Nearly every company out there, particularly in the small business realm, will go through certain "down" periods in terms of overall demand for their products and services. The contracting world is no exception, and those who own a contracting business should be prepared for periodic dry spells -- including some approaches at the ready for helping kickstart business and return demand closer to normal.
At Contractors School, we're proud to offer a variety of services for would-be contractors, including Utah contractor license courses and more, and assist our clients who already own an existing contracting business. We help contracting business owners with everything from business entity and licensure themes to managing your license qualifier. We are also happy to provide expertise and experience in numerous other areas you may have questions about. What are some common reasons for down periods in the contracting world, and what can you do to help renew your company's demand? Here's a basic primer.
There are a few reasons your contracting business might be experiencing a temporary drop in overall job demand, including:
Our following sections will go over strategies to help boost your business back to its prior levels (or even higher) if you're dealing with one of these dry periods for any of these reasons or even for causes we didn't mention.
Tightening your financial belt is one ideal way to weather the storm of a dry business spell, and one way to do this is to be very careful about managing your expenses. Make sure that you're not overspending on supplies and other materials, as well as any equipment or tools you may need to perform the services for which you're contracted.
Look to lower your overhead costs if necessary -- consider dropping excess workers' compensation insurance if you have plenty of work yet few employees, for instance. Do the same with your credit cards -- if you're not utilizing them, consider canceling paid services like subscription or membership sites that you may be using as a contractor (but wouldn't necessarily need as much as before), and don't forget to cancel credit cards if there's no work available to justify keeping them active.
As long as you're properly licensed and trained to do so, you might also consider offering a greater variety of services during periods of slow demand. This could be as simple as expanding the type of work you do for your regular clients, or it might mean looking to other markets or industries in order to provide needed goods and services.
For instance, if you're used to working with commercial properties, try offering snow removal services to homeowners when no contracts are available for your commercial customers. This is just one simple example -- you can apply your specific expertise to it however necessary.
One additional possible solution here, and one that showcases the value of having strong relationships within the contracting world, involves offering your services to other contractors on a subcontractor basis. This is a common practice in the contracting industry, particularly for those who work primarily on larger-scale projects involving teams of specialized workers.
Look into this as an option if your business is going through a slow period, but other contractors nearby have available contracts. If you can pitch yourself as a means for them to have more workers on their team, you may be able to secure a subcontractor agreement.
This final tip is targeted more at helping you avoid slow business periods altogether, rather than helping you recover from them -- but the benefits are similar. During periods of strong business, you'll be tempted to expand; this is often a great pursuit, but it should be carried out gradually and carefully.
If you try to bite off more than you can chew, so to speak, you'll likely find yourself overwhelmed with the number of contracts you have available, as well as workers to manage. If this is the case, you may be forced to turn down potential contracts -- and that can contribute to a dry spell even before it begins.
Suppose you're careful about how quickly you expand your business during a period of strong demand, on the other hand. In that case, you'll always have the capacity to handle new clients, and you'll never risk alienating anyone and causing an eventual downturn.
For more on how to avoid or pull your contracting business out of dry spells or to learn about any of our contractor's licenses or other contractor services in Utah, speak to the pros at Contractors School today.
