Your Business - Your Niche

Today’s economy has many contractors on the ropes, acquiring work requires the sharpest of pencils while estimating projects. Clients and General Contractors require more and more for the absolute lowest costs, which reduces out profits to extremely small levels. These are the times that we face today, we all hope for better times soon. Today we can only deal with what is available to us and make the best of current conditions.

Watching contractors in this economy is frightening to us as we watch many who have lost work generally because the owners have lost financing for the project or lost the nerve to continue with the project. Many of those contractors wander into areas of our trade that they are not equipped to complete in. We have seen residential contractors bidding on large commercial and industrial projects. We see nothing wrong in venturing into new markets to diversifying the work that we complete - however we believe in taking baby steps while venturing into any new market or specialty work arena. A short time ago we completed some consulting for a contractor that had been a light commercial and residential electrical contractor. This contractor had completed a few - very few commercial projects in the one hundred to one hundred and fifty thousand dollar range. His current problem was that they had successfully bid on a project that was nearly a million and a half dollars. This contractor was not capable of managing this project, had in fact put together a bad estimate and did not have the financial resources to handle the project. Ultimately it cost many people their job and the contractor was out of business.

Electrical contracting is not for the weak of heart, it is a tough business that has landmines around many corners. Good electrical contractors have brushed around these land mines and occasionally stepped directly onto them. It is always preferable to hit those landmines while working a project that is small enough in size and risk that these landmines do not wreck havoc on the business that you and your employees have worked so hard to build up. We do not have the answer as to venturing into new areas of our trade or not, what we do suggest is that if you do venture into a new type of project do so with caution. Perhaps hire someone with experience with this type of work, utilize them to train your firm how to play successfully in this new market. Check to see what the tooling to venture into the new work type will cost and what is the anticipated return on this investment? Check to see what your competition in this new market is like to make sure that the grass is actually greener in this untested market. Those contractors that are involved with this new market for you are just as hungry for work and probably know a few shortcuts that you may not.

Above all else do not abandon the market that has gotten your firm to the area that it currently enjoys. Often firms venturing into new markets forget to continue to pay attention to their niche market and that work begins to suffer, this suffering only causes more problems for your firm in these difficult times.

Any input to these ideas are more then welcome.

Thank you for reading ours.