8 Challenges To Expect When Starting A Contracting Business in 2024/2025

Starting a contracting business comes with a unique set of challenges, especially when first starting out. It’s important to be aware of the potential hurdles you might face. In this blog post, we’ll explore the challenges discussed in our Small Business Start Guide For The Trades. Download the guide for more guidance on starting and growing your business in the trades.

8. Inclement Weather

Challenge: The weather is unpredictable and can cause project delays and increase costs for your business.

Adverse weather conditions such as heavy snow, rain, high winds, and extreme temperatures can halt work, making it unsafe or impossible for crews to continue. Additionally, unpredictable weather can damage materials and equipment, resulting in unexpected expenses for repairs or replacements. These interruptions can extend deadlines, strain resources, and impact client satisfaction.

Solution: Develop a weather contingency plan for all of your projects.

Closely monitor forecasts and incorporate flexible scheduling into project plans to accommodate for delays. Invest in weather-resistant equipment to minimize damage and implement protective measures like tarps and temporary shelters to shield work areas and building materials from the elements. You can also use Biiibo to deliver your materials as you need them, so they aren’t sitting outside in the elements for a long period of time. Always maintain clear communication with clients and your crew about adverse weather protocols and project changes right away. By staying proactive and adaptable you can maintain project timelines and the quality of your work.

7. Obtaining Permits

Challenge: The permit process can be time-consuming and complex, especially while navigating it on top of starting and running a business.

Depending on the type of project and local regulations, you may need various permits for one job, further complicating the process and extending the time. This is a unique challenge as the time it takes for a permit to be granted is in the hands of each specific municipality and not you or your client.

Solution: Start by researching the local regulations and required permits as soon as you accept a job.

You’re the expert when it comes to permits, regulations, and legalities and your client expects you to know them inside and out. Submit the necessary permit applications right away to get the ball rolling. Once submitted, ask for an estimate on how long the permits usually take in that area and schedule your projects around that timeline. Ensure to give yourself a bit of extra time to account for delays in advance and have the client sign off that they are aware of the timeline and potential delays.

6. Health and Safety

Challenge: Jobsites can be very dangerous to even the most skilled tradespeople.

The job site itself may be deemed too dangerous to complete the job for you or your team. Workers are often exposed to various hazards and risks on job sites that can contribute to accidents and injuries. When incidents happen, you or an employee may need to stop working for a period of time, causing costly delays. Additionally, low overall physical and mental wellness among your crew can impact productivity and increase health issues. Stress, fatigue, and burnout are common in the trades, which can reduce efficiency and further increase the likelihood of accidents. Neglecting health, safety, and wellness jeopardizes not only the well-being of you and your crew but your business as well.

Solution: Supporting both the mental and physical health of yourself and your crew is essential for your overall well-being and success of your trades business.

To support physical health, implement safety protocols and training, conduct regular training, provide access to protective equipment, ensure frequent rest breaks are given, and keep your crew hydrated. For mental health, create an environment where everyone feels safe to discuss stressors and concerns, promote a good work-life balance, offer supportive resources, and recognize and reward hard work. Our Small Business Starter Guide offers more information on health and safety in the trades industry, including practical ideas and valuable wellness resources to support you and your crew.

5. Customer Friction

Challenge: Customer friction can arise in various forms, ranging from communication challenges to disagreements over project specifications.

Misaligned expectations, delays in project timelines, unforeseen complications, poor communication, and lack of transparency are a few things that can lead to frustration on both sides. These issues can not only strain the relationship between you and your client but also jeopardize the successful completion of the project. If left unresolved, customer friction can damage your reputation, result in negative reviews, and hinder future business opportunities.

Solution: Prioritize clear and transparent communication throughout every stage of the project.

Establish regular checkpoints and provide progress updates to help manage client expectations and build trust. In addition, by actively listening to your client’s concerns and addressing them promptly you can stop customer friction right at the start. To make the communication between you and clients seamless, look into project management tools that keep you both informed and updated on project updates. Check out our Small Business Starter Guide and our blog post on essential resources for contractors starting a business in the trades to learn about some neat tech tools you can try. By proactively addressing customer friction and prioritizing client satisfaction, you can enhance your reputation, foster long-term relationships, and drive business growth through referrals.

4. Payments

Challenge: Payment challenges are a common issue in the trades industry, impacting cash flow and overall business stability.

Delays in receiving payments from clients can disrupt project timelines, lead to financial strain, and difficulty managing ongoing expenses. Additionally, inconsistent payment schedules and disputes over invoices can cause further complications, leaving businesses struggling to cover payroll, purchase materials, and fund other operations in the business.

Solution: To effectively manage payment challenges, establish clear and transparent payment terms from the beginning of each project.

Clearly outline payment schedules in your contracts to ensure all parties are on the same page and consider requiring an initial deposit upfront for your work. Implement a reliable invoicing system or software to streamline the billing process and reduce the likelihood of errors or disputes. For a couple of suggestions on accounting and project management software, refer to our Small Business Start Guide For The Trades. These systems can help you track payments, manage cash flow, and forecast future financial needs. Regularly follow up on outstanding invoices and maintain open communication with clients to address issues promptly. By proactively managing your payment processes, you can foster more financial stability, strong relationships with your clients, and support the growth of your business.

3. Supply Chain Shortages

Challenge: Disruptions in the supply chain can have a domino effect on construction projects that cause delays and increase costs, causing frustrations for both contractors and clients.

They prevent businesses from obtaining the building materials they need to complete projects. A large part of running a business in the trades is having a reliable supplier that can provide you with quality materials on time and at a great price. During the global pandemic, there were supply chain shortages that made it extremely difficult for trade businesses to source building materials, causing the prices to skyrocket and big delays in projects.

Solution: Building a strong relationship with a trusted supplier is an important part of starting and growing your business.

Biiibo is the perfect partner, offering reliability and adaptability in sourcing materials that big box stores can’t, even during the pandemic. Check out our blog on how Biiibo can help during supply chain shortages for more information. Our commitment to meeting your needs sets us apart. With our online marketplace and app, shopping for materials is seamless, and they’ll be delivered directly to your job site, saving you time and effort. If you’ve struggled to source the materials you need and/or want to start your business off with a reliable supplier, explore what Biiibo has to offer.

2. Labour Shortages

Challenge: The trades industry is known to have labour shortages that leave businesses struggling to fill positions.

As your business grows, so will your need to hire more employees. The lack of qualified trades workers can lead to longer project timelines, reduced productivity, and increased pressure on existing staff affecting the overall quality of work and increased costs.

Solution: Begin by retaining your current employees by creating an inclusive workplace that offers competitive wages, benefits, and growth opportunities.

This type of environment not only keeps your existing staff happy but also attracts new talent. Next, optimize your on-site capacity by letting Biiibo handle your building materials procurement and delivery. With Biiibo, you and your crew can stay focused on the project rather than getting slowed down by material runs, especially during labour shortages. Additionally, consider implementing apprenticeship programs within your company to develop a pipeline of skilled workers trained by you. Explore programs like the Ontario Youth Apprenticeship Program (OYAP) to fill employee gaps in your workplace while providing students in grade 11 and up with hands-on experience in the trades. Take a look at our Small Business Starter Guide for more information and resources on how education can help your business.

1. Transportation and Fuel Costs

Challenge: Material runs are a common aspect of running a business in the trades, but the costs of those runs can add up quickly.

Frequent trips to and from job sites can put wear and tear on vehicles, leading to increased maintenance needs, higher repair costs, and a reduced vehicle lifespan. The rise in fuel prices further heightens the issue, increasing the overall cost of each trip. Additionally, the time spent on the road can disrupt workflow, reduce billable hours, and ultimately cause project delays.

Solution: Stay on-site, avoid the extra costs, and reduce your vehicle wear and tear by using Biiibo as your building material supplier.

Biiibo will get you the building materials you need, delivered directly to your job site when you need it. This eliminates the need to leave the job site for those costly last-minute runs.

Navigating the challenges of starting and running a business in the trades requires careful consideration of various factors, from labour shortages to health and safety concerns. By implementing proactive strategies and leveraging streamlined solutions like Biiibo, businesses can overcome these obstacles and thrive. With dedication and adaptability, your trades business can continue to grow and make lasting impacts on your industry.