Why Contractors Fail
 

Why do contractors fail? And, what is failure? If we have worked hard all our lives building a business and after years of hard work, sweat and tears realize we are no better off than when we first started, have we failed?

The answer to the above questions lays in our ability to manage our business in order to achieve pre-determined goals and objectives. This would have been the specific track we selected to travel when we embarked on our business ownership journey. The truth is, very few contractors ever took the time to establish such an objective or goal, or to establish the necessary systems and learn the necessary business skills to achieve them. So the truth is, we never set out to accomplish anything. That alone may be the real meaning of our failure.

Contractors do not fail for a lack of great construction skills. Contractors fail for a lack of good business skills. Contractors are really technicians or trades-people. They have mastered the construction skills very well, the skills required to do the actual construction work, but when it comes to being proficient with the business end, they fail miserably.

Being a contractor entails a lot more than construction skills. Construction is really a business. It must have a specific purpose with established goals and effective systems in place to be profitable. Your business is really about making money and when you’re not as proficient as you should be in making money, you are not really being as successful as you should be, therefore you are failing in a sense.

Too many contractors where so anxious to have their own business, they failed to master basic business skills. At first, it wasn’t really important. Hard work and long hours made up the difference. But at some point, the contractor realized the need to hire additional people or to take on additional work. When this decision is made, the contractor enters a higher level of business ownership. This higher level requires business skills that the majority of contractors do not possess.

A word to the wise

Some contractors feel that the work and money they have made during a boom economy is a direct result of being a great businessperson. Nothing could be farther from the truth. In a booming economy, such as we have right now, business comes to you whether you want it or not. It has absolutely nothing to do with your skills, or lack of, as a businessperson. It you think I’m wrong, just wait around to when the economy spirals into a downtrend, the number of “use to be a contractor” that will perish in the wake of the downtrend will be burden of proof as to what I’m saying. Contractors that lack good business skills will be the first to fall. So why wait and become members of the List of Has-Beens?

Where contractors fail

Some contractors fail at understanding sales and cost of sales. Many can not even calculate their cost to complete the work. Instead they rely on someone else’s numbers. They have no idea where the number came from, nor do they even bother to find out if it is going to work for them. Hey, the number is the number, so therefore it must work. Wrong. What works for someone else, doesn’t necessarily mean that it will work for you.

Some contractors don’t even bother to track and record job costing, nor have they mastered the skills of reading and analyzing the information. They fail miserably at managing people, assigning responsibilities and delegating authority. Instead they run ragged all day trying to tie up “loose ends.” Hey, in case you haven’t noticed, there is only so much of you to go around. No wonder you feel tired and frustrated.

Overhead is left to go wherever it wants to and it is the responsibility of the accountant to let you know if yours efforts this year were profitable. Even worse, they actually believe that the checkbook balance tells them if they are making profit! (Hmm, I had the money last month, I wonder where it went?)

They never learn how to market and sell their services properly, and what is value anyway, who needs it. They are happy and content to go with the flow and let their competition set their profit margins and sales volume. This is all wrong. If you have suddenly realized that this is how you’re conducting your business, then you have got to commit to doing it properly.

The good news is this

If you are fortunate enough to be one of the contractors to suddenly realize that you are doing it all wrong, you’re in luck. You can change and you can learn how to become an astute business owner. It takes time and commitment, but you can do it. Here is how you can get started.

Find yourself a good seminar, book or tape series that will show you how to get started. Immerse yourself in its contents and knowledge. Keep at it until you completely understand the mechanics and how it works. Apply it to your business. Don’t expect immediate results, it doesn’t work like that. To build a solid, secure business that works for you takes time. I strongly suggest that you consider purchasing our tape series “How to Build BIGGER Profits in Your Construction Business”. This audiotape series is packed and overflowing with vital information about building bigger profits and developing a business that works for you. You can also join our “Golden Hardhat Private Roster Mentoring Program.” This program will give you unlimited access by phone, mail, e-mail, fax or visit, to me, in order to show you how to implement performance proven systems into your business.

Why wait until the economy changes and your tangled up in it? You won't have the resources, or maybe even the business to improve. If you have realized you need help and then there is no better time then right now to do it.

You don’t have to struggle all by yourself. You can learn and master these business skills. You can seek out those who have the knowledge to help you and to show you the right way. All it takes is your commitment to improving your business and personal life. You realize you need to do it, so why wait.

Are you ready to accept the challenge?
 

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