11 Tips from Your Colleagues

1. Diversify skills. The more skills you have, the more productive and more useful you are to a client, says Dean Bennett, president of Dean Bennett Design and Construction Inc. in Castle Rock, Colo. “It’s a survival technique,” he says. “If you’re doing one job, and the client asks you, ‘You don’t happen to know anyone who does tile work, do you?’ and you say, ‘Absolutely, we can do that.’”

2. Don’t skimp on materials. Think long-term when you buy materials, Bennett says. If you always go for the cheaper material or product, then you’ll lose money having to go back to the homeowner to fix it or worse, you’ll get a poor reference.  

3. Develop a system for invoices and invoice on a regular basis. Cash flow can become a serious problem if you’re not keeping up on invoicing customers. For a larger job, Bennett says his contracts allow for invoicing on a weekly basis for the progress made that week. “That way, the customer doesn’t see one gigantic bill at the end,” he says. “It ensures that there are no surprises, that the contractor keeps to budget and that contractors are not extended too far financially.”

4. Don’t be pushy; be honest. Explain the project, its costs, process and timelines honestly to clients, and don’t oversell, Bennett advises. “I hear this all the time from people. They say, ‘He’s just trying to tell me what to do all the time,’” he says. “Or some guys are telling customers they can do a job in three months when you can’t even get a permit in that time. Just be honest, or you’re setting yourself up for failure.”

5. Place a sign outside your current project. But make sure you get the owner’s approval first. “I’m amazed at how many contractors don’t do this,” Bennett says. “Half of my inquiries are just people who drove by a project.” He suggests attaching a box to your sign and placing fliers that explain your services inside.

6. Hire the right people. Whether it’s subcontractors, accountants or full-time staff, take care when hiring. “Selection of good quality people is one of the hardest things,” says Corey Barton, president of CBH Homes of Meridian, Idaho. “To grow, your people need to be trustworthy, devoted and have a good work ethic.”

7. Don’t shortcut the design process. Many contractors who are building-only experts want to dive into the building, but attention to design can mean greater ease and productivity in the construction phase and a better product, Bennett says. “If you can find an architect or a design/build specialist you can work with, it makes a big difference,” he adds.

8. Keep communication open. “When I was doing everything myself, I had all the information, so it was really efficient,” says Barton, whose company has grown to 115 employees and was featured on Extreme Makeover: Home Edition. “When you get more people, communication inefficiencies happen and mistakes result.” To keep communication open, he meets with his construction managers at least once a week.

9. Understand timelines. Bringing multiple subcontractors’ timelines together is an art, Bennett says. “You must have an ability to know when to call whom and how to schedule to factor in delays,” he says. Know how long things are going to take so you know when the electrician needs to start or so you order something in time. He recommends working with subcontractors who you’re familiar with and know are dependable.

10. Build contingencies into your budget.  For small jobs, adding 10 percent for unexpected costs and 25 percent for bigger jobs is reasonable, Bennett says. “With remodeling, sometimes you don’t know how things were built until you tear them apart,” he says. “Put a ‘surprise clause’ into the contract, and tell the customer there’s the possibility something will come up.”

11. Be ready to sacrifice. When the customer has a problem with something and wants it changed, sometimes you have to give in, even if it means your profit margin might be lower, Barton says. “It’s just easier to say, ‘I don’t like it either,’ and change it,” he says. “You’re earning their trust and making them happy. Word-of-mouth marketing is such a large part of this business. You’re paying for advertising one way or another.”