Are you a commercial framer or drywall contractor that is struggling to win profitable work? Do you feel like you are chasing work and wasting time? Contracting can be difficult especially if you are in need of more work. Contracting can feel like a race to the bottom where the lowest price wins and where quality and service are no longer valued. In this article, we are going to discuss how to focus on a niche, build strong relationships with fewer clients, turning down wasteful opportunities to estimate and bid, learning how to focus on profitable jobs, and creating an efficient business by focusing on moving quickly.
Table of Contents
Define Your Niche
The reality of contracting is that you cannot be everything to everyone. Can you think of an interior building out contractor who does everything from residential to health to hospitality to restaurants to churches to gas stations? Very few do it well and most tend to do it poorly and get run off of their jobs frequently. It pays to focus on specific kinds of jobs for many reasons:
- You get really efficient and fast at reading, estimating, winning, and executing on jobs
- You build a reputation for yourself in your community
- You can build up a predictable supply chain and save money as you optimize our material usage
- Your labor gets better as they get more familiar with the work
Some times you have to open up your range of interests if work slows down, but in general you can pick a niche in a particular geography and service it well. Here are some examples:
- Hotel framers
- Gas stations framing and buildout crews
- High detail framing contractors in churches and high end restaurants
- Hospital work
- Multistory
- Tenant buildouts
- Truss installers (this is one people don’t realize exists!)
Some of these are more approachable than others. For example, a tenant buildout company doesn’t need as big a crew as a multistory framing crew. Ultimately, you need to figure out where your skillsets and interests lie and pursue a niche that you can be happy and successful in. For example, if you are good at sourcing big teams of labor, you may be good at building hotels and multifamily. If you prefer to work alone with a small crew, then you may be better at smaller tenant buildouts and high detail work. Figure out the intersection of what your market needs and what you are capable of doing well and safely and make that your niche. Additionally, figure out if you want to travel a lot or stay put in a single area. Contractors who are willing to travel can follow national brands as they build in various locations across the nation. We know several contractors who exclusively build brands like Love’s gas stations and Dollar Generals. Those big brands pay a premium to have good subcontractors who can execute well on their work.
In short there are many different possible business models for framing contractors.
Build Strong Relationships with A Few Key General Contractors
As an owner or estimator or project manager in a framing and drywall contracting company it can be tempting to throw bids into the wind and hope that one lands. This is dangerous for many reasons:
- When you bid a high volume, the likelihood of you making an estimating or scope mistake is higher.
- Winning a job by being the lowest bidder is sometimes a bad thing. You may have left profit on the table or worse you might be loosing money on the job.
- You can’t spend the needed time to develop your relationship with the project owner to ensure that you are the first choice
So what is the alternative? The alternative is a focused approach that starts with defining your niche. Refer to the previous section. In short, what are you good at that has a market of buyers who want that service? Once you understand your niche then you can start to target prospects (individuals and companies) that need your service. This may be individuals, small GCs, medium GCs, larger GCs, owners, or various other contractors that need your help. Once you have identified who owns and contracts out the projects in your niche, then create a target list of companies and individuals you want to spend your time courting. Bid jobs with those people. Figure out who is reasonable and good to work with. Life is too short to waste time on unreasonable contractors.
We could go on at length about this process, but the magical end result is this. You will find a general contractor who has your back. You will find someone who is loyal to you who brings you work and helps you succeed. They will not try to undercut your prices with a cheaper subcontractor. They will call you first when a new job comes up. For the sake of your contracting business you need to hold your customers to a higher standard.
Learn How and When to Estimate Jobs
Let’s talk about estimating. Estimating is the process of putting a price on a job. It is taking a job from unknown to some state of understood and known ideally to the point of being able to put a good bid (price) on the job. Sure there is technique on how to estimate, but a lot of times framing contractors don’t answer the question of WHEN to estimate a job. Estimating is a time consuming and frequently unproductive activity. Our goal as contractors should be to maximize the number of jobs we can win with minimal time spent estimating. Ideally, we would only do takeoffs and estimate projects we are awarded. This goes back to the previous section of building strong relationships. The stronger your relationships with the people who award the jobs the less you will need to unnecessarily spend time on estimating. Your job as a contractor before you ever estimate a project is to identify if you need to estimate the project and to what degree and depth you need to estimate the project. You should consider factors such as your likelihood of winning the job, your ability to execute the work, the lead times required, your relationship with the project owner, if you are bidding under a bid or bidding new work, and other factors.
The most important factor for estimating a job is your likelihood to win the job and be able to execute it well. If you do not think you will win it by a longshot or it has no significance in developing a relationship, then put a round (approximate) figure on it so that you don’t waste your time. If a job seems worth it for you to estimate, then consider what level of detail you need to estimate to. The art of estimating is figuring out how granular and precise you need to be. Generally the further out a project is the less precise you can be. By the time you start the project you have to be extremely precise and able to hone in on specific details.
As mentioned above the art of estimating is doing as little work as you can to accurately predict your costs on a job. It is very critical that you understand all the components of your projects in order to estimate properly. If you do not even realize you missed parts of the job, it will be very difficult to estimate. Safety factors help, but ultimately they also might make you lose the job to a more precise competitor. Reach out to the US Frame Factory team for technical help on understand building components. Estimating becomes easier when you:
- Use the correct software
- Are working with up-to-date plans that are well drawn
- When you understand the scope being asked for
- Have good technical knowledge about the subject
- Have experience reading various types of architectural plans, structural plans, and spec books
Work Fewer Jobs That Make More Money
The greatest secret of contracting is that it isn’t the number of jobs you have. It’s how well you can turn work into profit. Framer A’s team may frame $10,000 worth of buildings per week and make $1,000 of profit per week. Framer B’s team may frame $20,000 worth of building per week and make $1,000 of profit as well per week. Framer A’s team has more time to spend at home with their kids and spend estimating high value jobs while Framer B’s team is working 12 hour days. The point of this analogy is that it doesn’t matter how much revenue you make. It matters more how profitable you can be with that revenue. It does some times make sense to increase your revenue without increasing your profit so that you can optimize at a higher revenue; however, you have to be careful about doing jobs that don’t make you money. Ultimately focus on jobs that do make you money. That is the most effective way to run a business or contracting operation.
As contractors we typically want to work larger more routine and repetitive jobs. This enables us to take advantage of the following benefits some of which over lap with the niche point:
- Consistency for your labor crews
- More predictable cashflow
- Forecastable work
- Optimized profits through optimized labor and processes
It seems cliche to say this, but less is more some times in construction. And the contractors that realize this and have the humility to take on less scope will ultimately be more successful in growing their business. Once you have a subset core of happy clients that you deliver to, then you can start to expand your reach and scope. That being said, don’t let good opportunities go by. Look for opportunities that other contractors are not catering too, but at the end of the day you need to evaluate your risk and figure out if you can make good money on your projects.
At the end of the day you are running a business and all business that want to stay in business must make money. It’s a very simple principle. So focus on jobs that make money. We will go over how to estimate jobs more, but in short what you spend on your labor, materials, and overhead MUST be less than what you are being paid. Labor costs are what you pay your crew. Material costs are what you pay to suppliers like US Frame Factory, and overhead costs are costs for your work trucks, tools, insurance, office staff, advertising, and really anything not directly associated with executing on a specific job. Generally a good profit margin in construction will be between 5% and 15%.
Focus on Moving Quickly
One of the most effective ways to be successful as a contractor is to move quickly. If you can pick up the phone quickly, answer questions quickly, close new jobs quickly (without wasting time estimating them), start jobs quickly, and execute jobs quickly people will flock to use your services. Most contractors these days are so overburdened, bogged down, and busy that they fail to move quickly. Moving quickly allows you to be cheaper than others because you and your team can get more done in a short amount of time than others can. Moving quickly opens up opportunities and jobs by your team responding faster than competition. Use resources like our clips and accessories website to ensure you have the small items you need to finish your project on time.
Moving quickly does not mean cutting corners and breaking rules. It means looking for efficiencies to grow your business and cutting down on time waste. This can include:
- Training your crews to be faster
- Hiring more experienced individuals
- Hiring for aptitude and ability instead of experience
- Ensuring you have schedule stability such as materials arriving on time and in the correct order
- Learning how to say no to distracting opportunities that try to pull you away from your niche
One great way to move quickly is to do everything we suggested above: have a niche, have strong relationships with fewer general contractors, learn when and when not to estimate jobs, and work fewer more profitable jobs. Remove your burdens. Focus on speed and profitable success. Moving quickly will allow you to do your profitable jobs faster. Figuring out which jobs you can move quickly with will allow you to collect money faster because the jobs are done. This may all seem obvious to a successful contractor, but it is not obvious to small new contractors who are just starting out. Reach out to our team for more information, we are routing for you and your success!
Conclusion
Thank you for reading our article about winning more jobs. We hope it was very instructive. Please reach out to our team if you have any questions about growing and winning more business. We like working with companies that strive to do things better and more efficiently. We hope that we have joined you on your journey and assisted in some way. Reach out to our sales team for more advice and pricing to help you win your jobs. Learn more about framing fasteners in this YouTube video.