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My Big Interview That Never Made It To Publication (Until Now!)

How To Make $100,000 A Year

Some time ago I was approached to do an interview by a major online publication, but for whatever reason they never actually used the material.  I spent a good deal of time putting together my answers for the questions, and have decided that instead of the whole thing being a complete waste of time that I would instead publish it here at Rich Contractor.  Have a read…maybe you’ll actually pick up something helpful:

What is your top advice for a beginning contractor to get his or her business started on the right foot?

For those just starting out, it’s imperative that they have all their legal and administrative ducks in a row before they even think about swinging a hammer on somebody else’s property.  This protects both the contractor and the consumer.  Specifically, he or she should register with their state as an LLC or S corporation, they should secure a license if required, and they should be fully insured and bonded.  It’s surprising how many aspiring contractors skip one or more of these very basic steps in the beginning, but those who do are playing with fire in my opinion.

Is there a fast track to success for contractors? If so, how does one get on it?

In order to ramp up quickly you absolutely must have a presence on the internet.  Consumers continue to move away from more traditional forms of marketing (like the phone book) and are instead looking online for service providers.  A good-looking business website is critically important, and it should also have a built-in blog that is routinely updated.  Smart contractors also leverage Google My Business, the Google Pay-Per-Click program, and social sites like Facebook to completely flesh out a web presence that will pull in leads over and over again.  Many new contractors are reluctant to take this route and would rather just bang on doors, but marketing online is the way things are headed.  Those who embrace this reality will leap over their competitors in a relatively short period of time.  I’ve done it myself and I’ve seen it done by others countless times.

What is the best way to distinguish yourself as a contractor in the eyes of a potential customer?

The most common trait I’ve noticed with the contractors who find success is that they excel in communication with their team and with their clients.  They articulate well during the bidding process, they return calls and emails right away during the work phase, and they follow-up after completion to ensure that their customers are thrilled with the final product.  Homeowners love this kind of attention, and it tends to result in repeat work and lots of free referrals for the contractor.  Most service providers aren’t very good with this aspect of their business, but that opens up huge opportunities for the ones who are.  For those who have amazing construction skills but simply aren’t good with people, I would advise that they partner with someone who IS – perhaps a spouse, friend, or trusted associate.

What are the most common mistakes that beginning contractors make?

Aside from not communicating well and not leveraging the power of the internet, perhaps the most common rookie mistakes are wasteful equipment spending and under-pricing work.  It’s a double whammy that can doom a business from the very beginning.  For example, the new contractor who runs out and buys a brand new $40,000 work truck on credit is kneecapping himself from day one.  The $1000 monthly payments will seriously hamper his ability to buy other necessary tools and products, and he’ll be scrambling to stay afloat from the get-go.  A perfectly good, no-frills, used F-150 can be purchased for under $10,000, and this can free up all kinds of cash on a month-to-month basis.  Perhaps unexpectedly, this is quite often the same kind of contractor who will lowball his estimates in a desperate attempt to get work so that he can keep up with his bills.  It becomes a slippery slope where he makes less and less money for his time but his costs continue to climb.  It’s just a matter of time before he has to throw in the towel and call it quits.  This can all be avoided by keeping costs as low as possible while charging a fair market rate in the beginning.  As the business proves itself and becomes larger then increased spending on better equipment becomes a more viable option.

Success story?

Just in a general sense, what I’ve discovered is that my efforts to improve my businesses have had the unexpected side-effect of improving myself.  The occasional issues that have arisen with customers and vendors have forced me to get better when it comes to conflict resolution, communicating effectively, and negotiating.  I feel it’s made me a better all-around person, and these are improvements I’m not sure would have happened otherwise.  So it’s been a story both of financial and personal success.

Horror story?

One of the first jobs we had seemed like a horror story as we experienced it, but in retrospect I see that it taught us some valuable lessons and forced us to get better.  What was supposed to be a one-week project turned into three weeks of misery.  The homeowner questioned every single thing we were doing, she watched over our shoulder almost the entire time, and she complained about everything from dust in the air to the noise of our tools.  To cap it off, she accidentally sideswiped my truck in the driveway one day, causing thousands of dollars of damage.  We couldn’t wait to finish it up and get out of there.  Yes, the customer was kind of nuts, but I see now that we did a lot to fuel the problems.  The difficult clients are the ones who make you better, oddly enough.

What does the contractor industry look like today versus 20, 30 years ago? Any big changes?

I think the big thing is how technology and the advent of the internet has forced contractors to evolve and to work more on managing their reputation.  It used to be that hiring a contractor was a roll of the dice.  Now, prospective clients can go online and get a more transparent look at your company from the likes of Angie’s List, Google reviews, and the BBB.  It’s great in the sense that truly great services and companies tend to be rewarded for their efforts.  There’s never been a better time to be a contractor if you’re honest, competent, and professional.

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