Small contracting businesses are really not much different than any other small business. They suffer a great deal of challenges that can lead to going out of business quickly if not properly addressed. In fact, more businesses don’t make it than those that do. It’s important to get over that critical first year hump, and doing that means understanding the challenges you face.
From efficiency and cost-cutting to labor issues and the need for the right surety bonding services, it’s not easy facing up to these challenges. Learn about five challenges small business contractors face, including getting contractor bonds, and how you can overcome these hurdles to find success.
Highly Competitive Field
Contracting businesses face more competition than just about any other kind of job. It’s a very fierce industry and this can haunt you for all the years you’re in business. You need to know how to put yourself ahead of your competitors, win bids, and keep your business healthy while still offering outstanding and trustworthy service and results.
Figure out what it is that sets you apart from the others, and focus on that in everything you do. Think hard about it and don’t go with the easy, “we provide better work.” What specifically makes you different? That’s your key.
Finding Skilled Workers
Contracting and construction requires both skilled and unskilled labor. You can find unskilled workers just about anywhere, but the right skilled (often union) labor such as qualified and licensed tradesman can be a problem. In fact, almost 75% of contractors face a shortage of skilled labor, and this issue stretches back all the way to the eighties.
Unfortunately, this isn’t an easy problem to solve. You’ll need to leverage all your contacts and networks, and keep your ear to the ground to take advantage of any opportunities that arise.
Reliable Payment Schedules
Delays in payments haunt every contractor. Your clients will find any reason to avoid paying out on time, largely because the costs are so high. A lack of understanding about how this hurts your company, tons of bureaucratic gears spinning, or just a lack of caring about the effects on you are all reasons this happen. You need to write into your contracts the consequences for late payments, and develop relationships with clients you can trust to pay on time.
Just like every business, contracting companies face problems of limited capital, especially in their early days. When you encounter stumbling blocks, hurdles and challenges in operations you might not have the extra money to make up the time. You don’t have financial freedom to counteract these issues, to expand or to bring on more full-time staff. That’s where bonding becomes so important.
Bonding is the means by which you reassure your clients that by hook or by crook, you’ll find a way to finish the job you promised. It also reassures your subcontractors that they’ll be paid, as well as your vendors and material suppliers.
Getting bonded can be a real challenge if you don’t work with the right service. For many years, NSSI has provided contractor bonds for payment, performance and all other areas to many small businesses across the U.S. Our SBA Surety Program allows you to get easily bonded for government contracts to compete with the best and grow your company. To learn more about the SBA program, get in touch with us today!