Posted by: Holly Welles, The Estate Update
Published: October 17, 2019
The construction industry is incredibly broad, and it would be nearly impossible to provide coverage for everything it offers, even as a large business. Instead, many companies specialize in a niche and offer a more narrow scope of contracting services.
For a majority of contract work, customers tend to prefer “experts” at their craft. That is especially true for challenging or unique projects, some of which may require a special skill set. A company or team that doesn’t have a specialization and purports to do everything may seem to have less experience with specific tasks. It’s always better to do a few things incredibly well than a lot of things poorly.
Why is specializing considered important to success as a contractor? How can your team choose a path to success? Here’s what you need to know to level up your business.
Why Choose a Contracting Niche?
When customers want a true professional, they’ll avoid all-encompassing opportunities and choose a team based on their direct experience. Construction Business Owner reports that companies who specialized in their services won bids nearly twice as often as competitors without a specific niche.
Companies that choose several (often related) niches combined can offer multiple services to a single customer. For example, a company that pours and shapes concrete could offer unique finishing services, like painting or staining. Then, customers who are already having a concrete segment put in have the option of further enhancing the build, all through the same contractor.
Trying to do everything and anything will wear you and your team thin, but it will also impact your company's finances. You’ll need to source more equipment and supplies, and the monetary costs will always be much higher. A construction budget is more manageable when you’re more accurate with your dealings and take care of specific projects and tasks.
How to Find a Niche That’s Right for You
Choosing a niche is best carried out over an extended period. Why? Because if you randomly or quickly choose something to specialize in without doing research, you could end up focusing on projects you’re not good at or that you don’t enjoy.
Follow these steps to choose the best niche for your business:
1. Align work with your interests and passions.
It's always best to choose projects you genuinely enjoy doing. Not only will the time pass more pleasantly, but you and your team will most likely produce some of your best work.
How do you spend your free time? Think of how you can incorporate that into your business. Customers often look to do business with contractors who match their interests.
2. Talk to your existing customers.
See what your existing customers want and need out of a contractor. Feedback from all customers is welcome, but you should prioritize repeat customers for obvious reasons. It’s a great way to discover potential work opportunities that you might not have considered.
3. Research your competition, and choose a similar specialization.
You still want to have a unique business proposal, but selecting a burgeoning market means you're entering a more profitable niche. While specializing is great, there is a possibility that you can get too narrow and miss out on business.
Conduct a thorough analysis of the market you’re considering in order to gauge interest in your services, especially if you’re serving a primarily local market.
4. Conduct due diligence.
What may seem like a great idea initially may reveal itself as unprofitable after a bit of research. Some great ways to look up potential business opportunities include talking to customers, conducting surveys, monitoring popular search terms on the internet, paying attention to incoming requests, or keeping an eye on other businesses in the field.
5. Test your idea.
Once you have all the information you need and know what you’re going for, dip your feet in the water. Reach out to some potential customers, and try to get a feel for how well your niche might perform. If your trial period lasts a few months and no one is biting, then it might be time to go back to the drawing board.
6. Give it time.
You don't want to be out of work while you’re trying to choose a niche. But you might not find something right away. It’s always beneficial to give yourself and your team a little time, especially if you’re gaining a foothold in the industry.
With a bit more experience under your belt, you’ll have a good idea of what works, what you’re best at, and what kind of services you can offer—as opposed to just throwing ideas at the wall and hoping they stick.
The Benefits of Specializing as a Contractor
Once you feel that you’ve come across a business idea or specialization that you can sink your teeth into, go for it! Put your best foot forward and dedicate your business and team to that endeavor.
It’s okay if you’re not necessarily the best of the best right out of the gate. But with plenty of time and experience, you’ll get there. More importantly, you’ll have the opportunity to work with new clients and on new projects that you likely would never have considered in the past. Think of it as a learning curve, which will help you and your crew grow as time goes on.