How to Increase Construction Business Profits Part 2
Working in construction can be challenging for a range of reasons. Remaining profitable can be one of those challenges for reasons within and beyond your control. As Miami construction lawyers, we know it’s important to ensure you are doing everything in your power to sustain your business. Increasing your prices, bidding well, and recruiting qualified subcontractors to work on your projects are proven ways to keep your profits stable. Read part one for the first set of tips.
Know Your Worth and Increase Your Pricing
This tip piggybacks off the previous. Once you have established your business and built some credibility, rethink your pricing. As an experienced general contractor or subcontractor you have managed plenty of projects well, are great at meeting deadlines, have a great rapport with customers, and have specialized skills which means you can command higher margins.
A reputable Miami construction lawyer will admonish you to avoid bidding low on projects. Low bidding leads to cuts in other areas including lower quality work, less project supervision, increased change orders, and potential disputes. This is why you must resist the urge to cut your bid and find other ways to reduce prices. There are other ways to set yourself apart from the competition including searching for jobs with high barriers to entry to submit a proposal to, which will get you on a shorter bid list with less competition. Additionally, specializing gives you an advantage over your competition.
Recruit Highly-Qualified Subcontractors
Partner with highly-qualified subcontractors that are licensed, priced at or above market, and are financially stable. Unqualified subcontractors may save you money, but they can also cost you in the long run. This can take place in the form of low quality work and poor project management which ultimately leads to extra work and delays.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.