Industry experts point out that specialty contractors are taking a big risk: if the market for their specific skillset declines, they are without alternative revenue streams. Strategic diversification through services that complement your primary focus can be extremely helpful. Here, experts share examples to help excavation contractors diversify smartly.
Nip Group reminds us that in addition to decreasing the financial risks associated with a single specialty, like excavating, diversification can help contractors appeal to more customers: “Clients are much more likely to hire a contractor that can complete the full scope of their needs if at all possible, over hiring several contractors to perform individualized work.” Of course diversification needs to be strategic to be effective.
Experts suggest five possibilities for excavation contractors:
Excavation contractors have a bevy of opportunities to cover gaps in major projects and take advantage of business opportunities by diversifying their services. Obtaining additional skills such as utility installation and inspection will open up new avenues of work and strengthen excavation business prospects. By becoming a one-stop-shop excavation firm with a broad menu of services such as pipeline televising, underground utility repair, pinpoint hydro or vacuum excavation, foundation piling, and demolition capabilities, excavation contractors can develop a strong presence in the industry with enough work to enjoy secure and profitable business operations. Maintaining mutually beneficial business relationships with fellow contractors and municipalities further strengthens a contractor’s foothold in their market.
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Getting started on new strategies can be daunting, but experts observe that for excavaters, some paths to diverse income streams may be within fairly easy reach—and do not require heavy investment in new equipment. Nip Group offers these examples:
Installing underground utilities such as storm and sanitary sewers can be accomplished with much of the same equipment an excavation contractor would likely already possess.….One sound strategy a savvy contractor could implement is to track when municipalities install new sewer mains and market services to the homeowners that now have to disconnect their existing septic systems and connect to the new sanitary sewer. Excavation contractors are uniquely well-suited to handle smaller jobs such as this with their ability to excavate and install utility lines.
There is enough work nationwide for material hauling that savvy contractors should never have a dump truck sitting idle. Excavation contractors can lease out their haul trucks and operators to take advantage of this swollen market and charge premium rates for their services. This constant stream of work can serve a dual purpose as a valuable safety net for slow periods and a profitable opportunity.
Don’t forget: these days, every financial insight gleaned helps you boost your business forward. With The Partnership Account for Contractors® you’ll have lots of useful intel at your fingertips as you plot your business growth, strategically, one step at a time.
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