Not every potential client is a good and profitable customer. Let’s get that out of the way now. Being selective on who a contractor works with and the type of jobs they decide to do, will set up their firm for long-term success. Filtering out the jobs that lead to profitability is the first, and most important step, in onboarding a client.
Read the rest of the post below or listen in Podcast form:
Selecting and onboarding a client is one of the most crucial decisions for a contractor
Choosing the right jobs can increase profitability, not only related to that job, but in relation to keeping employees and subcontractors happy, growing your referral network, and by becoming more efficient as a business. On the flip side, the wrong job can suck all of the time, resources, and profitability from a contractor. Contractors should always put their client’s needs first, as long as they are reasonable and don’t setback the contractor to a spot that they will have trouble recovering from.
Setting realistic expectations
When meeting with a client to discuss a project for the first time, there are many things for a contractor to consider, such as; the scope of work, time commitment, estimated budget for their potential customer, expected actual price, current plans or blueprints in place, and more. When they figure out the aforementioned details, it helps set realistic expectations for the homeowner, and also allows the contractor to figure out logical next steps. The more experience a contractor gets, the quicker they will be at deciphering whether the lead is potentially profitable, or not.
If a detailed estimate is required
One of the most common first steps is deciding whether to put together a basic estimate, which lays out the rough costs for the planned scope of work, or a very detailed estimate. A detailed estimate includes actual bids from subcontractors, and is priced out down to the nails. This is a tough decision for the contractor, and oftentimes needs to be based on their feel for how serious the homeowner is about getting the project done. If a detailed estimate is required, a contractor will need to discuss initial pricing, including putting together the estimate, with the homeowner.
The problem with not charging or discussing pricing for a detailed estimate
A common misstep for contractor’s is not charging or discussing pricing for a detailed estimate, which oftentimes takes 4-8 hours to put together. One solution is to have a price for the estimate due if the homeowner chooses another route, or it’s rolled into the final cost if the contractor is selected for the work.
Ultimately, though, it comes down to leads
If you have a lot of options, you can be more selective in the type of jobs you want to move forward with. You can decide how much time and resources you can allocate to each job, and the length of projects you want to take on. You can also be selective on which customers you work with, which will allow you to onboard more clients that align with your company and brand. Whether you work with a lead-generating company, or your work off referrals, you will want to get as many quality leads as you can, to allow for the ability to be selective.