Finishing the BuilderScrap series on helping small business contractors,  today we’re discussing marketing.

One reason it’s so hard for some contractors to say no is that they have no plan for generating business except to take whatever comes along. In other words, they don’t market their services. For companies that started in the 00′s, marketing may be a completely foreign concept. After all, the phones started ringing at the end of the 1991 recession, and, in most parts of the country, they only stopped ringing six months ago. Unless you actively do something to keep customers interested they will stop. Don’t take your reputation for granted. Even satisfied customers will forget about the wonderful job you did for them if you don’t keep in touch with them two or three times each year. It doesn’t take much — free maintenance check-ups in the spring and Autum, a card at the holidays, a phone call after a big storm to ask about damage — but you have to make the effort.  Some business happens by itself, but it’s not always the right kind of business.

If you know what kind of work is most profitable for you, market to prospects who are most likely to hire you to do it. Begin with past clients, then ask for referrals. It won’t hurt to spend a little money on a brochure and postage for a mailing, or a spot at the local home show, or sponsorship of a football team. Spending 2% to 3% of total revenues on marketing will pay for itself many times over in new and repeat business.

Sage advice yet again!

The fourth post in our series on helping small business contractors, BuilderScrap makes a very quick but important point!

We understand that it’s almost impossible it today’s economic climate to turn down a contract. But sound accounting and estimating practices won’t save you if you’re taking on jobs that you shouldn’t be doing. Early on, it may make sense to take every job that comes along. But don’t be fooled into thinking that all projects are equally profitable and all customers worth working for. Nobody is good at everything. By comparing profit figures for different types of jobs — and then comparing job size — you’ll begin to see a pattern. Focus on the types of work and the project size that nets you the most profit. Remember, bigger isn’t always better — it’s the percentage you put in your pocket when it’s over that counts.

Focus on what you do well, encompass all the other aspects detailed in this series. Balance these factors to help with the decision making process.

Good Luck

More from BuilderScrap helping the Small Business Contractor.  We’ve brought you a series on the pitfalls and benchmarks for starting your own business and how to make sure it’s profitable.  This week we are going to talk about poor cost accounting

Got the markup thing down cold? You may still be losing money because your estimates are out of date. The culprit is poor job-cost accounting — or maybe none at all. If you never compare an estimate with the actual cost to build the job, then you’re flying blind and probably making the same pricing mistakes over and over. Once again, labour is the biggest problem area, particularly for company owners who no longer bang nails. The longer they’ve been out of the field, the more they underestimate how long a project will take to build. But even production managers and lead carpenters who are on site all day often omit or underestimate down time — for example, time spent loading, unloading, and moving materials and equipment, or time spent assembling and disassembling staging. They may also underestimate time they themselves spend supervising subs. And almost every estimator forgets the golden rule: Work expands to fill available time. The crew that you estimated would need six hours to complete a task are going to be paid for a full eight-hour day, no matter what.  The solution is to require employees to fill out a time sheet every day, noting not only the number of hours they spend on each job, but also what they were doing. Then, when the job is done, compare labour hours and material invoices to your estimate. If there are big discrepancies, find out why before you make the same mistake in the next estimate. Be sure to check who actually performed the work. Sometimes the actual cost is out of whack with the estimate because a more expensive employee did the work. Keep in mind also that when you’re estimating, it’s easy to forget that delays create down time and that not all material orders are complete, undamaged, and 100% correct.

Salient advice.  Although you can serious cut costs by checking the free materials available on the http://builderscrap.com website.