6 Fatal Mistakes that Could Be the Death of Your Business

6 Fatal Mistakes that Could Be the Death of Your Business

As a contractor, you have a lot more responsibility than just making sure that your crew does good work on the job site. You’re also responsible for the business side of things as well. While the work you and your team does has a significant effect on how successful your contracting business is, there are other factors that you need to consider. In particular, here are a few things that are easy to overlook that can have a huge negative impact on how your business operates.

Not Keeping Enough Cash on Hand

The way you handle money is an important part of running a business. Obviously, you need to make sure that you and your employees get paid. You also have other expenses that your company will need to cover, though. Utility bills, fuel costs for company vehicles, equipment maintenance, material orders… all of this adds up. If you don’t have enough money in your company accounts then you’ll either have to start buying on credit or cutting corners, and either one of those can send things spiraling out of control.

Failure to Communicate

Effective communication is important for any business. You’ve likely already mastered the art of communicating with your crew, telling everyone exactly what you need them to do and listening to any issues that come up. Some contractors have issues when it comes to being open with people outside of the business, however. If you don’t communicate with customers and others who require work updates, you could develop a bad reputation even if you normally do great work.

Letting the Insurance Lapse

Insurance is vitally important when you’re a contractor, but not all contractors treat it with the respect it deserves. If your insurance lapses, any accidents or damage that occurs on the job site will be on your shoulders. Working without insurance can also open your company up to lawsuits and other legal issues and may even cost you licensure if it’s discovered.

Bidding Without Research

If you bid the same types of jobs most of the time, you’ve probably got the basics of the bids all figured out. Should you decide to take on jobs that require new materials or clients that have more exacting requirements than you’re used to, though, this familiarity during the bid process can be a problem. If you don’t spend the time to do additional research to get the bid just right, you might underbid and end up losing money on the job.

Overpromising on the Job

There are a lot of contractors who overpromise when it comes to jobs, either saying that the work will be done faster than it actually is or that the end result will be better than the client expects. This results in having to explain later why the job didn’t go quite like you’d told the customer it would. While this happens once in a while, if it’s a repeated thing, then you will quickly earn a reputation for not delivering on your promises… something that can make it a lot harder to get good jobs in the future.

Skimping on Safety Training

There is no reason why a contractor should skip or cut back on safety training, but it happens. Most of the time it’s because everyone believes their current training is “good enough” or there just isn’t enough time for additional training because there’s a lot of work coming in.

A lack of proper safety training can cost you work, net you significant fines and may even cost lives. If the word gets out that your crew doesn’t know how to stay safe on the job, you’ll be hard-pressed to find people willing to hire you on their job site.

What are some more mistakes you’ve heard of other contractors making with their business?