The majority of subcontractors want to grow their businesses—but many of them don’t know the right way to do it. That’s why Billd hosted a virtual Subcontractor Meetup featuring consultants Josh Luebker and Jerry Aliberti, two industry professionals dedicated to helping subcontractors successfully scale their businesses. They unpacked the most common mistakes that hold businesses back—and shared the strategies high-performing subcontractors use to grow sustainably and profitably.
In this blog, we’ve distilled six key takeaways to help you set your business up for long-term success.
Table of Contents
1. Think About How You’ll Support the Work Before You Bid
“It’s not just about winning the work; it’s about supporting the work,” was one piece of advice from Luebker. Subcontractors need to cover material and labor expenses before earning a single dollar from a project—a challenge that compounds with each project a subcontractor takes on. To make matters worse, subs don’t always have the available capital to both cover upfront expenses and withstand long payment timelines on current projects, making it difficult—if not impossible—to take on more and bigger projects.
For subcontractors interested in growing their revenue, work backwards from your goal to chart your course. Then, determine how much capital will you need in order to do that work comfortably. See how that compares to the capital and resources you currently have.
To grow efficiently, subcontractors need a diverse set of capital options. Construction-specific financing, supplier terms, a bank line of credit, and more can help you cover expenses while allowing you to protect your cash to reinvest in your business and pursue more ambitious projects. Using multiple forms of capital will allow you to create both the diversity and the capacity you need to keep projects running smoothly and empower you to take on additional work.
Technology makes a difference here too, helping you reduce your overhead burden and keep your operations leaner. Modern tools such as AI assistants and construction software can help you manage projects more effectively. These technologies ensure continuity even during staff absences, enabling businesses to maintain efficiency without disruption.
2. Assess Your Project Capacity and Communicate It to Clients
Calculate how much work your team can reasonably handle with the resources you have. Determine your capacity by evaluating current commitments, then see how much additional work you can take on without compromising quality. Communicate this clearly to clients—if you only have capacity for a certain number of projects, let them know. Transparency about your workload can build trust and help clients understand your limitations.
Additionally, this approach may incentivize faster decision-making if clients realize it’s important to secure your availability early. By proactively managing expectations and aligning on capacity, you can maintain strong client relationships while ensuring your team delivers consistent results under realistic conditions.
3. Focus on Your Niche
As a sub, it’s important to choose projects that align with your strengths if you want to grow sustainably. Don’t chase every opportunity in your trade indiscriminately. Luebker provided the example of an electrical sub who excelled in specialized projects like EV chargers or traffic signals. While they might be tempted to expand their offerings into new types of projects like data centers, it could overextend their team.
By focusing on the business’ strengths, this subcontractor not only established himself as an expert in his trade, but he was also primed to succeed thanks to minimal competition and having lower overhead than his peers.
In addition to the skillsets within your team, Luebker says that your bottom line can partially dictate your niche. If you’re making substantial profit, it’s a good area to concentrate on.
4. Develop a Culture of Transparency and Accountability
Establish a vision for the culture for the company, rather than expecting culture to evolve on its own. Additionally, create a culture that prioritizes transparency and accountability. Transparency requires a commitment to intentional, methodical communication that goes beyond daily messages among the team or with clients. For example, when you establish your growth plans, share them with your team and regularly update them on any changes.
Aliberti also recommends holding regular, structured meetings where you dive into the status of the company at all levels, including project updates. These meetings help foster accountability as employees can share the latest on how their projects are faring and workshop solutions together.
In addition to regular meetings, once a year you should gather your team and do a retrospective on the business: what went well, what didn’t, and what clients or types of work were the most profitable. This annual assessment will help you clearly define your strengths and weaknesses.
5. Invest in Relationships That Facilitate Growth
Sustainable growth isn’t just about scaling revenue. If done right, it actually puts you in a position to build stronger relationships with GCs. Unmanaged growth, however, can be a relationship killer. As Aliberti puts it, “What keeps a sub sustainable is when they stay within their [ideal revenue] range. When they start to take on too much, that’s when quality starts to deteriorate.”
Healthy growth involves identifying your target markets and best GCs to work with. This empowers you to deliver at a quality level that helps you maintain and strengthen your customer relationships.
6. Don’t Focus on Topline Revenue over Bottom Line Profit
Never chase big projects arbitrarily in the name of topline revenue, rather than zeroing in on what projects are the most profitable. Big ticket projects come with bigger expenses. Without a strong capital strategy in place, these larger expenses could strain your cash flow and hurt your ability to take on future projects that align with your ideal project profile. Instead, double down on your highest margin projects, and don’t overextend yourself. Growth requires goals that may cause you to stretch a little bit, but are ultimately realistic.
Luebker points out that you can also be doing the exact same amount of work, and by simply refining your processes—with efficiency-enhancing software or by finding creative ways to remove bottlenecks, wasteful spending, or human error—you can start bringing in more profit from the same types of projects.
Unhealthy growth practices can derail even the most ambitious subcontracting businesses. By following these recommendations, subcontractors can thrive in competitive markets while avoiding common pitfalls that can slow their business growth. To learn more about creating healthy, sustainable growth, watch the full Meetup on demand.
