Three Familiar Business Models in Construction
While there is a plethora of business models from which to choose, construction contractors typically fall into one of these three familiar categories:
High End
Middle Market
Lowest Price
High End
Some examples of those subcontractors who dwell in the high-end construction space include:
Dramatic pitch roofing specialists
Historic restoration plaster professionals
Electricians dealing with installed technologies
Custom glaziers
Level 5 drywall authorities
Notice that each of the examples above deals with specializing within a specialty. While being a part of the high-end market in construction is aided by specializing, other factors are in play.
They are:
High-quality materials
Excellent craftsmanship
Exceptional service
Retail example: Neiman Marcus
Middle Market
Most construction contractors fall into the middle market category as in other industries. Commonly these subcontractors are known by their trade.
Some examples are:
Roofers
Plumbers
Electricians
Painters
Flooring installers
These are the construction subcontractors who do well serving the vast number of owners and general contractors meeting the needs of middle-class America.
Naturally, the factors involved are:
Average materials
Capable workers
Ordinary service
Retail examples include: Macy’s, Target, Kohl’s, Belk, and Dillard’s
Lowest Price
This group of construction contractors is also typically known by their trades as in the middle market example. They set themselves apart from the middle market players by offering the lowest price.
The factors involved are:
Low-quality materials
Able workers
Minimal service
Retail example: Walmart
Know Your Model
As you can see from the retail examples listed in each category, all three business models “work.” The most important idea to understand about these models is they don’t comingle. Neiman Marcus does not sell low-quality items at high prices, nor does Walmart sell high-quality items at low prices.
A Final Example
Think about the materials and joinery techniques involved in making and installing cabinets.
High End: Solid wood and specialized joints
Middle Market: Plywood and average joinery techniques
Low End: Particleboard and plastic joints
Where The Profit Constructors Stand
The goal of Profit Constructors is to aid our clients in running with the big dogs and making a profit in whichever business model they choose. Clean and simple – that’s what we do.
Construction Contractors look to The Profit Constructors to provide advocacy in dealing with:
Clients and customers
Employees and subcontractors
Vendors and service providers
Governmental entities
Working with The Profit Constructors gives Construction Contractors the means to organize their operations in ways that help them:
Remain informed
Avoid hassles
Reduce risks
Be future-ready
Ready for action? Or want to know more? Get in touch today to schedule a complimentary discovery call. 866-629-7735