12 Ways to Run a Better Residential Contracting Business


Jay Pawlowski
Lead Content Specialist
January 7, 2020
minutes to read

In 2019, small businesses across all 50 states saw their revenue grow. That’s good news, especially for contractors: The construction sector, which includes residential HVAC, plumbing and electrical, led all small business revenue with a growth of 23.3%.

Growth comes from incorporating good business practices, marketing yourself effectively, using business data wisely and generally being as efficient as you can be. 

Here are 12 tips and tricks from our past year of blog posts to help you do just that.

1. Eliminate Doughnut Time

Try changing the window for the first job of the day, and setting expectations for behavior between jobs, to ensure your techs are managing their time properly.

2. Institute a “Debrief” for the End of Every Job

Make sure your team is collecting these seven pieces of info at every job, and also telling the back office — right away.

3. Make the Most Out of Job Interviews

Use our interview checklist to identify leadership traits in job candidates early on, and filter out the ones that may not be a long-term fit. 

4. Protect Yourself Through Accurate Timekeeping

What if a former tech files a lawsuit alleging you owe him overtime? Or what if you get hit with a labor audit? Be prepared.

5. Turn Your Existing Customers Into Repeat Customers

Learn why focusing on existing customers and encouraging their repeat business is paying off big-time for many home service business owners.

6. Be a Business Innovator, Not a Follower

As struggling retail giants show, business owners always need to be proactive, not reactive, to grow and prosper.

7. Get Your Team to Follow New Processes (Video)

Learn how to motivate your employees to understand why changes are taking place and — more importantly — to follow your new processes.

8. Pick the Right Commission Plan 

Implement a pay system that compensates employees appropriately, contributes to company profitability and treats homeowners fairly.

9. Implement Happy Checks and Follow-Up Calls

Doing a good job isn’t enough. There are steps your team should take after the work is done to ensure a homeowner is pleased. 

10. Improve Your Rapport With Your Techs (Video)

Learn the best ways to communicate with technicians of varying ages, and get the most out of your team.

11. Manage Your Online Reputation

One bad review can hurt your business, even when it’s not justified. Try these tips for maintaining a good reputation.

12. Start the New Year Off Right!

Close the books on last year, get your price book in order and set goals for each department in your company.

Look at Pricing

The start of the year is a great time to look at pricing. Usually, you have an idea of how your company fared the year prior, and you want to ensure you will continue to grow in the months to come. Many of us make New Year’s resolutions with respect to spending or saving in our personal lives, and it’s no different for business owners. Making sure your pricing is in line with where it should be is one of the strongest ways to start the year the right way.

Part of looking at your price book is finding where the issues are, and that can take time. An HVAC company in January is going to be very busy, so it’s a difficult time for a close look. However, a plumbing company might not be as busy. Whenever you tackle this job, your best bet is to look at what your labor rates are. Start there, and let it trickle down across the board. Ask yourself, “Are my labor rates helping my business stay profitable?”

Remember, there are many different services out there and many different groups or communities that you can engage. Never hesitate to say, “Hey, I’m a business owner in Florida. What should my labor rates be?” You can build your price from there. There are also some great billable hour calculators available.

Set Goals

There is no better time of year for looking inward than January. Set your personal goals and company goals for the following 12 months. If you can break those down into departmental goals, even better! Perhaps that means a CSR booking closing rates a little better, or a truck doing 250,000 a year rather than 200,000.

Many companies have found that using an Objectives and Key Results (OKRs) goal-setting system pays off. Looking for a guidebook when it comes to OKRs? Check out Measure What Matters: How Google, Bono, and the Gates Foundation Rock the World with OKRs by John Doerr. 

One key question is the best way to handle setting goals: Is it smarter for business owners to handle this solo, together with staff, or to delegate completely? 

The best approach is to set goals at the department level. As an owner, you need to take the time to understand what the goals are in each department, and make sure they are in line with your goals for the company. No one likes to set unattainable goals for themselves, so make sure you push your departments to set goals that are lofty, rather than simple ones to feel good about hitting. Entrust your staff to aim higher, and watch how they respond.

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