When you first start your contracting business, you might be going it alone. Yet, it’s often impossible for people to do all the work to keep a business running on their own. You’ll need a team, and sometimes it’s hard to decide which jobs can be filled by you and which ones require support. Here’s the basic components of the team you’ll want to have for your contracting business.
Marketing and Sales
To a certain extent, it’s true that you can build a business based on word of mouth. In other words, pick up a few happy clients and they’ll let other people know to hire you for their own projects. However, construction can be a competitive industry, with lots of small businesses you’ve got to compete with to get a client’s contract. This is where brand management comes in. Knowing how to find your target demographic and the best ways to secure their business takes experience that you might not have. A sales and marketing manager can handle leads, but also advertise your services in the right places.
Cash Flow Management
Every business needs a person who can collect payments, handle the bills and maintain the budgets. When you first start your business, this person will often be you. However, in order to make that work, you’ve got to be reasonably good with numbers. This is an administrative task that will bring your business crashing to a halt if you forget to take care of it, though. If you’re too busy completing projects to make this a priority, you’ll need an administrative support person to keep track of the general cash flow of the business.
Accounting and Payroll
Although handling the finances for the business seems like it could easily be done by one person, this usually isn’t true. There’s a reason many businesses outsource their tax accounting and payroll work to a service or accountant. If you get it wrong, you may be held legally liable for mistakes. There are lots of rules you have to follow to pay your employees and take care of your taxes each year, and they can be tricky to understand or remember. Paying a service to handle it for you ensures that everyone gets paid on time, including you and the IRS.
Contracting businesses that serve homeowners for relatively minor tasks may be able to get by with just one person doing the work. However, it’s worth considering a second person, if you have enough work available and you can pay them reliably. When all the work depends on you, you’re on the hook to get the job done around the clock and in any kind of condition. Failure to meet the terms of the project can make it harder for you to secure clients in the future. Adding a skilled worker who can duplicate most of the work you do can improve your efficiency and provide a cushion for when you need to focus on administrative tasks.
Although subcontractors aren’t technically a part of your business, many of the projects you do wouldn’t succeed without them. You’ll hire subcontractors to do the jobs that require skills you don’t have, or to fill roles that you cannot do simultaneously. There are rules for the way the state allows you to classify contractors compared to employees, so you want to make sure you’re doing it correctly. A reliable subcontractor who does good work is worth their weight in gold. They make it easy to take on more-complicated projects, without you having to provide regular work for them.
Being an independent contractor feels like a business of one, but it often takes a team to make it a success. Understanding the different roles your business needs will help you build a fulfilling career. To get started, visit CSLS today!