It is absolutely true that independent contractors play a vital role in the development of the economy. Most people prefer hiring an independent contractor because of the flexibility, convenience, and affordability associated with it. Hence, starting a small contracting business certainly seems like a logical and promising decision in today’s times. However, it is also a fact that the challenges in this field are many, and the competition is high.
Highly complicated legal procedures, the attrition rate of workers/labours, and lack of funds are some of the major challenges that most small contracting businesses face. Once you start a small contracting business, the focus should be on maintaining a decent growth rate. Proper planning and patience can be quite helpful in this regard. Here are some tips you can keep in mind in order to make your contracting business a successful one.
How to turn your small contracting business into a success story?
Determine the business structure: When it comes to setting up a business or legal structure for your contracting business, you need to be very sure about your choice. You can be a Sole Proprietorship firm or a Limited Liability Company, etc. The kind of structure you choose for your general contracting business matters a lot in determining the taxes and other facets of accounting. It has been seen that LLC is the most popular choice among the would-be freelance contractor. Once the elements of legal structures have been set up successfully, next, you must focus on running the business successfully. Getting a contractor license adds to credibility.
Have a business plan- Selecting the right business practices is quite essential here. The system selected by you for your contracting business should add more smoothness to the processes like bookkeeping, invoicing, scheduling, filing the taxes, task management, training the workers, etc. In addition, the system should prove helpful for each and every employee of your contracting company by offering them crystal clear instructions.
Assessing the internal elements of your contracting company is crucial, where you need to address questions like:
- Is your company financially stable?
- What is the best insurance policy for your company?
- What ratings your customers are giving to your services?
- Is the marketing plan delivering desired results?
Attain financial stability- For a contracting business of any size, it is essential to have some dependable sources of funding. Without such sources, expansion of your business can prove to be quite difficult. In a contracting business, customers often make delayed payments, which is the reason why small contracting businesses struggle when it comes to maintaining a proper cash flow. You must also find ways of obtaining loans and accessing lines of credit.
Work on intelligent marketing strategy- When we talk about the marketing strategy for making a contracting business a successful one, it is not just about earning new customers; but, it is also about grabbing more profitable projects. In short, you need to focus on quality so that you get both new clients and good projects. Yes, it is true that local base of potential customers should be targeted; but, it would be a big mistake to underestimate the reach of online marketing campaign. In addition, you also need to keep in touch with your established/past customers. It can help you by bringing down the sales costs.
Insurance is important- In a contracting business, there are many services where risks are involved. Accidents can happen anytime! Hence, the importance of liability insurance, as well as labor’s compensation insurance, increases tremendously. A well-chosen independent contractor insurance policy can provide your contracting company the much needed financial protection in such unwanted incidents.
Join the industry association- If you want to grow your business, networking is absolutely necessary. It can help you by nurturing your contracting business skills. Plus, you will also be able to keep yourself updated with the latest industry standards and practices. For this, become a member of the industry association like the Associated General Contractors.
Here are a few more things, you must consider:
- Never ignore documentation.
- Plan for small things, like day-to-day working, well.
- Work as per clients’ expectations for repeat business.
- Outsource functions like accounting and marketing.
- Use software programs for easy working.
So, those were some of the tips you must follow in order to make your contracting business a successful one. Do not forget to improve the brand value of your contracting business. It really matters a lot.