Want to grow your small renovation business? Check out these typical mistakes firms make when expanding their business to make sure your organisation goes from strength to strength.
Mistake 1: Relying on referrals
There’s no better way to gain new business than when a customer recommends you to a friend. You won’t have had to lay out any marketing costs, and when you work with a client who has been given your name as a referral, an element of trust is often already established from the beginning.
However, be careful not to rely too much on recommendations for growing your business. Not every happy customer has the time or inclination to recommend you to others, so if this avenue dries up you might find yourself with no other leads to follow.
Solution: Take time to explore other ways of finding new business, such as improving your website, marketing your firm on social media and signing up to web communities like Houzz. Even if business is booming, these other channels will pay off in the long run.
Mistake 2: Doing it all yourself
Small business owners often find themselves wearing many hats, juggling projects with all the other tasks of running a firm. You probably don’t think you have the resources to delegate tasks, but in fact this cost saving might actually waste money in the long run.
Solution: If you’re finding yourself spending ages working out your accounts, for example, it might be time to hire a professional and use your time more valuably on tasks that will help your business to grow.
However, Ran Ankory of Scenario Architecture advises: “Its a matter of finding the right balance by asking questions about each and every task that you’re considering to outsource.”
“Why am I considering outsourcing this aspect of my business, is it because it is not what we specialise in, and will it be more efficient and cost effective to collaborate with someone else? Or am I simply avoiding aspects that are not what I love doing and do best, but are essential to developing a new business?”
He also recommends you ask the question: “Must I outsource an entire task, or can I select parts of it which would not compromise my overview as a managing director?”
And finally: “Can I work with the potential company I am considering partnering with to find the correct balance and make sure that the communication and data flow is efficient enough to keep the necessary control mechanisms intact?”
Mistake 3: Keeping your prices too low
Customers are looking for a fair price, but it’s not always a good idea to offer a cheap quotation in order to compete for new clients. If you undercut yourself, by only charging enough to cover your materials and labour costs, you’ll find it difficult to really grow your business.
Solution: Jeff Kasfikis of Big Bean Construction says: “There is no point being cheap if this affects the service provided and the end product. Some clients want the cheapest priced contractor, but also want for them to undertake the full top service and quality. It’s not feasible and that is why you need to issue a tight schedule of works, so accurate comparable pricing can be sought.”
To do a great job you need to be able to hire good contractors and spend time on completing the project to a high standard. Offer your services too cheaply and you won’t be able to afford either of these things. You might end up with unhappy clients, dissatisfied employees and an extremely low profit margin. Instead, look for potential clients who focus on quality and not just finding the lowest price.
Mistake 4: Not employing people
When you’re trying to grow your business there comes a time when you’re faced with the conundrum of whether to employ staff.
Ran Ankory says: “In a small business at least in the beginning, the owner normally tries to be at least three different people at once – the entrepreneur with the large scale vision and drive; the manager who keeps it all organised and running smoothly; and the technician who is doing the actual work that the business is set up to do.”
Solution: So when is the right time to get help with one of these roles? After all, by adding the wages of just one person you’ll have two people to support and therefore have to double your revenue. But if you don’t employ staff you won’t be able to take on extra work in order to grow.
Bridge the gap by taking on an apprentice who will grow with your business, or use subcontractors as a stop gap until you have enough work to pay an extra person’s salary. If you’re worried about the administration involved in paying someone’s salary, you could delegate this task to an accountant or bookkeeper.
Mistake 5: Failing to give a quotation
It can be frustrating for homeowners when a renovation specialist doesn’t give an estimate for work they’ve enquired about. So if you want your business to stand out, it makes sense to be one of the firms who does takes the trouble to offer a quotation.
Solution: Even if you’re too busy and don’t need the work, it will pay off in the long run to give potential clients a quote. They’ll appreciate that you’ve made the effort, which will set you in good stead for any later projects.
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