Smart Construction Growth: Why Bigger Isn't Always Better

How do you know when to pause?

Whether it's a single job or what, I've had some contractors, one in particular I was discussing last week, and to their credit, they understood that they're an electrical contractor.

They've gotten in with some great GCs, and they want to keep feeding them as much work as they can do, but they don't have their company healthy.

They have ways of funding their projects, but it's a lot of the stuff upside down.

And the point that I was making to them is, let's get your company healthy, and then you got a long...

He's in his 30s.

He's got a long career ahead of him.

The false promise of more revenue equals more profit, my life is bigger, better, and all that stuff.

Just cutting to the chase, sometimes the bigger leads to more debt.

And I've seen it where there's nothing left.

They were better off being at a smaller revenue level, and they were making more profit.

You see that?

Yeah, all the time.

And it's tough.

You don't want to be negative with your clients.

You want to be upbeat and positive.

But if their mindset is not to make the health of their company a priority, especially if it's driven by ego or someone else talking you into doing it, I've seen more bond claims because somebody else that a certain contractor made money with in the past is pushing them out of their comfort range and telling them, "We're gonna help you grow bigger and faster than you have ever grown before.

Just stick with us.

This relationship's gonna make things happen." That's not who you want to hitch your wagon to.

You want to hitch your wagon to consistent sources of providing you income and revenues in the range and capacity that you're used to performing and making profits.

Yeah, I think it's more of a false promise of more revenue equals more bottom line, and they're trying to chase this top line, bigger job, more backlog.