You can be on Entrepreneur’s cover!

15 Tips for Growing a Long-Lasting Contractor Business Reliably providing an essential service is a good way to grow a business you will be proud of.

By John Rampton

entrepreneur daily

Opinions expressed by Entrepreneur contributors are their own.


Freelance contractors are a major contributor to the economy because they're absolutely a necessity. Without them you can be certain that homes and offices would literally fall apart.

Related: How the IRS Classifies Independent Contractors

The result is that starting your own contracting business can be lucrative.

But, before you get too far involved, here are 15 ways that you can build a contracting business that's going to last or grow the contracting business you already own.

1. Operate with best business practices.

One of the most common problems that contractors run into when they to attempt to improve efficiency and grow their business is agreeing on what's considered the industry's best practices. After all, they already have some sort of system in place that they're familiar with and believe is working just fine.

To put an end to this debate, you can use whatever system you prefer to handle everything from bookkeeping, scheduling and invoicing, to training and task management, as long as that system contains basic knowledge of the task and helps each employee by providing step-by-step instructions for each employee.

When you have an effective system in place. it allows you to not only maintain your current level success but also helps you be prepared to scale properly when it's time to grow.

2. Assess your internal organization.

After settling on a system that uses the best practices, you next want to conduct a comprehensive assessment of your company. This includes asking questions like;

  • Is your business stable financially?
  • Are you getting repeat sales?
  • Do you have customer referrals?
  • How do people rate your business and customers service?
  • What is your employee turnover rate?

These questions can be answered by reviewing your books, paying attention to what people are saying about your business online and talking with employees and customers. If there are areas that need improvement, then focus on those areas before you grow your business too much.

For example, if you don't have employees who excel at customer service, and that's your number one complaint from customers, then you may want to consider hiring people who do excel in customer service or can provide proper training for your current staff.

3. Make yourself available.

Speaking of customer service, your prospective customers want to talk to an actual human being and not a robot during normal business hours. I understand that it's asking a lot to have someone handle the phone all day, but if you don't want to lose customers to your competitors, then that's necessary.

One way to get around this is by sending business calls to your cell phone when you're out of the office. Even if you can't get to the phone, you can probably call the customer back faster than waiting to get back to the office.

To avoid any confusion, clearly state your business hours on your business cards, website and social channels, and of course state your physical location. If you close at 5 p.m., then a customer shouldn't be upset that no one is answering the phone at 8 p.m.

I would also recommend that you set up automated email and social media messages during off-hours. A simple message informing customer that their message was received and they'll receive a response within 24 hours should be enough to keep them satisfied.

4. Join an industry association.

Industry associations, such as the Associated General Contractors, aren't just great for networking. They can also help you develop essential business skills, ranging from how much to charge for clients to how to write a contract. They also recommend which products you should use for each type job and where to find sub-trades.

Here's a list of construction associations that you should consider joining.

5. Step up your marketing game.

Successful marketing campaigns aren't just about landing new customers. They're about securing more profitable projects and keeping your current customers happy.

Today, that means having an online presence and interacting with your specific audience through email, social media and blog posts, where you demonstrate how your business solves their problems.

Unlike what strictly online businesses do, though, you should also focus on marketing your business locally. Start by making sure that your address, phone number and hours are available online and easily searchable. After that, network in your community both online and offline by attending chamber of commerce meetings or answering questions in a local newspaper forum. And, don't be afraid to spend a couple of bucks advertising your business on social networks like Facebook.

6. Attract more funding.

If you're like many small-scale contractors, you probably don't have financial pull to support your expansion. Cash-flow struggles due to delayed payments from customers are actually common. This means that it's your responsibility to find various ways of accessing lines of credit, obtaining loans and securing overdraft protection.

Remember: If you want to attract funding, you need to keep detailed and organized records and do your research on the best type of loan for your business based on your current needs.

7. Be flexible.

Even if you're a general contractor, you're probably not an expert in all fields. That's why you provide specific services for your customers. However, when you go above and beyond for a customer, you'll probably earn a lifelong oner. For example, if you're doing electrical work and notice that a pipe has a minor leak that you can easily repair, you can fix the pipe instead of having the customer call a plumber.

8. Find a mentor.

The best thing about a mentor is that he or she can guide you in solving problems. The mentor can teach you how to manage your money and customers, and introduce you to vendors or investors. The reason: The mentor has "been there" already. Sometimes this person can be a family member or retired contractor; other times it may be someone you have to hire.

9. Hire people smarter and more talented than you.

This is your long-term answer to any micromanagement problems that you may have. By hiring people who are smarter and more talented than you are, you can trust them to handle any assignment on their without your supervision. This gives you more time to focus on growing your contractor business. Plus, you'll learn a whole bunch from them along the way.

Related: Should I Hire a Contractor or an Employee?

10. Watch your finances.

Plenty of construction businesses go under because they simply can't cover the costs of their overhead. That means that you have to pay close attention to overhead expenses and be aware of any additional costs before you accept a job. When sending out bids, factor in the costs involved with the project, particularly materials and labor, and give the customer a ballpark estimate.

Another way to handle the cost of your overhead is by creating a budget. This shows you how much money you have coming in and how much is going out. If the amount going out surpasses the amount coming in, then you have to start making some changes by cutting unnecessary expenses and raising your rates.

And, always stay on top of your invoicing.

11. Be unique.

Does your business have a particular specialization or cater to a niche market? Then definitely capitalize on what makes your business different from the others in town. It could simply be your ability to provide services specifically for offices, as opposed to other contractors, who solely focus on residential properties.

However, make sure that you offer a healthy balance of products of services. While niche markets can give you a competitive edge and help make you stand out, they're not always as large as businesses that reach a wide audience..

12. Choose the best customers.

I wouldn't recommend turning away a customer. But the hard truth is that some customers are better than others. Is it really worth chasing down a couple of hundred bucks from a deadbeat customer who only asked for some minor contracting work? Or, would you rather land a major project from a client who pays you upfront?

Always keep in mind that you want customers who deliver a solid ROI, instead of those who give you headaches. To save you this aggravation, learn how to spot these customers before agreeing on a project. For instance, you can ask some of your fellow contractors if they've had any experience with this customer in the past. Other signs of troublesome customers are if they're rude or abusive to you or your staff from the get-go or refuse to give you a down payment.

13. Outsource when needed.

Here are a couple of facts that you need to accept: There are only 24 hours in a day. And you aren't perfect. Once you realize that, you can start outsourcing certain tasks so that you can relieve some stress and focus on growing your business steadily. For example, accounting can be nerve-wracking and time-consuming. So, why not contract out all of your bookkeeping and accounting needs to a freelancer or CPA?

14. Be prepared.

No matter what size your business is, being prepared is what can make or break you. For contractors, however, it's the little things that can determine whether you're going to survive or not. After all, being prepared is the key to efficiency and profitability.

For instance, let's say that you're almost done with a bathroom renovation and find out that you're missing a $5 part you need to finish. That part now can set you back a couple of hundred dollars because you have to overnight it. Even running to the local hardware store costs you time and money. And, you'll probably have to eat that cost because it's not included in the original quote.

You can't plan for every scenario, but always go over your proposal before jumping in, to make sure that you have everything that you need to complete the job.

Related: Small Business Is Using More Contractors

15. Don't be afraid to stay small.

A lot of contractors get stuck in this middle area where they're forced to hire more people because they can't handle the workload, but profits aren't any higher. For many contractors, it's easier for them to stay small. This ensures that they have a positive cash flow since it keeps their expenses low. Staying small also reduces stress since the workload is easier to manage.

John Rampton

Entrepreneur Leadership Network® VIP

Entrepreneur and Connector

John Rampton is an entrepreneur, investor and startup enthusiast. He is the founder of the calendar productivity tool Calendar.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Editor's Pick

Side Hustle

He Took His Side Hustle Full-Time After Being Laid Off From Meta in 2023 — Now He Earns About $200,000 a Year: 'Sweet, Sweet Irony'

When Scott Goodfriend moved from Los Angeles to New York City, he became "obsessed" with the city's culinary offerings — and saw a business opportunity.

Personal Finance

How to Get a Lifetime of Investing Experience in Only One Year

Plus, how day traders can learn a lesson from pilots.


94% of Customers Say a Bad Review Made Them Avoid Buying From a Brand. Try These 4 Techniques to Protect Your Brand Reputation.

Maintaining a good reputation is key for any business today. With so many people's lives and shopping happening online, what is said about a company on the internet can greatly influence its success.


Save on Business Travel with Matt's Flight's Premium, Only $80 for Life

This premium plan features customized flight deal alerts and one-on-one planning with Matt himself.

Science & Technology

Here's One Reason Urban Transportation Won't Look the Same in a Decade

Micro-EVs may very well be the future of city driving. Here's why, and how investors can get ahead of it.


I Got Over 225,000 Views in Just 3 Months With Short-Form Video — Here's Why It's the New Era of Marketing

Thanks to our new short-form video content strategy, we've amassed over 225,000 video views in just three months. Learn how to increase brand awareness through short-form video content.