Many problems can be traced back to the "Halo Effect," which happens when a contractor thinks, "We are so good at (fill in the blank) we should expand into (fill in the blank)."

The most common situation is when a residential remodel contractor with a reputation and a substantial company generating 15% or more profits decides to start building custom homes. Or the opposite, a home builder who decides to branch out into residential remodeling.

Residential Remodel Contractor Building A Home

The processes, tools, equipment, materials, skills, and invoicing procedures required to build a house from the ground up differ entirely from modifying a home with people living there.

 

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Topics: High Profit Construction Projects, High Return On Investment, Clients or Customers, Boost Construction Profitability

Deciding to purchase something to help your construction business is a big decision. It can be challenging to part with hard-earned money, especially in the early days. To understand the right time to invest by purchasing something for your business, you must calculate whether the Return on Investment (ROI) would be profitable.

The cost is the money you spend making the purchase plus any indirect costs (such as training costs) related to the purchase. The ROI is a calculation of financial gains or benefits that you obtain due to that cost.

To determine ROI profitability, there is a simple formula you can use. If the purchase yields a positive return, it can be considered profitable. However, if the purchase does not earn back the money it costs, it would be considered a negative return on investment. 

 

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Topics: High Return On Investment, Clients or Customers, Contractor Tips, ROI for Contractors

Most business owners receive plenty of well-intentioned advice and 'helpful opinion' from family and friends. However, good business advice spoken from commercial experience is another matter entirely.

That's not to say it's hard to find, but finding a reputable source in the Internet age is sometimes less than straightforward – especially if you have a specific problem to solve and limited time.

This is why, for good times or bad, developing a network of peers or seeking out a business mentor can be a great idea.

 

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Topics: High Profit Repeat Construction Clients, Construction Accountant Who Listens, Clients or Customers, Contractor Tips

A USP (Unique Selling Proposition) is a compelling reason for your target market to choose your construction business over your competitor's. Examples range from cutting-edge service and product features to simply being more convenient and easier to find for the target market.

 

But it all boils down to meeting your local market's needs in a more accurate and improved way than the competition and being able to market these points more effectively.

 

By doing this, your business can stand out in the marketplace with a strong reputation attracting more clients.

 

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Topics: High Profit Repeat Construction Clients, Construction Accountant Who Listens, Clients or Customers, Contractor Tips

Networking can be a crucial way to keep your construction business growing.

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Topics: Networking, Clients or Customers, Contractor, Contractor Tips, Contractor Operating Tips

Customers are disloyal price buyers who purchase commodities and services with cost as their primary consideration. Clients are loyal value buyers who purchase goods and services with suitability as their primary consideration.

 

Every businessperson knows that customers and clients are not created equal. Clients are loyal, while customers will stray if they're offered a slightly lower price elsewhere. Some customers are demanding, while clients only call when they wish to hire you right away.

 

Every business must deal with a variety of customers and clients. But there are certain types of customers who do more harm than good to your construction business - they drain your resources while adding little to your revenue. 

 

 

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Topics: Construction Accounting, Clients or Customers, Customers, Contractor, Contractor Tips, Contractor Operating Tips

Customers - Are disloyal price buyers who purchase commodities and services with cost as their primary consideration.

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Topics: Clients or Customers, Customers Vs. Clients, Customers, Clients