As the owner of a home improvement contracting business, you understand the value of using the correct tool for a job. It’s very likely you also know a thing or two about hiring a good tradesmen to perform your subcontract work. Subcontractors who perform poor quality work are a reflection on you and your business and this can have a negative effect on your reputation. To be successful it is critical for you to assemble the right team and build a good reputation one job at a time. Projections for revenue growth in the home improvement sector are estimated to be between 5%-10% over the next five years. This growth curve represents real opportunity for the business owners who can combine quality service with an effective marketing plan.
Building a quality home improvement business requires you to invest some of your capital into the proper tools of the trade. Just like the saws, drills, hammers, measuring tapes, and power tools you use on a daily basis there are some other necessary items for your business that will not be carried in your toolbox but are equally as vital to your success. Not all of your competitors will make the effort to use the tools detailed here. However you can rest assured they are your current competitors and will very likely fall disappear from the market because they have attempted to take shortcuts to success.
Homeowners who have decided to start a sizeable remodeling project on their residence usually recognize there will be a certain level of inconvenience during the construction. Living in a home during construction is not only unsettling it is also an extremely invasive process where construction workers are present throughout the day in the homeowners personal space. Outstanding contractors understand this discomfort and address the concern with a level of professionalism above that of most of their compettitors. How does one go about acheiving an outstanding level of professionalism which goes beyond the customers expectations? Knowing and anticipating problems in advance is a skill mastered by the best contractors.
Home Improvement clients desire safety and security from thier contractors and the people that work for them. Homeowners want to feel secure that work will be performed as agreed and if issues arise they want to feel like you will make an honest effort to get the problem resolved. The following items are some of the tools your business should have to have to help clients feel secure.
Insurance- Proper insurance coverage is a must for the home improvement contractor. In most areas of the country you will not get a license without the specified coverage required by the licensing commission. There are a variety of insurance types and coverages but the list below is what is needed at the minimum. Those contractors who take short cuts and operate without the proper coverage will find themselves dealing with major problems sooner or later which more than likely will see the business fail in the end.
General Liability insurance protects the business owner from claims against damage done to persons or property in the general course of performing the jobs related to the business. Liability insurance will be needed if your client claims damage or negelegance on your part caused injury or damage to their property. This is a very basic description of liability insurance but do understand the importance of liability protection for those in the construction business.
Vehicle and Property Damage is insurance which covers losses arising out of operating a motor vehicle and any property damage caused as a result of the insureds operation of the covered vehicle.
Workers Compensation insurance is required by all states where a business has employees. The insurance covers employees who get injured on the job and provides for medical care and income in the event the employee is injured while at work. All businesses who have employees are required to pay for workers compensation insurance coverage for employees by are not required to provide it to independent contractors and subcontractor tradesman.
Surety Bond- These bonds are construction related insurance policies issued by a third party agency which promises to pay the homeowner if your company fails to fulfill the obligations of the contract. Surety bonds are more common in commercial projects but it is a good idea to be familliar with the term.
At this point you are probably wondering “What the heck does having insurance, permits, and licenses have to do with marketing my home improvement business?” The answer is simple and direct- most desputes in the residential remodeling and home improvement business are due to misunderstandings with the client and or poor performance by the contractor. The Better Business Bureau and other consumer advocacy groups are constantly getting complaints from homeowners who have been stiffed by their contractors. Operating your business in a straightforward and legitimate manner is the best marketing tool for your business.
Business License- It is essential you obtain the required licenses for remodeling contracting. Most licenses are trade specific for builder remodeler, electrician, plumber, etc. Make sure you and your subs are properly licensed. If there is ever a dispute with a homeowner which leads to legal action it will be dismissed if you or any of your sub contractors was not properly licensed.
Permits- Are job specific permission from the governing jurisdiction to perform specific work on property or a building. One objective of the permit is to ensure each structure constructed in the jurisdiction are built according to the current building code in place. Unpermitted projects are subject to cease and desist notices and are substantial risks to the property owners and therefore will result in problems for you.
Association Membership- A membership in your local home builders association is a wise investment. Members benefit by networking opportunities and also enjoy educational resources that keep them up to date with industry trends and updates to building codes among other things. Another option is the -NARI- National Association of Remodeling Industry membership. This national association promotes its members to homeowners who come to their site looking for referral contractor members in their community who specialize in particular trades. Businesses who maintain trade association memberships over a period of time help strenghten their reputations over those who are new members or non members.
Document Packages are one of the most effective and least costly marketing tools available to a contractor. As mentioned earlier, homeowners can be unsettled with the thought of construction workers in their home. No one wants problems to happen to them and a comprehensive document package detailing the scope of work, project cost, materials list, and schedule of payments is highly professional and very reassuring to all homeowners.
A detailed Change Order Process is also someting which separates professionals from the contractors who are rolling the dice between success and failure. According to the BBB, project changes and delays are where the majority of desputes and problems arise in home improvement contracting. Maintaining a defined method of addressing and documenting changes will help immensly in establishing your reputation as a professional.
Website- Your website is probably one of the single most important marketing tools for your business. Your website is your focal point of everything about your business. Gone are the days of static yellow page ads and flyers in the Sunday paper. Your website is the place all of your prospects will go when researching your work product ,your capabilities, and your reputation. It is where they will see photographs of your best work and read testimonials from all of your clients. The website is where all your contact information is published. The site is also where prospects can read about your certifications and association memberships. Your website will easily be one of the most significant first impressions of your business.
Start early building your web presence and work on updating it regularly. Make the appropriate investment of time and money in your web presence and keep a clear perspective on the value it has on your marketing efforts and spend appropriately. Remember how much a yellow page advertisement used to cost? You should have an appropriate budget for your website and allocate some funds to advertise it in the search engines.
Your reference list should contain every customer you have ever worked for. You can build an excellent reference list by asking every client early in the stages of the project if they would consider being a reference for your business. Also get permission to document the job with photographs. These photos will prove to be invaluable in presenting your work to prospective customers. Planning early to build a reference list of all your customers will help you build a diverse and chomprehensive portfolio of all your work which you can update as you grow.
Building a successful marketing strategy for your business takes advance planning and a good deal of effort. Many homeowners are skittish about issues which can happen by hiring an unprofessional home improvement contractor. Problems with contractors are so common accross the country that most homeowners are sensitive to the problem. Get ahead of the curve and build a longterm business by understanding what is important to your customers. Taking the time and effort to establish your business reputatinon as a reliable and trustworthy contractor can produce very lucrative returns on your effort. Making sure you operate your business in a professional manner with sufficient attention to detail will set you apart from many of your competiors. Making sure to follow the recommendations above will surely help you build a profitable and vibrant business in your community.
Ryan Johnston has gained a lifetime of proacticle knowledge in real estate, home construction,and home imporvement issues throght work and persoanl experiences. For the past fiveyears he has worked as a Commercial Lender for a growing gulf coast based communitybank concentrating on loans for small businesses and consumer home improvementloans. In this position Mr. Johnston has dealt with numerous real estate , construction,and home improvement projects. He has also purchased, remodeled, and built multipleresidential properties. To learn more about Home Improvement Contracts follow his wrting at www.SafePact.com