0383: 8 Common Challenges New Construction Business Owners Face

This Podcast Is Episode Number 0383, And It's About 8 Common Challenges New Construction Business Owners Face Freelancers in all industries deal with the same problems due to the nature of their work. Most of you came from the skilled craftsman trades, some of you worked as a manager for a construction company.   Practically,  solo contractors manage every aspect of their business. For that, you have made an important decision to own and operate a construction company.    If you're thinking of dropping your career as an employee to start your own company, consider the following obstacles you will need to navigate. Unfortunately, problems beget more problems, and a shaky foundation quickly leads to a crumbly business and many regrets about starting in the first place.   1. Bad customers Customers who demand too much work for too little pay, clients who do not pay on time, and especially those who do not pay define our expectations for the next client. New contractors often do not know how to tell the difference between a good client and a bad client until after the contract has been signed. Or worse, a contract is never signed, and the contractor accidentally does work for free, much to the delight of the shady client. 2. Bad pricing Pricing that is too low attracts wrong customers like flies to a dead horse. The outrageously low price signals that the contractor who made this bid or asked for this rate has no idea what they are doing and does not value their work; that they are new and can be taken advantage of. If you price your work reasonably, you are much more likely to attract reasonable clients. 3. An unprofessional website Too many contractors have websites that look like they were built in the late 1990s. It's essential to create a user-friendly website that clients will find aesthetically pleasing, whether you made it yourself or hired a web designer.  A professional website signals that you take your work seriously and demand to be treated with respect. A clear photo somewhere on your homepage also helps your client see that yes, you are human, and no, you are not likely to be okay with doing work for free. 4. The lack of experience This is a tough one. Of course, if you have just started in the world of being your own boss, you don't have much operational experience. Cutting laminate, installing pipes, or repairing the electrical system is a trade skill. It certainly took a lot of knowledge and expertise to hone your craft. Creating proposals and pricing a job is a business skill. Fortunately, it's very similar to when you got your first job. Apply for smaller, lesser-paying employment and work your way up to well-paying projects. It is typically easier with contracting to attain higher-level jobs than if you were, say, working in retail. A contractor with an extensive portfolio on their professional website is very likely to be trusted for larger projects. 5. A shortage of initiative and drive New contractors start with seemingly inexhaustible enthusiasm and as much passion as you could find in a young and overly optimistic entrepreneur. Like the effect of caffeine in the morning, this wears off before much work has been accomplished. Then the initiated contractor hits an unexpected snag or feels overwhelmed with the amount of work to be done and wonders why they ever started in the first place. A sense of drive and ambition need to overcome all obstacles to succeed. As a self-employed business owner, a contractor has no boss spurring them on. Since many lack self-discipline and an intrinsic sense of motivation, freelancing is undoubtedly not for everybody. 6. Persistent feelings of inadequacy OR a tendency to blame others for perceived failures Failings of motivation usually stem from feelings of inadequacy, and lack of initiative comes from a tendency to shift responsibilities. If an independent worker suffers from low self-esteem, where will the confidence go into the market themselves and negotiate project costs effectively? It's also easy for a contractor to blame the scarcity of good clients than take responsibility for the fact that their market strategy is failing. 7. Not researching enough Sometimes these personal failings could be fixed through simple research. Knowing what other contractors have done in similar situations increases confidence in making business decisions. Minor successes that result from positive business decisions and overcoming obstacles build motivation. Research on business matters affects mood and level of dedication to making it as a contractor and is therefore crucial to the beginning of any contracting endeavor. 8. Not understanding freelance work Many aspiring to self-employment do not have any idea what freelancing entails. Contracting services to homeowners or individuals require lots of time and effort to earn a profit immediately. Employees tired of their own work lives idealize those of business owners and often ignore the difficulties faced in this environment. Before counting on notions of optimal freelancing experience, consider your own life, strengths, and abilities. Ask yourself these questions: "Am I truly ready to begin a long-term career in contractor work?" and "What do I want to achieve through my contracting business?"  In conclusion If you are currently a new struggling self-employed contractor, tackling these problems from the bottom up streamlines the path to success. If you ever become discouraged, remember that everyone starts at the beginning and that you can achieve your desired level of success if you put in the work to attain it.  Profitable Contractors and Construction Company Owners know the value of construction bookkeeping and accounting. We are here to help you a little or a lot, depending on your needs. Good luck on your new adventure! P.S. Use coupon code LABORDAY30 for 30% OFF our QuickBooks Setup And Chart Of Accounts Templates in our Fast Easy Accounting Store and online courses at Construction Accounting Academy. Valid until Wednesday, September 9th, 11:59 PM. About The Author: Sharie DeHart, QPA is the co-founder of Business Consulting And Accounting in Lynnwood, Washington. She is the leading expert in managing outsourced construction bookkeeping and accounting services companies and cash management accounting for small construction companies across the USA. She encourages Contractors and Construction Company Owners to stay current on their tax obligations and offers insights on how to manage the remaining cash flow to operate and grow their construction company sales and profits so they can put more money in the bank. Call 1-800-361-1770 or [email protected]