The Subcontractor’s Strategy to Exceed $10M in Revenue: Part 3 – Perfect Your External Presence
The final part of this 3-part series from Billd will outline the steps every sub should take regarding their external processes, and their market presence at large. We previously dove into the delicate balance of your internal processes, and why you need to take the time to carefully perfect your internal structure before you can reach, support, and exceed $10M in revenue. With that mind, we’ll now explore how to present your well-structured business in the market.
Table of Contents
1) Build Relationships with GCs
As a rapidly growing subcontractor, you’ll benefit from seeking out and nurturing relationships with new general contractors. At this phase of your growth, when we say expand your market, we are not referring to expanding your market geographically. There are likely plenty of opportunities where your business is already operating. This section will go through the best ways to expand your market by finding more projects to bid on in your current operating area.
Cold Outreach to General Contractors
The idea behind this is simple. Get your company name out there! Suppose you don’t make new relationships with general contractors. You won’t learn about project opportunities. In that case, you won’t have as many options of projects to pick between, and your company won’t have as much name recognition.
Here are some simple steps you can take to get on GC’s contact lists for new projects:
- Make a list of at least 50 commercial GCs in your current operational area. Add them to a spreadsheet along with either an actual employee and email from the company’s website, or an application form for new subcontractors, often included on larger general contractor’s websites.
- Once you have your spreadsheet of general contractors, the next step is crafting your messages. Reaching out to new GCs might seem like a huge amount of effort, but you could gain an immeasurable amount of business for the five minutes it takes to write an email.
Here is an example of a message you can send to a potential general contractor you’d like to work with:
Inquiry about [GCs Name] subcontractor application process
Hi [GCs Representative Name],
My name is Bryan, and I’m the owner of A1 Subcontracting. I’m reaching out to you today because I saw that [GCs Name] did the Studio Apartments [project that the GC has done] near downtown Austin. My company, A1 Subcontracting, has worked on similar projects, such as [insert project name] with [insert name of GC on other project you’ve done], and we would love the opportunity to be notified of upcoming projects that [GCs Name] is putting out to bid.
Could you let us know the application process for being included in your bid letting process?
Looking forward to hearing from you.
President of A1 Subcontracting
- Once you’ve created your message, it’s just a matter of plugging in a little bit of new information based on each GC on your contact list, and you’re ready to start sending emails!
- Make sure to be diligent about responding to GCs who contact you back.
- As soon as you’re done sending your first batch of 50 emails, start making your next list of GCs to contact. This can be an ongoing process that will help your business build a stable pipeline of projects.
Join Bid Boards
There’s a variety of options when it comes to bid boards. We recommend getting a membership to 1-3 bid boards and having someone periodically check the bid boards for new project opportunities. When you grow beyond the $10M in revenue segment, having an employee find, estimate, and bid projects from a bid board could become someone’s entire job.
Three of the most used bid boards are Autodesk’s Bid Board Pro, Bid Clerk, and Dodge Analytics. While almost all bid boards require a monthly payment, it couldn’t be more worth it. Bid boards are one of the easiest ways to find, select, and bid on projects.
Find Government Projects to Bid On
Taking on your first government project is no simple task, but it can open a whole new pipeline of business opportunities and may be just what you need to accelerate your business’s growth. Applying for government construction projects requires significant resources and effort, and is not for everyone, but being able to take on federally funded projects can be a game-changer for your business. Public projects are open to bidding by any construction company and can provide your business with stable and potentially long-term work.
2) Build Relationships With Suppliers
As you recall from part 1 of this series, gaining favor with your suppliers takes time. Material suppliers are the last in line to get paid on any construction project, even behind subcontractors. Anything that you, as a subcontractor, can do to reduce your supplier’s risk will help you build better relationships and, ultimately, get better deals on your materials. There are two big ways that you can build better relationships with your suppliers while getting better deals on your materials, now:
- You are more likely to get a discount from distributors if your company’s order volume is high
If you are always shopping around for the best bid, you may be hurting yourself more than helping. As you build relationships with suppliers and have higher order volumes, they are much more likely to extend more favorable payment terms, give discounts when needed, and help you source materials faster than your competitors. Especially if you’re doing less than $10M in revenue, working with 1-2 suppliers more regularly is the best option rather than working with the lowest bidder on every project but using 6-10 different suppliers.
- Limit your financial risk to suppliers by making all payments on-time
We can’t emphasize this enough – the less financial risk you, as a subcontractor, present to a supplier, the more likely you are to:
- Have your terms extended
- Have discounts applied to your materials
- Have increased material allocations from suppliers
- Create better relationships with your suppliers
That means that you should be paying your suppliers on time, every time. If you can pay them up front, that can give you even more favorable pricing, but it also hurts your business cash flow which is why options like Material Financing from Billd exist.
If you want better deals and a place at the front of the line for materials, build a good relationship with your suppliers by paying them within 30 days or less and using the same suppliers as much as possible.
3) Form Relationships With Your Competition
You might be saying — get to know my competition? Why would I do that? Well, the fact is that no one understands the challenges that your business is facing better than your direct competition. By building relationships with your competition, you can help each other grow.
Forming relationships with your competitors allows you to assist each other when all sorts of needs arise. Here are a few examples:
- A piece of equipment broke down, but your competitor uses the exact same equipment, and they aren’t using it right now. A quick phone call could save your business a ton of money renting a new piece of equipment on short notice, and then when your competitor has a similar issue, you can reciprocate their kindness.
- Sending potential clients to competitors might seem counterintuitive, but if you simply can’t take on a client’s project, it helps your relationship with the client if you can refer someone who can help them.
- You have a labor shortage, but several projects are coming up. Ask your competitor if they have any crews that aren’t as busy that they can loan out for a fixed rate.
4) Keep Learning
As a subcontractor, there are so many fields related to being an entrepreneur that you can continue learning about that will help grow your business. You should include continued education as a pillar of your business. As an owner or employee, there will always be opportunities to learn more about construction, business, law, equipment, relationships, and more.
There are lots of organizations that offer construction certifications for anything ranging from technical skills to interpersonal skills. To know what certifications make sense in your industry, it is crucial to see what other people in your trade have certifications for and what type of certifications general contractors are looking for in their subcontractors.
There have been countless other entrepreneurs in your place trying to grow their subcontracting business, and there are tons of resources out there for you, like podcasts, books, and blogs. When you’re in a rut or don’t know the next steps for your business, go into research mode or give Billd a call (512.270.4805), and one of our team members will assist in developing new growth strategies.
We hope you found this series enlightening and useful in your journey to growing your business revenue. At Billd, our mission is to serve as an advocate for subcontractors and provide information that will steer you toward success. As you inch toward $10M, or wherever your revenue goal post may currently lay, we hope to serve as a trusted partner in the realm of everything financing and beyond.
About Billd: At Billd, we provide a payment solution that enables commercial construction contractors to free up cash for material purchases while enjoying the flexibility of 120-day payment terms. You get financing for commercial materials upfront with the freedom to pay it back at your own pace. Learn more about how we can help eliminate your company’s cash-flow problems so you can win more bids and grow your business.Learn More