Need to make more money?
how to make more money in your building business
One of the common reasons builders start their own business is because they want to make more money than they do on the tools.
However, while many may make more than they did on the tools (double in many cases), they often spend much more time doing so.
Making significant money in building means understanding what it takes to be an owner of a building business rather than a builder with a business. So, here are 4 things you can do.
1. Become a marketer of your business
Almost all the builders I start working with are really good at producing great workmanship, or delivering excellent service, but nowhere as good at marketing their business as they are at building. Often in the early days of their building business, when still on the tools, or directly involved in project managing, they got such good referrals that they didn’t need to do any advertising or go looking for work! It felt good - not having to spend time or money on marketing.
But unfortunately while happy customers are what you want, having referrals as your only source of new leads means you are not in control of your income.
Savvy builders, who grow large incomes, are marketers of their business.
How builders can market their business
They will utilise great referrals as testimonials and bring in even more leads. They understand that the market doesn’t pay them to be the best in the business. Rather the market rewards those businesses that focus on solving problems. This is a fundamental truth.
When you fully understand that you need to become a marketer, rather than just the owner of your building business, then you have uncovered the number one key for growing a large income.
You see, as a marketer you will spend quality time and energy finding out what is your market’s biggest problems and shaping solutions that solve these problems. Then you will design offers that speak directly to potential customers experiencing these problems and engage in marketing activities that attract.
Once you have a marketing system that works, you will then have in your hands the key tool to generate more leads than you can handle!
2. Quote to make money
How often a builder is tempted to sharpen the pencil and trim his margins in order to “win” a contract! It feels good to sign an agreement with large numbers on it, especially if in doing so a larger company is beaten! It feels like being up with the “big boys!”
Yet, it is those same builders who tell us how they have had to learn the hard way, that reducing margin to win a contract is the fastest way to the bottom. To make really good money in building you need to know how to quote to make money, not to simply to win a job.
So to quote to make good money you need to have an accurate grasp of the ability level of your teams. For example, the time it takes them to complete set tasks. Sure, to do this requires careful recording of all aspects of jobs and then using these records to project forward to the likely costs in a similar job.
how builders can make more money
Quoting to make money also means knowing when not to compete. This is especially true if you are competing for a large job outside of your area of previous knowledge. It might be fun to learn, but almost always it will be costly. Every quote involves risk. So to make the most money know how to quote in such a way that you minimise that risk.
3. Turn away low value work
Doing heaps of work at the lower end of the market is OK provided it can be scaled up without additional financial costs or increased risks. Careful builders can generate considerable income by turning over lots of low margin work. It requires good project management, a smooth workflow and above average cash-flow management.
However, for the small builder, low margin work is often associated with price conscious customers who can create significant problems if they are unable to complete payment on time or to schedule.
So, to make money in your building business you need to decide what is it that you do well and can do so profitably - and stick to this. Also you will want to clearly define the terms on which you will contract with customers. Then you can turn away those customers who do not fit your parameters.
It takes courage to operate this way, but if you have everything else in place then it will protect you from spending time and energy in unprofitable activities so you focus on profitable work that results in increasing your income.
4. Master selling your services
There is no question in my mind that the builders who create the largest incomes are those builders who have mastered selling in their businesses. Like marketing, selling is the only other revenue generating activity in your business. Yet many other builders turn up to sales meetings with little or no preparation, little understanding of what sales is all about and few if any sales resources. No wonder they struggle to earn more than a guy on the tools!
Further when they go into a sale unprepared they are more concerned about themselves and how they will make money rather than with the client and what that client needs. Sometimes, because they need work they, unwittingly, present as desperate and wonder why their client seems unwilling to make a commitment. No one wants to deal with a desperate supplier!
Whereas the builder who has mastered sales and has a developed set of resources, a sales process with powerful scripts is likely to get an agreement at the first meeting! It may not be a completed build contract, but it is a signed agreement - often with the payment of a deposit! They are way more likely to get the final contract - and at their price and terms!
Sales is the only truly revenue generating activity in your business.
Setting out in business has challenges but focusing on and surmounting the critical ones is the way to ensure that your business returns significant money for you and your family.
Graeme Owen - The Builders Business Coach
P.S. Whenever you’re ready….here are 4 ways I can help you grow your building business:
1. Grab a copy of my free book
It’s a road map of a successful 15 minute sales call that’s guaranteed to increase your conversion rate. Download Here
2. Join Trade Mates and connect with builders who are scaling too.
It's our new Facebook community where smart builders learn to get more income, time and freedom. View our free business resources for builders. Ask questions of like minded business owners and business coaches. Give your knowledge and expertise to help others. Join TradeMates
3. Join My New Group
I’m starting a new group called “OnRamp” to kick start sales and marketing in your business. If this sounds like you, message me with the words, “OnRamp”, and I’ll get you all the information.
4. Join Loft Members
If you’d like help to get off the tools, make more money and get your life back...just message me at graeme@thesuccessfulbuilder.com and put “LOFT MEMBERS” in the subject...tell me a little about your business and I’ll get you all the details.