Job Security Through Diversification: How to Keep Your Head Above Water in a Sinking (Building) Market

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In markets rife with turmoil from the subprime mortgage crisis, many contractors and subcontractors - residential and commercial - are feeling the pinch. Yet others haven�t missed a beat and continue to be as busy as ever, if not more so. What�s their secret?

While every job, project, or geographic area is different, diversification of skills can even out peaks and valleys — and in some cases dictate whether a contractor stays in business or not. Simply put, it comes down to economics and logistics. The more skills a contractor possesses, the more valuable that person becomes, as he or she has the ability to fill more voids and maximize a single job.

Benefits



Being able to step into a job and handle several facets of it yourself brings significant benefits. Perhaps most importantly, you’ll be able to pick up more jobs because you have a wider repertoire of skills and services to offer.

If you only do framing, and market conditions force a slowdown in new construction, you’ll be out of work. But if you also can paint, install flooring, or construct a deck, you’ll find yourself in a marketable position for homeowners who turn to remodeling and updating in lieu of building new homes.

A wide set of skills also will make you more valuable to clients. Most clients — large and small, general contractor or end consumer — appreciate the simplification that comes with working with one person instead of many. It means fewer people to keep track of on the job, fewer phone calls to make, fewer checks to write, and easier logistics. Subcontractors who diversify may appreciate the opportunities to become their own contractors for some jobs, too.

Diversification will allow you to cut down on work stoppages that result when given individuals (you, a subcontractor, or an employee) go inactive after completing their primary jobs. The ability to shift personnel to other facets of the job increases productivity and helps you maintain a greater percentage of the full project. It also can give you greater control over the timeline of the project since you can lessen reliance on subcontractors.

Last, but definitely not least, diversification will lower your stress level. The security of knowing you can find work in a variety of conditions and are not reliant on just one skill set will increase your quality of life — and give you the opportunity to seek out those clients you really want.

How It Works

In choosing skills with which to diversify, target those that fall into one of three areas: those that are natural extensions of what you already can do, those that are closely related, and those that are relatively easy to learn.

For example, plumbers might learn to install gas lines and fireplaces; both types of jobs are natural extensions of work they already do on a regular basis. A drywaller could learn how to apply stucco, texture, and plaster — all skills that are closely related to his or her core competency. A general contractor can make sure everyone on staff picks up relatively simple-to-learn skills such as painting, caulking, and installing pre-finished wood floors.

Learning new skills is not as difficult as some may think. Many individuals will learn quickly just by doing the activities, especially if the activities are closely related to their primary skills. Otherwise, it can be helpful to read how-to books or articles (especially ones written by other contractors) in trade magazines. Watching what the other trades are doing at a job site can provide significant knowledge.

A word about revenue: when diversifying your skill set, remember that every skill has its own merits; don’t feel that any particular job is “beneath” you. In terms of billing, over the long term, you’ll likely find that you’re making as much (if not more) doing a variety of jobs than you do with your primary skill set. Clients place tremendous value on the ability of one person to do multiple jobs and the ability of that person to understand how the components of a job work together.

The Payoff

The investment you make in broadening your expertise will produce gains for years to come. Whether you are a general contractor looking to maximize your staff’s potential or a single subcontractor, diversification will help you generate substantial results:
  • Make more money on fewer jobs.
  • Earn two to three times as much from a single client.
  • Consolidate your client list with fewer small clients and more large clients.
  • Eliminate up to 10% to 20% of downtime on projects.
For relatively little time, you’ll reap results that can take you through good times and bad. No matter what the market has in store, you’ll find you’re positioned to succeed.

About the Author

Dean Bennett is president of Dean Bennett Design and Construction Inc., a design/build firm based in Castle Rock, CO. Specializing in custom residential design and construction, projects include remodeling, interior and exterior additions, conversions, basement finishes, landscaping and fencing, and custom finish carpentry.

The company offers concept-to-completion design, including working drawings, blueprints, securing of permits, and inspection coordination. Working with a business model of a single principal on site throughout the project, from architectural design through final construction, Bennett effectively integrates design and construction while eliminating the need to hire separate general contractors, subcontractors, and architects.

Bennett has worked with a national client base since 1996; many of his client relationships have spanned multiple years. He holds Master of Architecture and Bachelor of Environmental Design degrees from the University of Colorado. Bennett is an accomplished fly fisherman, golfer, skier, and snowboarder and enjoys swimming, running, cycling, cooking, and photography. He can be reached at 303-513-2065 or dean@deanbennettdc.com.
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