Contracting Tip: Don’t try to grow your contracting company too rapidly

I know. It contradicts what is a common thought. Everyone says, that you have to get more clients, grow your business and generally have more and more projects to do.

If we look at IT startups, most of them need to grow quickly to survive. It’s not the case with contracting business.

There are a lot of contractors that went bankrupt because of too rapid growth.

Actually, unrealistic growth, over expansion on unfamiliar new markets or entry into new types of construction is a common reason why construction businesses fail.

We, contractors, have something in us that pushes us towards bigger, more complicated projects. We want to feel a bigger sense of accomplishment. Bigger contracts usually mean bigger revenue as well.

But you have to be aware. It may seem that extra figures on a contract fee will make you rich, but it rarely is so.

Bigger contracts mean more risk. Especially if it’s something you never did before in such scope.

Trust me. I know it. I’ve been lured into big contracts before and I lost. And I lost big time.

It actually killed my first business.

It can be the same if you take too much work than you can handle. You may think that you will just take more labor, loan some machines and everything will go smoothly. But it never does. There’ll always be problems. If you don’t organize your company on the small scale, it will be even harder to do it on a larger scale.

So before you expand, take things a little bit slower. Think everything through.

Because what your company really needs isn’t more customers. It’s the right kind of customers. Customers that will pay good money and require little management.

What’s your opinion?

What do YOU think? Do you think that quick expansion is required to thrive in contracting business or you think that it’s better to keep it low and uncomplicated?

This post originally appeared on http://educatedcontractor.co