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Specializing in Small Projects

Author & Date: Wendy A. Jordan 12/2004
Publication: Professional Remodeler
Article Link

Many contractors have a department of the company that handles service work and small projects but rarely do you find a company that actually specializes in service and small projects. Often a company starts by doing larger projects and the service is treated like an add-on department. This profile of D/R Services Unlimited shows that a company can be built around small and service projects with the larger projects treated as an add-on and why this may be a good strategy to think about. The downside to service work is that you have to deal with hundreds or even thousands of small jobs, marketing to find new customers, dealing with customers, problems, invoices and collections over the course of a year.

OK, now look at the HUGE upside advantages: Your revenue and profit base is diversified over many customers. If the work is primarily service based then it is not as cyclical as large project work. The work is not going to be as price sensitive as competitive, large project work so your margins can be substantially higher even considering the higher overhead costs required. Cash flow is much better because you have smaller amounts of money coming in from a diverse group of customers so a single bad job, claim or other dispute will not impact your company. From a marketing standpoint you touch a lot more customers and get your name out in the community a lot more and that leads to more business.

Utilize this article just for sparking ideas about whether a service department is right for your organization or if your existing service department is getting the attention and results it deserves.

Posted by David Brown on August 21, 2005 01:11 PM|Permalink

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