FINANCIAL MANAGEMENT - EXPANSION, GROWTH and STABILITY
Many contractors develop a niche in the market. At times, the local market will be expanding or contracting depending on technology, the economy, and customer needs. Consider every estimate request an opportunity to monitor the markets direction.
When planning for expansion, keep two goals in mind. It is logical to expand with the kind of work you do best. Contact prospects that are in the same line of business with that of your customers (perhaps its gas stations or convenience food stores). Because of your familiarity with this work, youll be able to estimate more accurately and increase your chances of getting the job. Your reputation and expertise will precede you. Further efficiencies can result from your setting up a truck with the materials needed for a specific type of job, driven by an employee experienced in this work. On the other hand, if there is certain work you dont like, bid on something else.
The second goal in expansion is to ride along with advances in technology, and get into new work thats not only becoming popular, but is not overly competitive because all contractors are not familiar with it. How about burglar alarms and fire alarms? What about telephone lines and cable TV installations? Manufacturers and distributors of these specialized items will be glad to provide training on installation and service. Very often this work can be done at the same time youre on the job doing standard electrical installation.
Determine the value of the jobs you can do efficiently. Are they in the thousand-dollar range, or perhaps the five-to-ten thousand-dollar range?
Start small and keep employment stable. Grow from a solidly established base. Employees who develop confidence in their job and their company grow to become company men and women. At that point, you know you can count on your people. You cant get good employees with only short-term intent and with no benefits or stability. Your employees have needs (such as food, clothing, and shelter to name but a few) that they hope and expect to achieve by doing their jobs. We all have needs, and continuous employment in challenging, gratifying work is a major source of obtaining our individual needs.
Mike Holts Comment: This newsletter article was extracted from my Business Management and Management Skills Workbook. Watch for our next newsletter, and as always, we encourage your comments and feedback. Send us your real-life experiences. Please respond to Barbara@mikeholt.com <mailto:Barbara@mikeholt.com>.
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