If you can’t make a personal appearance at their offices, compose a letter of introduction along with your qualifications and mail it, along with your business card, to as many prospective contacts as you can find. 

Be professional! A sloppy or slap-dash letter will say more about you than anything else. At best you might get a job. At the very least you might make a friend or start a relationship that will bear fruit later on. Either way, you will get your company name out in front of people that may be able to do you some good, if not immediately, then ‘down the road.’

In a service context, why not send a card or letter to past customers offering special pricing on various services? You won’t be spending money on broad market advertising, but will be focusing on known customers for the cost of a card or postage stamp and envelope. 

Offering to do free inspections of their plumbing or HVAC systems is a well-known method of generating service and remodel work or, at least, making contact with your customer base and keeping your name in front of them.  If you aren’t super busy, and even if you are, doing this type of customer service will pay big in the future. If you and your service people are particularly personable (and knowledgeable), there is a good probability a free inspection will generate more work immediately.  Just don’t fall into the trap of ‘selling’ your customers

A service or product they don’t need. Honesty is always the best policy and your customers will hold you and your company in high regard if they perceive that you have been straightforward in your dealing with them. Conversely, selling a customer something they don’t need, or which is questionable in their mind, will always come back to bite you.

Keeping abreast of the status of projects in the geographic area in which you do business is a must. If you do work in a small town as opposed to a major metropolitan area, keeping track of projects is much easier. The downside of doing business in a small town is your competition is fewer, fiercer and more focused. In a large metropolitan market there may be more competitors, but there is also more work available and there are less ‘insider’ issues to deal with (or at least they are not as intense).

Consider, also, using the Internet and social media to broaden your reach. If you aren’t versed in those areas, learn. If you can’t, or won’t, learn then hire or subcontract someone who can get you ‘on line.’ The Internet is not a fad.  It is here to stay, and has become a critical tool for doing business in the 21st century. 

Keeping a positive attitude is, arguably, more important than anything else. The contracting/subcontracting business is a rough one, not for the faint of heart. If you are in business today, you are to be congratulated for just staying solvent, but you can’t stand still or you will get run over. Make a plan. It doesn’t have to be an elaborate plan, but you need a plan of action that makes sense for you and your company.  

There is a saying in the military, “Every battle has a plan…and the first casualty in battle is the plan.” Never be so invested in a course of action that you can’t change it. Being stubborn is sometimes a good thing, but being blindly tied to a course of action that isn’t working is not.

The Brooklyn, N.Y.-born author is a retired third generation master plumber. He founded Sunflower Plumbing & Heating in Shirley, N.Y., in 1975 and A Professional Commercial Plumbing Inc. in Phoenix in 1980. He holds residential, commercial, industrial and solar plumbing licenses and is certified in welding, clean rooms, polypropylene gas fusion and medical gas piping. He can be reached at [email protected].

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