Did you know that 25% of construction companies don’t survive their first year of business?
Owning a contracting business is exciting and fulfilling. It allows you to be your boss, set your hours, and earn as much or as little as you want.
However, there are also plenty of pitfalls that can end up costing you money and time. And many times, those pitfalls could be the failure of your business.
If you’re thinking about launching your own contracting business, here are some mistakes you should avoid.
Not Having a Plan
The first step to avoiding the pitfalls of owning a construction business is having a plan in place before you take on any clients or contracts.
If you don’t know what services your company will provide, how much time it will take to complete each project, and how much it will cost, then how can you possibly succeed? You need to create a business plan that lays out your goals and the steps you will take to achieve them.
Determine How Much Time You Want to Put Into Your Business
If you don’t have any employees or subcontractors working under you, then this doesn’t matter.
However, if you have employees or subcontractors working under you, then they need someone who is going to take an active role in managing them. They’ll also expect you to be there when they need help with something or have questions about their work schedule or paychecks.
Not Pricing Yourself Correctly
Many general contractors price their services too low to attract clients, only to find out later that they aren’t making enough money to sustain their business. They end up working long hours for little pay because they don’t know how to price themselves correctly from the start.
The best way to avoid this problem is to do your research and get a clear picture of what other contractors in your area are charging. You can also go online and find websites that list average contractor prices for various jobs, so you’ll know what people are paying for similar work around town.
Not Tracking Expenses and Income Properly
If you don’t know how much you’re making, or if you don’t know how much money you have coming in and out each month, it’s hard to tell whether your business is succeeding.
The best way to handle this issue is by setting up a system that tracks all of your income and expenses. This can be as simple as using a spreadsheet on your computer or writing everything down in a notebook.
Click here to learn how to manage construction liens in your business.
Contracting Business: Avoid These Common Mistakes
When you’re starting your contracting business, it’s important to learn from other people’s experiences. It will help you avoid a lot of unnecessary pain and heartache and allow you to focus on doing what you do best, running your business.
Don’t forget to browse our site for advice on business, technology, finance, and more.
