How To Make Money As A Contractor: Contractor Business Tips

how to make money as a contractor

Most contractors don’t make the kind of money they want to make. Maybe you have a few jobs under your belt and you feel pretty good, but at some point, you wake up and realize that the money just isn’t coming in. At least, not as much as you would have hoped. So, I’m going to discuss a few of the best tips to help you learn how to make money as a contractor based on my years of experience in the industry. Let’s get started.

Here’s How To Make Money As A Contractor

1. Take Control Of Your Sales Process

Let’s say you have 100 different prospects asking for bids from you. Not a bad position to be in — if you have control of your sales process. If not, you’re going to be running around trying to adjust to everyone else’s processes, wasting time, and losing out on jobs because you just can’t keep up. 

Taking control could mean slowing things down a bit. Get on the phone with people and have an honest conversation about their projects, needs, and budget. Because if you take the time to talk with people on your terms, while also trying to understand what they need, you’re more likely to close the sale. Otherwise, you’ll get burned out trying to answer every single bid request as quickly as possible (i.e. on other people’s terms), just to have a lot of people tell you “Well let me think about it.” This one simple step could save you upwards of 50% of your estimating time, which is time you can put toward building your business — rather than chasing down bad leads. 

2. Know What Your Costs Are

I was talking with a buddy of mine who was helping out a new contractor. The contractor was excited that he had just sold a patio job for $3,000, but when my buddy sat down with him and did the math, they realized that it was gonna cost the guy $4,500 to get the job done. If you don’t know your costs before you name your price, not only could you make a much smaller profit, but you could end up doing a job at a loss. 

Let’s say you’ve got employeesyou got builders working at $15 per hour and the job is going to take 100 man hours — that’s $1,500 in labor right there. Plus any other labor involved, let’s call it an even $2,000. So you pay out $2,000 for labor, then you’ve gotta write a check to your material suppliers, vendors, and so on. Before you know it, the cost of the job is up to 5, 6, or 7 grand (or more). That’s just what you are paying to do the work. 

So with your next build, do this: figure out what it’s going to cost you, double the figure, and sell the job at no less than that. When you use that simple formula, you basically guarantee yourself 50% gross profit, and gross profit is the key to having money in the bank. 

3. Raise Up Other Leaders

You are just one person. You can only do so much in a day. The best thing you can do is take the things you know and teach them to someone else. Then, give them enough of a leash that they can go and implement your plan and your ideas on your behalf. It may be a pain in the ass sometimes, it may even cost you money at times, but raising up others and delegating tasks are the only ways you’re gonna be able to scale your business. 

You also need to incentivize these people to take on new responsibilities. I use what I call a “Mastery Ladder.” If you want to move up the ladder from being an apprentice, then you need to learn certain skills and take on certain responsibilities. Give people a clear path to where they can go and what they can accomplish while working for you. Invest in them. Let them get out there and make some mistakes, because over time it will be worth it for you and your business. Not only will this take a lot of stress off your shoulders, but it will also help you build a kick-ass team that actually thinks like you and shares your vision. 

Be sure to watch my video on the topic of “How to Make Money as a Contractor” and check out the rest of my YouTube channel to learn even more. And last but not least, get in touch with a community of like-minded contractors who want to grow their businesses and achieve success by joining The Contractor Fight Facebook Group today!