Why do contractors fail?
It’s a difficult world out there if certain things aren’t in order.
Someone recently asked this in a Roofing group I’m a part of – and some answers were really good.
Table of Contents
Here are some of the themes:
- Not able to predict labor costs and true profits.
- They don’t have the structure in order to service their existing customer base
- Don’t pay back vendors and pocket the money then they’re upside down
- They don’t grind
- Greed & Arrogance
- Biting off more then they can chew
“96% of Home Improvement companies fail in the first five years”
“There is actual data that 50% of Home Improvement Companies fail in their first year
And 96% fail in the first five years
You can’t just do the “get three quotes and whoever is in the middle, go with them” because if you want to check out three companies that have been around 5 years or more, you’d have to research 75 companies.
If you find a company that’s been around a long time, it’s the best chance to get the backing of Service and Warranty because so many fall off the grid.”
Justin James Grabko
“Not living up to sales reputation.”
“Not living up to sales reputation. Salesmen sale top notch but then expect the labor to do the work without proper equipment. Sell only what you can deliver even down to your laborer. If he cant keep the site clean your not top notch.
I am saying it is everyone part from upper management sales operations to the laborer.
You can have the best salesman in the world but if operation don’t hold to sales you fail.
You could have the best operation in the world but if you cant sale you fail. You can have great sales and operation but if your laborer leaves every job dirty you fail. It is that balance that makes you are breaks you. A good sales operation with good operation and good labor will out last anyone who is best at one thing.”
“Cash flow, can’t control their subs or crews too.”
“Cash flow, can’t control their subs or crews too. Also, sometimes not getting paid in the end or bad workmanship, not meeting deadlines on jobs. Mortgage companies will drain a company too, delaying funds.”