For contractors, there’s few things more important than improving your bottom line. A profitable business can support itself in ways that a struggling business simply cannot. From being able to acquire the best talent to purchasing the latest equipment designed to improve safety on the project site, there’s no end to the benefits that result from a superior bottom line. That said, contractors must be cautious and implement a strategic plan if they want to improve their bottom line without compromising the success of their business.
In this three-part series, the Jacksonville construction lawyers at Cotney Construction Law will discuss seven proven strategies that can help you increase profits and grow your business. Remember, some of the most significant detractors from your bottom line occur behind the scenes in boardrooms where contractor-owner disputes transpire. Don’t let legal disputes and miscommunication affect your bottom line, consult a Jacksonville contractor lawyer who has ample experience fighting on behalf of the industry and understands the subtle money pits that contractors aren’t commonly aware of.
1. Reconsider Your Price Points
If you’re having trouble acquiring new contracts, there’s a strong chance that your pricing isn’t competitive. Low sales are indicative of inflated pricing, and although it may seem counterproductive to lower your prices, generating new business can actually help spur the type of growth necessary to build your reputation and bolster your portfolio. Once a business has established itself as an authority, it can back up its pricing with real results that encourage owners to dish out a little extra for first-class service and top-tier quality. On the other hand, if your business is generating a substantial amount of business but your earnings are lackluster, it might be time to increase your prices. Even a minor pricing increase can lead to an improved bottom line, and if you’ve worked hard to cultivate good relationships with owners, there’s a good chance that they won’t mind.
2. Eliminate Superfluous Expenses
Regardless of your industry, it’s always important to eliminate any unnecessary or overblown expenses, but this is doubly important in the construction industry, where operational costs greatly exceed that of most other industries. When you fail to reassess your expenses, your bottom line suffers. Some examples include failing to renegotiate material expenses, keeping problematic or subpar workers on your payroll, making frivolous purchases, and stocking up on limited-use inventory. When you take a step back and examine your expenses, you may find that you’re spending more money than you expected on things that don’t have a positive effect on your bottom line.
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.