It’s home building season, and that’s great news for contractors. Landscapers, roofers, pool maintenance, plumbers, electricians, HVAC technicians – it’s your time to shine!
Peak season brings in a steady cash flow, but is your business really as profitable as it can be? There may be certain aspects to your business model that warrant review, and we’re here to provide you with some ideas and inspiration to kick your business into the next gear.
What’s Your Niche?
You have a choice when it comes to how you run your contracting business. Do you want to provide a widespread range of services, or hone down to one or two and provide specialized services with expertise?
There’s value in both approaches but developing a niche should be heavily considered if you’re serious about increasing the profitability of your business.
“Jack of all trades, master of none” is a phrase that really highlights the value of focusing on a niche. Your clients are making an investment in their home, and they’re looking for a reliable and high-quality service. Why would they choose a catch-all contractor over one who displays specialization and expertise in the service they’re seeking?
When you develop a niche, you can pour all of your energy and resources into a specific aspect of your business, which will help your efforts to go further. Marketing becomes more specialized and effective, and you establish yourself as an authority within the niche. Identifying and dominating a particular niche in your industry may be just what you need to propel your business forward.
It’s simple: in order to run a profitable business, you need to have profitable clients.
Just about every business owner has a story or two about a client that ate up so much time and effort that at the end of the day, they wish they never took on the project in the first place. Sound familiar?
It takes practice to learn from the get-go which clients will be profitable versus which are better off left for another company. You can begin by analyzing your past business relationships and looking for trends within those experiences that may help you to better determine the signs of a profitable client versus a client that may be more trouble than they’re worth.
Consider implementing a customer profitability analysis process to streamline this process moving forward and to continue gathering data that can help to inform your choices moving forward.
As with anything financial, this is also an area where it’s probably a good idea to check in with your bookkeeper to gain an in-depth understanding of your business’ financials, general profitability, and cash flow trends.
Prioritize a Winning Team
Your employees can make or break your business.
Of course, in order to be profitable, you need to have top talent on your team. That requires two things: attracting qualified candidates and retaining them once they’re on board.
Those qualified candidates are looking for certain perks when they set out to find a new position. Schedule flexibility, career growth opportunities, and company culture are all effective ways to attract top talent that don’t rely on compensation (but offering competitive compensation helps, too!).
Once they’re on your team, it’s important that you treat your employees as the people they are rather than just business assets. Feeling comfortable and appreciated contributes greatly to an employee’s workplace satisfaction, and focusing on those elements will help you to maintain a strong team for a long time to come.
Invest in Yourself
We’ve all heard the old adage: it takes money to make money. Well, there’s certainly some truth to that. If you’ve been experiencing a plateau in your business, making a wise investment may be just what you need.
Perhaps you need to invest in new equipment that will save your team time and effort, or maybe your funds would be better spent on fresh marketing campaigns. It’s important to ask yourself if there are any areas that are dragging you down or holding you back, and then determine the best ways to break through those obstacles.
If you’re struggling with a lack of time or with a less-than-clear grasp on your financials, you might consider outsourcing your bookkeeping needs. DIY bookkeeping very likely isn’t doing you any favours, and investing in professional bookkeeping services that are specialized for your industry can have a remarkable impact on not only your day-to-day success, but the continued success of your business in the long term.
Here’s the good news: AIS Solutions is a professional accounting, bookkeeping, and tax planning solution with services dedicated to home services businesses. We help contractors like plumbers, electricians, HVAC technicians, and landscapers to maintain their books and get their financials on track so that they can focus on what they do best and increase their profitability. Contact us today!