I often hear contractors claiming they can’t find good workers and so it doesn’t make any sense to even look at growing the business. There’s just no way they can handle any more work without expanding the crews, and since there seems to be a lack of help available, there’s just nothing that can be done.
Sound familiar? If this is a problem you feel you’re facing, it may warrant a look a bit closer at the state of your business to make sure that really is the case. You see, as I’ve spoken to many of these contractors it becomes clear that they haven’t implemented some of the fundamental building blocks for establishing a solid business that’s ready to grow.
Are you Charging Enough?
This is one of the things most contractors fail to realize. If you’re booked solid, there’s a really good chance you’re not charging enough for your services. This is more likely to be true if you find you have an abnormally high closing rate. If you’re winning most of your bids and never hearing any objections about the price, then this becomes an almost absolute certainty. If you’ve never raised your prices, not even once, or feel that one of your competitive strengths is that you’re cheaper than the other guys… well, then… that’s why you’re booked solid.
Obviously, when you start your business you want to make sure you fill your schedule with paying work as quickly as possible. Who wants to run through their cash reserves when there’s money on the table? But, once you establish some cash flow and start to build your reputation as a reliable contractor, you should immediately begin moving away from that strategy.
It really is a balancing act, though, trying to find the pricing that your market will accept. As your reputation grows, your personal demand will increase, and you’ll be able to charge more simply because you’re well known and established. But even before that happens, there’s a good chance your margins could stand to be fattened by at least a few percentage points.
You’ll need to ease into this strategy. If you’ve been finding a high level of success with your current pricing, then add only a small additional profit margin to each invoice and see the response. Still closing a ton of deals? Then do it again. Once you find your closing ratio to become undesirable, you know you’ve probably gone to the highest level the market will bear, and it’s time to reduce your rates a bit.
Are You Doing the Work You Love?
I’m regularly told that the books are full with a certain type of work, but what I’d really love to get more of is… something else entirely. Some contractors are able to get a lot of small projects yet would prefer a few large projects. Some contractors can get a ton of roofing work, but really would love to get into remodeling. Does this sound familiar at all?
If so, hiring more staff to manage that existing workload may not be the right move, either. Instead, consider shifting a portion your marketing and advertising efforts into bringing on that type of work. If you don’t, you’ll just continue to build a solid reputation in a line of work you’re not very interested in. Once you start landing a few of your passion projects, you can then consider hiring help for the original line of work that helped bring your business to where it’s at today.
Think about it – before taking on all of the overhead and responsibilities that come along with hiring someone you’ll want to be sure you’re able to start taking on the types of projects you really love. In the meantime, you’ve already established a surefire thing with work that brings in some cash flow.
When the time comes to hire that new employee you’ll already have a good grasp on how to get both types of work. And, if you followed my advice above, you’ll already have worked out the best possible profit margins your reputation demands, so it should be smooth sailing.
So, it’s time to hire, is it?
So let’s say we get to the point where it’s time to hire if you want to grow your business. You really need to ask yourself one more question before going down that path: Do I want to run a business or swing a hammer?
This question might come as a bit of a shock, seeing as you’ve already been running a business and swinging a hammer at the same time.
Think about how much time and effort it takes for you to manage your business as it is, right now, without these additional employees? How much additional time and effort is it going to take to train new staff, manage them, and ensure you still maintain that high quality reputation you’ve worked so hard to build?
Again, if you’ve already focused on maximizing your profit margins, you should be able to tackle this challenge with relative ease – just take on one or two fewer projects while providing on the job training. Once your employee proves capable of working on his or her own, you can ramp things back up and start providing some additional, unsupervised responsibilities.
Once you get the hang of on-boarding new employees it will start to become a regular part of your business operations. But the early goings are going to be rough.
All of this still leaves us with the original gripe: it’s hard to find good employees.
Your best bet is not Craigslist, the news paper, or your friends and family. The best place is a hiring website like indeed.com or other similar services. The reason this platform is far superior to the other options is simple: you have an account manager who is there to help you succeed.
I’ve never worked for Indeed, but I’ve had plenty of contractors tell me it’s an absolute lifesaver when it comes to finding quality employees. You can tell your account manager what kind of employees you want, and they will help you devise an approach that will eliminate most of the time wasters.
Again, I’ve never worked for Indeed nor do I currently, so I can’t advise on the specifics, but I do encourage you to reach out to them and find out how they can help you.
If you’ve worked with them before please get in touch, I’d love to speak with you and learn more about your experiences.