It can be tough for subcontractors or even GCs who aren’t solidly established to get hired, especially without driving your bids so low you don’t make a profit. This becomes even more challenging when subcontracting franchises are available with major brand recognition and the mass sales that allow them to offer discounted rates.
There are a few steps that up and coming contractors can take to ensure you aren’t low-balling yourself and driving your business in the ground before it’s had a chance to take off and soar.
1. Investigate your competition.
Try to find out what your competitors are charging. Get your hands on bids, invoices, estimates, anything you can track down from your competition. You can try inquiring with the people at the relevant industrial supply stores what your competitors are charging, research online or even have a “plant” call in for a rough estimate.
2. Be extra-responsive to leads.
Remember that when you’re going up against an established competitor—especially a franchise—that competitor is likely able to offer a turnkey solution to meet customers’ needs, and is also readily available for answering questions, delivering quotes and booking jobs. If you haven’t already, it might be time to “professional-ize” your business with an admin who is knowledgeable enough to take calls and at least answer basic questions—and can get new customers scheduled promptly.
3. Don’t undersell yourself and the cost of doing business.
It’s a common mistake as a green contractor with a payroll of licensed, certified employees to charge too little. Putting a premium on top of the costs of doing business may seem exploitative at first, but it needs to be done.
Study up on business basics if it helps you make the leap toward asking for more. That said, price is often a factor for customers. The key is striking the right balance between what honors your work, time and talent and what will be an affordable, appealing price point for a newer player.
If you don’t have time to take a Business 101 course or even read a book, you can find some thoughtful calculators and formulas online for pricing construction jobs.
4. Track, track, track everything.
Amass as much data about your process and business as you can—and then you can make data-based decisions about what to charge. Keep track of every data point, estimated and actual hours to total job price, material cost, labor cost, profit, loss, percentage of sales over bids made, how long it actually took to do X or Y task, and anything else you can think of. At least you will be informed about what things actually cost, regardless of what you want to aim for in terms of gross profit margin. And being armed with that knowledge will allow you to make your decision with integrity, knowing that—profit aside—the work that you do is costing you time and money, and is hopefully work you take pride in, and therefore has real value.
5. Market yourself.
This isn’t hard to do. If you’re on a shoestring budget, it could cost you very little: Your sign in the front yard of a house or building you worked on, or maybe even a place in the community where you volunteered some services, such as a school or church. Some signs stapled to electric poles in a neighborhood where you would like to do business, or some business cards distributed there. If you want to get the word out where more people are—online—it may cost a little more, but you should see a return on that. And you can adjust your strategies based on the return you get from different channels, whether it’s Google Ads, Facebook, 1-800-contractor or others.
ExakTime offers an easy-to-use solution for tracking your workforce that provides you with a wealth of data, from labor hours on a project to job costs to overtime status across your workforce. Sign up for a free demo today.
