Choices

In business, we need to choose which clients we really want, and your choices will likely (hopefully) be different than the others. If you have foresight and good luck, your choices will match your passions and market trends. Then you hit the jackpot. (For years, contractors concerned about environmental sustainability worked in something of a wilderness, but a few persevered, achieved some success, and then achieved a breakthrough when the market caught up with their passion.)

What if your choices and passions fail to match the market? Do you compromise to find enough business to survive, or do you hold true to your values and priorities, and focus intensely and exclusively on what you really want to do? This is a good question.

These days, with the Internet and ability to find small niches over wide areas geographically, you may find you can create a viable business even though it may appear to be a minority interest. Design your plan, develop your scope and look far afield for the few people or organizations interested in your service -- you'll enjoy the experience and build a profitable business.

This of course is harder if your focus is local. The smaller the area geographically you wish to serve the wider your choices and the more you need to compromise your interests. Of course, if your interest is to serve a very small geographical area, you can do just that -- by becoming your community's resource source for referrals and information, you will relate to the much wider world of highly specialized participants.

The point here is simple: If you think you must compromise to make a living, you may be narrowing your choices more than you need. Think wide-angle and specialized, or narrow, and generalist, and you may find a much larger and more influential (and enjoyable) business than you might otherwise expect.

Getting started

Construction at the University of Central Florida in Orlando appears to have a a bright future with rising enrollment, even in the current housing slump. This image is of the new recreational centre under construction. Trouble is, for local contractors seeking work, is that price competition is intense and brutal.

Here is another question received in response to: "What is your number one construction marketing concern?"

Q. We are a young company and have just really gotten started in the last four months (we’ve existed on paper for two years). Our focus is commercial construction, specifically retail construction in Central Florida. Our largest challenge is getting clients and jobs. The jobs we learn of are generally from reporting agencies like McGraw Hill, Construction Data, etc, so we always have a fair amount of competition when submitting a bid. It’s a rough in the hard bid world. Any ideas?

We’ve been trying to grow relationships with one on one office visits, lunches, and cold calls with prospective clients too. We’ve had some success with this approach, but we just can’t seem land jobs with such heavy price competition. How do we overcome this?

Clearly, when you are responding to public projects, openly advertised (and available to the commercial leads services), you are going to be facing intense price competition -- especially in a depressed market. The problem is that the only way around the price competition is either exceptional specialization or exceptional branding, or both -- and the branding I am talking about is reputational, not superficial.

You know you have achieved success when clients call you back for more, and/or refer colleagues to you. So the first place I would go looking for business is among people you really know and who truly respect you from previous projects, perhaps at your former employers (however of course you must not do this if you would violate contractural agreements or the like).

Another approach to consider is to define your niche -- you must be quite specific here -- and then look at ways you can focus your marketing message upstream within that niche. Say, you are confident you can build schools well -- you would want to join the relevant associations/chapters for your sector. The wider and bigger the sector/market, the less this approach will 'work' simply because your entrenched competitors are likely to already be there.

This gets into the Unique Selling Proposition concept of marketing. If you are not number one (or number two) in your segment, you are not going to command attention -- so, again, you will be among the crowd bidding work on price! If you really are first in the space, you can 'own' it. In business, an excessively narrow niche may not be viable to support your entire enterprise, but it may give you some power and identification and draw out useful business.

In other words, from a marketing perspective, if you cannot draw on your existing relationships/reputation, you will need to dare to be different, to be focused, and to specialize in a visibly unique area -- and then you can command higher prices, which will be augmented as your reputation grows. Remember, your unique area can be geographically defined, by sector or specialization, or by something else. It simply has to be unique and relevant to your business (and your potential clients' real interests and emotions.)

Success, again, is in your current client relations
I'm travelling today and tomorrow -- today I visited a successful general contractor in a relatively rural area of Southwestern Ontario; then travelled to a resort north of Toronto to attend part of the Ready Mixed Contractors Association of Ontario convention. Research and writing for these events will consume my energies for the next couple of days, so blogging will be lighter than normal (at least until Sunday).
But I want to share with you right now the powerful impressions I received at that general contractor -- where they are ready to take risks and expand their knowledge in areas of specialized expertise, but where they thrive because of their solid and natural client relationships.
When you work out in a relatively rural area, and want to do most of your business within a 100km radius of your office, you are not going to thrive by specializing in a narrow type of business niche -- you need to be a 'generalist' within your geography. And this means doing stuff that is often done by specialists; like water treatment plants, multi-story condo buildings, hospitals, and the like.
Now this diversification of course contains the seeds of both risk and opportunity -- risk in getting over your head in areas where you don't have competence; and opportunity, because you become relatively immune from market downturns because even in the most difficult times at least some of your knowledge/services will be in demand.
But how can you manage the risks effectively? Great relationships, is the answer.
For example, your project superintendent is so well liked on a conventional low-bid-wins-the-job project that the client, to avoid having to work with anyone else, accepts your proposal for a design-bid initiative.
Then your client has a job that requires expertise not in your normal range of skills. But you have an inside track; you can explain frankly to your client how you will overcome your lack of previous experience, and assure the client that if anything snags along the way, you will fix it. Your client trusts you, and gives the go-ahead.
So, next problem, you really don't know much about the specialized function. But you've conducted yourself properly previously with designers, architects, engineers, and consultants. Would they be willing to help guide you through the first job -- which, as it progresses, you can co-ordinate with your own understanding of the contracting business?
In other words, by really treating your clients right, you will understand the single most construction industry marketing lesson you can learn here or anywhere else. Great relationships, really incredible service, absolute integrity, and true sensitivity to the needs of your current clients will give you the edge in jobs and projects that, in a purely hard-ball environment, you wouldn't have a chance in a million to win.
And so the rural contractor grows at a comfortable, planned rate, year after year, and 'markets' through respect and integrity.
P.S. To write my story, I asked for testimonials. Within two minutes, the administrative assistant had brought out an inch-thick stack. This company has obviously earned its clients' respect -- and also knows that it is important to ask for testimonials when the job is well done.