One of the biggest challenges of being a small construction company is struggling to compete with the big boys. You feel like your resources are limited and the field is skewed against you. After all, how can you compete with someone who has many millions of dollars at their disposal? The key is the right approach and the right bonding.
Leverage your capabilities and the benefits of being a small company, and you will find success. Read how the three C’s — credit, capacity and character affect the work your company can do, and how the right surety bonding can make all the difference.
Credit is a huge issue for small businesses of any kind. In order to get the right insurance, to get loans for projects, and to generally finance your business. Fortunately, there are SBA loans available to qualifying companies, equipment leasing opportunities, and the ability to leverage your existing equipment as collateral in loans.
When looking to finance your company, you need to be very careful about the route you take, and do your research. Some loans can hammer you with interest rates and fees, and will hurt your credit more than it will help.
Capacity and Job Size
Before you jump into bidding on a huge government project, make sure that you can handle it. It can be tempting to try to grow your company faster than you can handle, and it never helps to get in over your head. Examine carefully what the job is going to require, and look at the capacity you have at your fingertips before you put in a bid. Remember, you’ve got more at stake than profit — your first big job or two are also building your company’s reputation.
A small company has a lot of freedom in how they approach a job. They enjoy peace of mind in being able to carefully evaluate and know their contractors, and can carefully oversee the way work is performed. This is a definite benefit over large companies whose workers often get lost in the shuffle of big corporate politics.
Small companies also need to be careful about the equipment they source. Since they have less of it, they tend to go with the best, whereas large companies see profit first, and will look to save money at every turn. This can lead to breakdowns and timetable delays.
Company Size and Work Allowed
Your company size and work allowed are affected by a number of sources, including whether or not you have the right bonding. The Small Business Administration has a special program designed specifically to allow small construction companies to bid on government contracts up to $6 million.
If you’re ready to step it up and compete with big business on major contracts, NSSI is here to help. We are pleased to provide direct access to the entire SBA contractor’s application package, and we work to streamline the process of all construction surety bonding. For more information or help getting started, give us a call today!