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3 Tips from a Seasoned Concrete Contractor

Follow these ideas to become a more profitable contractor.


“Stag Pool Party” Scene from commercial by Farmer’s Insurance – Oct 27, 2014 (c) Farmer’s Insurance

In the Farmers Insurance commercials, the tagline is: “We know a thing or two, because we’ve seen a thing or two.” I feel the same way about the concrete construction industry. I’ve seen a lot of changes in the industry, as well as noticing that some fundamental truths never change. I’ve made a lot of mistakes, and even learned from a few of them to become a better contractor.

Following are three tips I’d like to share with you that can help you improve your concrete construction company.


Always Be Selling & Marketing

The old adage, “Nothing happens until someone sells something,” is brilliantly simple, yet powerful. Without effective sales and marketing, companies cannot reach their revenue and profit goals.

Many contractors stop selling and marketing when their schedule fills up. Then, when their backlog dwindles down to a few jobs, they scramble to keep their crews busy. They cut their prices in order to get work quickly.

Their workload increases, but it’s at low profit margins. With a backlog of work again, they stop selling and marketing. As this cycle repeats itself, contractors find themselves with profit margins lower than what they should be.

It’s important to keep your sales and marketing funnel full, regardless of your backlog. As your schedule fills up, continue selling—but raise your pricing on new estimates. Your bid/win ratio will suffer, but the jobs that you do get will be at higher profits. Adjust your pricing based on your backlog, but don’t stop selling.

By maintaining your sales and marketing efforts, you’ll still have a lot of deal flow when your work begins to slow down. You simply drop down to your standard pricing to increase the amount of jobs you need to keep your crews busy. This is much different than panicking when you don’t have work and cutting your prices to unprofitable levels.


Labor Is Crucial

Your ability to attract, hire, train and retain good employees will determine your company’s success in the coming years. While having the right people on board has always been important, in the last four years it has become every contractor’s top concern.

Contractors across all trades are experiencing hiring headaches. The good news is that if you can be just 20 percent better than other contractors at hiring, training and retaining good people, then you’ll have a huge competitive advantage. You’ll be able to take market share from your competitors. And, most importantly, you’ll be able to make more money on every job.

For many contractors, the Human Resources (HR) side of the business is a necessary evil. You’ve needed to have someone within the company handle payroll, worker’s compensation and employee benefits. Business owners would much rather be out in the field where the work is being done. However, your HR activities will have to play a larger role in your company. More resources will have to be allocated to HR. More time and energy will have to be spent learning how to hire smarter, train faster, and keep your people longer than you have in the past. Your HR person(s) will have to be better than other contractors in your market in the war for good employees.

In today’s business climate, every dollar you invest in the HR side of your business will produce higher returns than ever before.


One Is a Dangerous Number

For anything in your business, one is a dangerous number. One estimator, one layout person, one layout instrument, one bookkeeper, one boom truck, one boom truck driver, one customer that accounts for more than 25 percent of your work.

Whenever you have just one of anything in your company, you are in a vulnerable position. If that one person left, or that one vehicle broke down, or that one customer left you, your company would have a very difficult time recovering. In certain instances, it could cause the company to go out of business.

Look at every aspect of your company and ask yourself where you have just “one” of someone or something. If you are like most concrete contractors, you’ll find plenty of areas that fit that description. While it can be impractical—if not close to impossible—to add a second one of everything, think about how you can reduce your exposure. Where can you cross-train someone who could fill in for the primary person? If a piece of equipment goes down, could you rent something similar, or hire another contractor to help out? For the customer that is responsible for 32 percent of your revenue, what prospects could you sell that could reduce that high percentage of work?

Begin looking at your vulnerable areas and develop plans to reduce your exposure. Then, work on those plans until you have good back-ups in each area. Don’t wait to work on this until you lose your “one.”

If you can make improvements in response to all three tips I’ve given you, then you’ll be far ahead of other contractors in your area. You’ll be in a much less vulnerable position, and you’ll be a more profitable contractor.

4 Responses to “3 Tips from a Seasoned Concrete Contractor”
  1. Adam says:

    Jim, an important article you have shared. Actually, I am also planning to enter into this business but was searching for a fresh article like this one. So it will help me in the future. Would appreciate it. Keep sharing more !!

  2. Art Collier says:

    You are absolutely right that so many guys stop marketing their businesses and end up in a cycle of bad work with low margins. You also mentioned 1 being a bad number… this is true with marketing. But really if you have 2-3 solid lead sources for your business, that convert well, you should be able to increase your price, work closer to home, and be pickier about the work you do. Win win. And make more money of course. These days the bulk of our work comes from Google – not the paid ads, but the free areas / maps and organic search results. For instance, when people search for things like concrete contractors in Fishers, IN our website pops up there and people call us daily because of it. It took a few months to get us to those spots on Google, but now we make lots of money because of it.

  3. I am thankful for the advice provided in your article, including the third point, which mentions the importance of having multiples of everything in order to be as protected as possible. My elder brother is renting a lot for a restaurant business in the future, so I believe that he is looking into hiring a concrete contractor. I will be sure to relay your article to him in order to help him be prepared once the time comes for him.

  4. Rory says:

    I started out as one and quickly realized that if I were to go down this path as a licensed concrete contractor that I needed a team and I needed them to be skilled and knowledgeable in the industry. We’re a full-fledged thriving business now, It’s been a fulfilling career, to say the least.

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