Are You Shortchanging Your Contracting Business? 5 Ways You Can Tell

When you start a contracting business, it’s not always clear how you should run it to make it successful. There’s a high likelihood that you’ll make a few mistakes, especially as you gain experience. Some mistakes are worse than others, because they make it hard for your business to survive from month to month. With these tips, you’ll know the most common problems to avoid.

You Bid Too Low
One of the worst things that you can do as a contracting business owner is to cut deep into your profit margins. And yet, that is exactly what plenty of contractors do on a regular basis. When money is a little tight and you have a lot of competition, it’s easy to drop your bid in order to secure more work. But the less you earn, more work you have to do in order to keep going. And over time, clients who are accustomed to choosing the lowest bid will be less likely to pay higher prices. You should attempt to stay competitive, but don’t forget what you’re worth.

You Don’t Attract Employees
When you work for yourself, you might find that you develop a kind of tunnel vision about the running of your company. After all, you probably became a licensed contractor so that you could make your own decisions. But eventually, you’ll need to work with other people:

  • Employees
  • Subcontractors
  • Suppliers
  • Other contractors

You can make this a lot easier by setting up a business that you can be proud of. Think about what you would like to see if you were evaluating a subcontractor or a business you’d like to work for. Having processes in place, like business management or safety, make it easier for you to present as an ideally-functioning business.

You Can’t Manage Price Shifts
Shifts in prices for supplies and services are common. They’ve been particularly volatile over the last couple of years. The last thing that clients want is a contractor who isn’t prepared for this eventuality, and has to change prices or back out of the project halfway through. Most experienced businesses establish margins for fluctuating prices, so that they can meet the terms of the contract without having to work for free. It may take you time to figure out the best way to do it, but it’s well worth the effort.

You Don’t Learn New Technology
The construction field has been around for thousands of years, but we don’t build things in exactly the same way we did back then. In fact, building technology and best practices have changed significantly over the last 20 years. If you’re unwilling to adapt, you’re going to make it more difficult for your business to thrive. When you see new technology in your field, you can either embrace it or run from it. Learning more about the developments that relate to your specialty can help you stay current and discover new things that you can incorporate into your business. You might even figure out ways to complete a task more easily or efficiently.

You’re Not Investing in Your Business’s Future
When you are swamped with work or even desperately looking for work, it’s a lot harder to think about the future of your business. But in a year, you’ll be in the future for your business. It doesn’t take long for you to realize that you should have made an investment to make your business run better as you get more established. Making an investment doesn’t necessarily have to involve lots of money. You can invest into your company by learning new skills, improving your business management, or finding employees who can help make your business everything that it could be.

There are lots of ways that you can shortchange your contracting business, but you can learn to avoid them. To find out what you need to run a contracting business, contact CSLS today!

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Contractors State License Service (CSLS) is the largest school in California devoted to the Construction professional. For over 23 years, CSLS has helped its students pass the exam to become licensed contractors in the State of California, licensing more students than any other school. From our main offices in Southern California, CSLS operates over 25 locations with full-service support and classrooms. We have grown to this extent by providing quality, professional services. In comparison, this provides 7 times the number of convenient locations than the second largest contractor school. Contractors State License Services is one of the only contractor schools in the state that is run by educators, not lawyers or people mostly interested in the bonding and insurance business. Contractors State License Services formerly operated under the oversight of the State of California's Bureau for Private Post Secondary and Vocational Education. As of January 1 2010, the new Bureau for Private Postsecondary Education (BPPE) came into existence replacing the BPPVE. CSLS now operates under the provisions of the California Private Postsecondary Education Act of 2009 (CPPEA), Article 4 Section 94874(f). Our Mission is simple; We can help you pass your California Contractors License Exam. Celebrating our 25th year, CSLS has helped over 120,000 students pass the California contractor licensing exam to become licensed contractors in the State of California. Additionally, we offer complete home study and online contractor’s license programs to help you pass your California contractors license exam. CSLS offers licensing classes for all types of contractor licenses, including General Engineering Contractor, General Building Contractor, Specialty Contractor, Insulation and Acoustical Contractor, Framing and Rough Carpentry Contractor, Cabinet, Millwork and Finish Carpentry Contractor, Concrete Contractor, Drywall Contractor, Electrical Contractor, Elevator Contractor, Landscaping Contractor, Warm-Air Heating, Ventilating and Air-Conditioning Contractor, and many others. For a complete list of contractor licenses, visit www.MakeMeAContractor.com and tuned for more informative posts.