Today in 5 Minutes or less, you’ll learn:
✔ The Numbers Game → Why focusing solely on growth metrics leads to scaling failures.
✔ Systems Before Scale → How to build a solid foundation for sustainable expansion.
✔ Smart Hiring Strategy → The key to finding team members who’ll fuel your growth, not hinder it.
✔ Profit-First Scaling → Why prioritizing profitability beats chasing revenue every time.
✔ Sustainable Growth Tactics → Practical steps to scale your contracting business without burning out.
The Truth About Scaling Your Contracting Business
Is rapid scaling just another get-rich-quick scheme?
Here’s what 22 years in the trenches taught me about sustainable growth:
I remember the day like it was yesterday. There I was, standing in the office of a contracting business I’d been called in to help. The owner, let’s call him Mike, looked defeated.
“Jim,” he said, “I thought scaling meant success. But now I’m drowning in overhead, my quality’s slipping, and I’m working 80-hour weeks.
What am I doing wrong?”
Mike’s story isn’t unique. I’ve seen it play out hundreds of times.
But here’s the kicker: it doesn’t have to be this way.
Ready to learn the truth about scaling your contracting business? Let’s dive in!
Ditch the “Growth At All Costs” Mentality
You simply do not want to grow fast at the expense of growing well. Many contractors fall into the trap of chasing revenue without considering profitability or sustainability. It’s a recipe for disaster.
Take Sarah’s roofing company. She landed a massive commercial contract and doubled her team overnight. Six months later, she was on the brink of bankruptcy.
Contrast that with Tom’s painting business. He grew steadily, adding just 2-3 new crew members each quarter. Five years later, he’s running a $15 million operation with 18% profit margins.
The difference? Tom focused on sustainable growth, while Sarah got caught up in the “bigger is better” mindset.
Darren Hardy, author of “The Entrepreneur Roller Coaster,” puts it bluntly: “More businesses die from indigestion than starvation.” His words ring true in our industry.
Ignore this step, and you’ll find yourself with a bigger business that’s actually making less money. You’ll be working harder than ever, with nothing to show for it but stress and sleepless nights.
Master Your Numbers
Getting this right can mean the difference between scaling to freedom and scaling to failure.
It’s not enough to know your revenue. You need to understand your true costs, profit margins, and cash flow patterns.
Don’t even think about scaling until you’ve got a firm grasp on these numbers.
Here’s what you need to do:
Track your job costs meticulously, including labor, materials, and overhead allocation.
Calculate your true profit margin on every single job.
This process might seem tedious, but it’s the foundation of smart scaling. Without it, you’re flying blind.
Think of it like building a house. You wouldn’t start throwing up walls without a solid foundation, right? Same principle applies here.
Build Systems Before You Build Your Team
Don’t fall into the trap of thinking you can figure it out as you go. That’s a surefire way to create chaos.
Before you even think about hiring, answer these questions:
What specific tasks will new hires be responsible for?
How will you train them consistently?
What metrics will you use to measure their performance?
How will you ensure quality control as you grow?
What technology or tools will you need to support a larger team?
How will communication flow in a bigger organization?
Taking the time to do this “brain dump” might feel like it’s slowing you down. But trust me, it’ll save you countless headaches down the road.
Here’s the deal: bringing new people into a messy situation just creates more mess. And more headaches for you.
Instead, focus on nailing down your systems first. Figure out the best way to handle estimates, schedule jobs, manage your crew, and keep clients happy. Write it all down. Make it foolproof.
Once you’ve got that sorted, then you can think about expanding your team. Why? Because now you’ll have a blueprint to follow. You can train new hires properly and make sure everyone’s on the same page.
Hire For Culture, Train For Skills
Now that you’ve laid the groundwork, this step will feel much more natural.
Your previous work on systems and processes will guide your hiring decisions. You’re goal should never be looking for warm bodies to fill slots. You’re looking for people who fit your company culture and can thrive in the systems you’ve built.
For example, when I helped American Building Contractors scale from $3.7M to $34.7M, we didn’t just hire more roofers. We looked for people who were teachable, had a strong work ethic, and bought into our vision of quality and customer service.
Remember, skills can be taught. But attitude and cultural fit? Those are much harder to change.
So, when you’re interviewing, pay attention to things like:
How do they treat others?
Are they eager to learn?
Do they take pride in their work?
Can they handle feedback?
These are the qualities that’ll make or break your team in the long run.
Once you’ve found those diamonds in the rough, then you can focus on sharpening their skills. Set up a solid training program. Pair them with your best workers. Give them room to grow and improve.
Monitor, Adjust, Repeat
This is where all your hard work pays off.
As you start to scale, keep a close eye on those numbers we talked about earlier. Celebrate your wins, but don’t get complacent.
Scaling is an ongoing process, not a one-time event.
The secret to sustainable growth? It’s not some magic formula or hidden tactic. It’s doing the unsexy work of building a strong foundation, then methodically expanding on it.
This approach helps you avoid the common pitfalls of rapid scaling: quality issues, cash flow problems, and burnout.
When you spot something that’s off, don’t ignore it. Tackle it head-on. Maybe you need to tweak a process, offer some extra training, or try a new approach altogether. That’s okay – it’s all part of growing.
The key is to keep at it. Monitor, adjust, then start the cycle all over again. It might sound like a lot of work (and yeah, it kind of is), but it’s how you stay ahead of the game.
Remember, the most successful contractors aren’t the ones who get everything perfect right out of the gate. They’re the ones who keep learning, adapting, and improving, day in and day out.
The Power Of Patience
Here’s something you won’t hear from the “scale fast” gurus: patience is your secret weapon.
Rome wasn’t built in a day, and neither is a sustainable contracting business. Rapid growth might look sexy on paper, but it often leads to equally rapid decline.
Jim Collins, in his book “Good to Great,” introduces the concept of the flywheel. It’s a perfect analogy for scaling a business.
At first, pushing the flywheel takes enormous effort. You might feel like you’re not making progress. But with consistent effort, the flywheel starts to move faster and faster.
“In building a great company or social sector enterprise, there is no single defining action, no grand program, no one killer innovation, no solitary lucky break,” Collins writes.
“Rather, the process resembles relentlessly pushing a giant, heavy flywheel, turn upon turn, building momentum until a point of breakthrough, and beyond.”
This is the approach that truly successful contractors take. They’re not looking for overnight success. They’re building something that lasts.
Systemize Success: The Truth About Scaling
And there you have it. The truth about scaling your contracting business isn’t about rapid growth or flashy tactics. The true magic is in showing up intentionally each day, making things a little bit better.
Remember Mike from the beginning of our chat? He implemented these steps. Two years later, his business had tripled in size – and he was working fewer hours than ever.
You can do it too. Are you ready to scale the right way?
As the old saying goes, “The best time to plant a tree was 20 years ago. The second best time is now.” The same applies to building systems for scale.
Start today. Document one process. Hire one person who embodies your values. Take one step towards understanding your numbers better.
These small actions, compounded over time, will set you up for sustainable, profitable growth. And isn’t that what scaling is really all about?
You’ve got this. Now go build something great.
– Jim Johnson