Does your company make enough money? Are you happy with your profit margin? If so, there's no need to continue reading this blog entry. However, if you wouldn't mind having extra cash for your company, there are ways to increase profits. To do so, you will need to rethink how you view your business strategy. Here are five ways you can make more money with your construction business.
Your Portfolio
As the owner, you need to be able to embrace change. This will require some nerve. It's easy to get used to doing certain types of jobs one way, every day. But if you want to increase your ability to land more lucrative contracts, you should work on your construction portfolio. If you only do trenching work but have the machines capable of doing demolition, consider taking on a few of those projects, especially if certain jobs have fewer competitors.
Pricing
Review your pricing and how you expect clients to pay for work. Consider different types of payment options. Providing customers with a wide range of payment methods might be the extra jolt your business needs. Avoid bidding on projects with a lot of competition. Although the previous tip encourages you to expand your portfolio, stay focused on bidding on contracts for work that is perfect for your expertise.
Quality of Work
As you already know, there are times when you need to hire subcontractors. In doing so, construction companies often hire our the cheapest labor. This could put your quality of work at risk. A better strategy would be to form relationships with subcontractors or suppliers who will do great work in a timely manner. Yes, you will pass the cost on to your customer, however, it's easy to explain to them the extra cost results in getting the job done right the first time. They will appreciate your approach, feel more comfortable using your service and will usually help build a lasting relationship.
Charge
As a project rolls along, customers will often ask for extra work to be done. It's easy to simply do the work without requiring a fee. Although you may feel as if your kindness is an investment of sorts with hopes the client will think of your services in the future, the reality is, they are just happy to have gotten something for nothing. To prevent situations like this, be sure to set expectation on what you will be doing and at what cost. Be sure they understand any work requested beyond what you were contracted can be done for a specific fee.
Repeat Business
Always market your company. Never finish a job without making sure your clients know you are ready, willing, and able to do anything for them in the future. Encourage your customer to refer business to you, and even offer incentives if they hire you again or bring business to your door. This practice, over the course of time, will result in more business you can handle with little or no need to put contract bids in for certain jobs.
