Building a Multi-Million Dollar Construction Business: The Ultimate Guide For Contractors
[Music] we all know someone or have at least heard stories about the owner of an equipment or contracting business who's generating a million dollars a year and sometimes more what are they doing that others aren't how do they do it you ask yourself what do they have that i don't what's their secret it can't be just hard work can it we know a lot of you out there are hustling and most likely working for someone else doing landscape roofing painting maybe you're operating a piece of equipment and you like doing it which is great maybe some of you even have your own business well if so we tip our hat to you but what about those of you who want to run your own show what about those of you who just don't want to operate a mini excavator in a backyard but want to run a whole fleet of them we know who you are we want to help you so here it is our everything you need to know guide for building your very own construction business a business that makes you a lot of money and keep in mind we're not just going to go over the basics of starting a business we want to share our experience and ideas on how to do it right how to do it for those of you who want to make some real money and not just get by like everyone else in this video we're going to cover everything including the different types of businesses management techniques your business plan lead generation expansion and much more why listen to us well i guess you don't have to you can thumbs down the video and walk away but we hope you'll give us a chance we're not just speaking from a collective 50 plus years of experience in the heavy equipment industry we've also consulted with many clients as well so collectively there's probably 250 plus years of experience right here in this video so that being said this video is for those of you who aren't messing around for those of you who really want to build a multi-million dollar construction business if you want to help us out all we ask is that you subscribe to our channel and thumbs up this video if you like what you see thank you why do construction businesses fail the secret is there's no secret does the solution always seem so obvious when you hear it well if that's the case then why are there so few construction businesses grossing a million dollars a year we've put a lot of man-hours into this video to bring you the exact information you need to start and operate the business but this information is useless without work on your end how much of the success in the construction industry is hard work financing knowledge experience the right equipment the right strategy well when it comes to running a business right it's all of the above this is a guide for people who are sincerely ready to get their hands dirty so that's our disclaimer now let's get to work construction products and services first and foremost what do you have to offer what products or services do you have to offer better yet what problem are you able to solve the number one lesson for making money is this if you can solve a problem for someone else believe me they will pay you for it so for those of you who are already confident about your skills and experience you're ready to move forward for those of you who aren't we recommend you take some time to sincerely and carefully consider what you want to do because when the road gets tough you better care and we mean really care about what you're doing because we all know work is like pulling teeth when you're not feeling it if you're interested here's some of our favorite ideas for profitable businesses some of which can be started with very little startup funds landscaping sealcoating tree removal demolition equipment and material hauling cement manufacturing roofing welding snow plowing and a quick side tip you can always rent out any equipment that you're not currently using types of businesses the next thing to consider is will your business be an individual partnership or franchise individual well you can certainly choose to build your multi-million dollar construction business on your own the obvious advantage is you get to call all the shots the downside is you call all the shots we believe that fortune favors the bold heck we created e and c on our own with no financial backers but we need to warn you running a business on your own is not for the faint of heart when it comes to your capabilities what you can and can't do you need to sit down and get honest with yourself even a few yelp reviews is enough to sink a ship these days and when it comes to running a business on your own you can find some overwhelming statistics about how most businesses fail in the first year to intimidate you but we're here to rather encourage you work your butt off and you'll be just fine partnership there's nothing wrong with sharing the load there's certainly advantages to working with a partner sharing tasks splitting the financial obligations being at two locations at the same time or even just handling bad days together but you better know who you're dealing with we've all heard the stories and seen the blow ups on job sites and it's not pretty especially when it's two friends going at it so we implore you do your homework ask questions as many as you can and don't be shy get everything on the table in the beginning sit down and thoroughly discuss goals expectations pet peeves experience strengths weaknesses everything so are you thinking of going into business with your spouse well that's a video for another time franchise although this arrangement isn't ideal for everyone we know plenty of clients and friends who've taken the franchise route and they're happy they did put simply a franchise is the ride or license granted by a company which is the franchisor to an individual the franchisee to market and or trade products and services so once a franchise is purchased the franchisee that you must comply with what are typically strict guidelines and rules in order to maintain brand consistency as well as the initial franchise fee a franchisee will normally pay regular royalty to the franchisor in exchange for training support and marketing assistance now the agreement is governed by a contract and the franchisee is tied into a partnership arrangement for a defined period of time usually ranging from 5 to 20 years here's an example from a major heavy equipment supplier who offers franchise opportunities the capital required to open a unit is 750 000 the franchise expects its new franchisees to have a net worth of at least 1.5 million dollars the low end of the total investment required to open a new franchise 3.544 million dollars the high end of the total investment to open a franchise 8.241 million whether you go out on your own form a partnership or take advantage of a franchise opportunity none of this matters if you don't know how to land customers obtaining customers if you build it they will come well it may have worked for good old kevin costner but we wouldn't recommend this as the foundation of your business strategy remember this is a video as to how to create a multi-million dollar construction business so we're giving it to you straight getting customers takes hard work and relentlessness and there are no exceptions as mark cuban says work like there is someone working 24 hours a day to take it away from your competitors are out there believe me and they're not playing games some of the following tips may seem obvious but you'd be surprised how most construction businesses can't seem to get these simple but crucial fundamentals done right we've noted what we feel is most important for each the business name you can always use your last name heck it worked great for john deere but with the contracting industry being so over saturated we recommend you come up with a clever original name that potential customers will not forget the logo similar to the business name you might want a logo that's eye-catching and easy to remember that being said your logo should be simple in the case of a logo less is always more business cards they're not in fashion like they used to be but you can't beat tangible especially with the old school guys you're better off carrying a card or two and rarely being asked for one instead of being asked for one and never having it available the website you'll be surprised how many contractors and equipment suppliers have websites that are dismal occasionally we still bump into businesses who don't even have a website when it comes to a website we want to emphasize no excuses on this one this is typically the first thing your prospects will see do it right these days solid web developers are a dime a dozen so there's no slacking on this one social media we know everybody's not crazy about social media and some businesses might be able to get by without it but how many multi-million dollar businesses do you see out there who are not utilizing instagram or linkedin the most important thing to remember about social media is consistency the general rule of thumb is to post three to four times a week and like web developers there's plenty of reliable social media managers out there so go find one and get posting content marketing content marketing is a form of marketing focused on creating publishing and distributing content for a targeted audience online in short it's storytelling examples include a blog article or a photo on social media content marketing has to be the most underrated form of marketing out there we know this because it's our bread and butter we like it so much because anyone can do it even with a low budget even those of you who can't write or take a decent photo can easily hire a freelancer online to help if you want a multi-million dollar business there's no excuses on this one you have to be cranking out content every week photo and video these days photo and we would also argue video are essential if a photo's worth a thousand words how much is a video worth we know some of you can't afford a regular photographer or videographer but what about learning and doing it yourself that's how a multi-million dollar business owner thinks nice work reviews 72 percent of customers say that a positive review makes them trust a business more and we have to agree a lot of our clients tell us that they have trouble getting their sales team to remember and ask for reviews in our humble opinion this is killing reviews not only make your business more visible on search engines and apps as well as make you appear trustworthy but they are a great open-end conversation starter some of our clients have told us that new customers start phone calls off discussing a review they read on google or yelp again these tips may have seemed trivial but go check out your competitors and take an honest look at how your business compares lead generation moving forward let's talk a little about lead generation we know this might intimidate some of you but remember this guide is to help you create a multi-million dollar business not scrape by so don't underestimate the power of acquiring leads are you not sure where to start well for the larger contracting projects we recommend bid clerk construction bid source construction wire and government bids for smaller projects we recommend thumbtack facebook marketplace and craigslist it's worth taking the time to thoroughly research every one of these until you find the ones that suit you and your business best managing your multi-million dollar construction business when it comes to reaching that first cool million we can assure you it's not going to happen without proper management of your business and a pivotal component of this is project management it's okay to start with spreadsheets but as your business grows solid construction management software will help keep you on top of projects without mishaps mishaps that may not only cost you money but poor reviews as well [Music] specialization and market niches there are advantages to specializing in one sector of the construction industry first and foremost why waste your valuable time and budget on jobs you are not interested in focus on projects that you and your team are passionate about and it makes the work process enjoyable and it boosts morale secondly it's one way to differentiate yourself from the competition if that's what you want of course if you call yourself an excavation contractor with demolition listed on the services section of your website but you're not interested in demo jobs then why bother why spend the marketing dollars to unnecessarily compete with someone else on that note focusing on a particular niche is one way to save on marketing cost most but not all of the time a while back one of our hauling clients had developed a market niche naturally and unexpectedly transporting and installing tiny homes now sometimes you do a project for a client they let other people know about it and then more and more people need your service and it turns out you tapped into a high demand niche if this is the case be sure to capitalize on it quickly you want to expand your reputation before competitors start offering the same product or service your construction company's business plan over the years we've known a handful of guys and a gal who've successfully built their contracting business without a proper business plan but we've heard far more stories with unhappy endings for that reason we wouldn't recommend shooting from the hip the most common pitfall we hear about is going over budget and this is usually caused from these unforeseen yet inevitable overhead costs marketing supplies and materials equipment labor onsite facilities and legal services the small business administration or sba is an excellent source of information for creating a business plan and it will cover everything you need to know including the executive summary financial projections market analysis and more professional help for those of you who aren't aware construction work leaves you open to many different types of liability including lawsuits rental equipment damage fire lightning and flood vandalism and theft injuries and much more for that reason we can't recommend attorneys accountants and insurance agents enough these days they can easily be found on upwork.com and for affordable prices too
legal the method in which you set up your business matters from both a legal and tax perspective for example you may choose to go into business with a partner what should happen to that business if one of you is injured or passes away and this is just one example of why an attorney is needed believe me a good lawyer will help you sleep at night insurance an insurance agent he'll also help you sleep at night they can assist you with getting the appropriate policies needed to protect both you and your assets like we mentioned a minute ago by running a construction business you are open to all sorts of potential liability issues most of which are inevitable and there's no escaping them accounting oh yes a diligent accountant will also help you sleep better at night here at enc we live by two cardinal rules never disrespect a woman and never mess with the irs the last thing you need is to be audited so make sure you choose an accountant that you trust considering that you'll be spending the majority of your time on a job site and managing employees you'll need an accountant who's regularly keeping track of profits and losses and taking advantage of every tax deduction as well here's some examples of tax deductions for contractors car and truck expense advertising payment to your independent contractors legal services vehicles machinery and equipment and travel expansion when it comes to scaling your business it's not a matter of when you should or shouldn't but if expansion isn't executed at the right time you make yourself vulnerable to spreading yourself too thin which could cost you it might even cost your business if you're not careful so here's some indications it might be the right time for expansion your customers demand it asking for more projects and or more locations you have too much business and you can afford to expand your team your profits are steady for multiple years and you can risk extra growth your niche is growing and there's a high demand for the services or products that you're offering learning from competitors one thing we've noticed from talking to hundreds if not thousands of contractors over the years is that the natural tendency is for business owners to avoid the competition as much as possible however the majority of successful business owners we speak to appear to know a great deal about their competitors maybe even more than the competitor knows about themselves like the godfather said keep your friends close and your enemies closer heck why not pick up the phone or email other companies and simply ask them what you'd like to know a lot of the time you'll find people love to talk about themselves and have no issue chatting or letting you buy them a drink we have a client who while starting a paving business in florida reached out via linkedin to a paving business owner in california who didn't see our client as a threat and was more than happy to share his experiences in the trade the ideal scenario is to find a competitor who has recently retired or sold their business here's some questions you might want to ask how long did it take you to meet your goals were there any unexpected pitfalls that i should know about what do you wish you had known before you got started do you have any suggestions on managing an equipment fleet how about managing employees [Music] luck what about luck we know some of you are thinking but what about that one guy who got lucky he was at the right place at the right time all that we have to say about luck is this luck is what happens when preparation meets opportunity isn't it funny how the hardest workers seem to be the luckiest back in 2004 when hurricane frances and gene devastated south florida one of our clients had lost his job bad luck right wrong what this young man did was buy a few cheap pieces of equipment gather up a few of his buddies and started a debris removal business that year he literally went from making 33 000 a year to making over a million dollars in profit so with that being said we recommend you keep your head down and work play the game don't stare at the scoreboard rainy days bad days are inevitable maybe it's the weather it's an injury and argument a broken-down equipment delayed materials heck maybe it's a coup d'etat who knows but be ready for it i know it's hard but we need to remain disciplined and set aside money each month towards that rainy day fund or at the very least have a really good credit score and a credit card however approach that path with extreme caution because credit card debt has been known to take down even some of the largest businesses hubris pride goeth before destruction and a haughty spirit before a fall that's from the king james version the book of proverbs 16 18. for those of you who are unfamiliar with the term hubris it is excessive pride or self-confidence and the results can be biblical you'll eventually find that earning business and money is only half the battle keeping it is the key to having a multi-million dollar construction business we've all heard the stories so and so just sold his truck he's laid off eight employees he just filed bankruptcy it can happen to anybody be smart with your earnings you can't be too careful [Music] burnout unfortunately we've heard all those stories too breakdowns heart attacks drug addiction divorce they're real and they do happen i think we all know someone who fits into at least one of those categories what good is all that money if you have high blood pressure a poor relationship with your kids and your spouse is angry with you your employees don't respect you or you're just generally miserable in our opinion a lot of success in the business is just getting back up when you fall down and keeping your nose clean and on that note keep it legal we don't know a single contractor or equipment supplier who's built a million dollar business without taking the law seriously and the ones we did know who broke the law whether it was small or a large crime every single one eventually paid the price we'll spare you the shortcuts make long delays speech but if you're going to build your business right respect the law and utilize attorneys whenever necessary and like we said before you can't be too careful when it comes to projects there should be a written contract signed by all parties before any work begins and you should always ensure that all subcontractors are licensed final thoughts the most important question you must ask yourself what will you do when it gets tough the why is going to really matter when the chips are down what is your why in other words what's going to motivate you to get up at 4 o'clock in the morning or when an employee quits in the middle of a project or when a project falls through and you're already late to pay creditors maybe your why is to provide for your family and give your kids the life you always wanted or maybe it's to buy a new truck or a new boat heck maybe you just like the competition aspect or it's a combination all the above you can answer that only for yourself and we've addressed as much as we possibly could in this video and with that being said we recommend you watch our construction quickie video series to master more of these fundamentals the video series covers just about everything you need to know pertaining to heavy equipment on a final note we're happy to offer any more help that we can so don't be shy comment down below with your specific questions and we'll do our best to help and also be sure to thumbs up the video if you found it helpful we really appreciate the support [Music]
2021-09-22 19:54
