Business Models For Brand New Businesses

Journeyman T

What’s the best plan for a business model of a brand new construction company?

This is what I’m thinking of right now:

I’ll begin with free estimates. When the customer calls, and then I go and survey the job and write up a proposal for free. I plan to stay at this stage for no more than six months.

Once I get my name out there, I’ll quickly move up to charging for estimates. When a customer calls, I’ll charge a small fee to go and survey the job, and then I write up the proposal for free.

Then, when I get a hold on the designer market, I’ll switch to cost planning. When a customer calls, I’ll once again go and survey the job for free, but I’ll now charge for my proposal instead by getting involved with the designer from the start and helping my client plan the cost of the design to fit within his budget.

Finally, when my company develops a widely known reputation, and I acquire the resources to become a design/build company, I’ll begin charging for proposals. When a customer calls, I’ll still go and survey the job for free, but now instead of charging for cost planning services, I’ll start charging for the very proposal.

Any thoughts?

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Brickie

What are you exactly doing now? Working for someone or for your self??? Where in N. Indiana are you?

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“Ron Paul is one of the outstanding leaders fighting for a stronger national defense. As a former Air Force officer, he knows well the needs of our armed forces, and he always puts them first. We need to keep him fighting for our country.” – Ronald Reagan

Journeyman T

Given the vast amount of lurkers probably viewing this site, I don't know if it would be wise to disclose my exact location. I will say, though, that it's not exactly the big city, and most contractors don't charge for estimates/job surveys here.

As to what I'm doing right now, I'm working for someone else. However, I tried going off on my own a yaer-and-a-half ago, but I soon realized that being a good craftsman does not make you a good businessman. Now I'm trying to get all of my ducks in a row, and I do mean ALL of my ducks in a row, before I re-enter the market - hopefully with a bang.

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Brickie

JT,

Don't need an exact location, just a hint if you're close by. I cover Lake, Porter, La Porte, Jasper & Newton Counties. Are you in any of them?

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“Ron Paul is one of the outstanding leaders fighting for a stronger national defense. As a former Air Force officer, he knows well the needs of our armed forces, and he always puts them first. We need to keep him fighting for our country.” – Ronald Reagan

Journeyman T

I'll put it this way, I'm close. I also frequent all of those counties except Newton quite regularly.

My guess is the closer you get to Chicago, the easier it is to charge for an estimate, while the further away you get, the tougher it is to charge for that kind of thing. Have you found this to be so?

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ChrWright

When you say construction company, what services will you offer?

What's your target market & how do you plan to reach it?

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Christopher Wright, CR: President @ WrightWorks, LLC/President @ Central Indiana NARI, Named to the 2010 REMODELING Big50
www.WrightWorks.net - Facebook - Twitter - Carmel Remodeling
Indianapolis Kitchen Remodeling Contractor - You Can Get There From Here

Journeyman T

My target market is high end remodeling. My services will mostly be carpentry. I plan on starting with cabinet installations, expand to a complete finish carpentry business, then to kitchen and bath remodels, and finally a full fledged general contracting company.

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Putty Truck

Why start with free stuff when now is the time you need money the most? While you are running around for free (and people are giving you the run-around), jobs are a-wasting. When you are running crews and driving around in a Benz, then give stuff away for free.

The first contact has to be smooth as silk and totally customer-oriented to be able to charge for an estimate. If the ho has to leave messages with your teenage answering machine, you ain't gonna get jack anyway.

The hardest trait to learn is greed. If you don't go after every dime, you won't make a dollar. I give nothing away, period. If you work for me, you are on commission. If I work for you, every washer, every task is charged one way or the other.

The overwhelming desire to make money, to make money on your own dime, is what business is all about. Nothing is free and the ho knows it and you don't.

Man, I needed to hear that...

Brickie

JT,

You have to know the type of clients that you are targeting with the services that you are providing.

I don't charge for estimates.

The overwhelming majority of my clients are referrals. Most of them are very upscale, work in the peoples Republik & live in NW Indiana. It would be a complete waste of time to charge for an estimate when I'm already getting the work

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“Ron Paul is one of the outstanding leaders fighting for a stronger national defense. As a former Air Force officer, he knows well the needs of our armed forces, and he always puts them first. We need to keep him fighting for our country.” – Ronald Reagan