Contractor Referral Service Business Plan, Marketing Plan, How To Guide, and Funding Directory
The Contractor Referral Service Business Plan and Business Development toolkit features 18 different documents that you can use for capital raising or general business planning purposes. Our product line also features comprehensive information regarding to how to start a Contractor Referral Service business. All business planning packages come with easy-to-use instructions so that you can reduce the time needed to create a professional business plan and presentation.
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Contractor referral services have become very popular Internet-based businesses given the fact that people are always looking for a good contractor. It is no secret that many people have somewhat of a negative view of the overall construction contracting industry, and as such – contractor referral services have grown in popularity especially among contractors that are very legitimate businesses and want to provide great services to the general public. The startup cost associated with the new contractor referral service are relatively low given that most of these businesses are developed as Internet-based companies. The startup cost typically range anywhere from $50,000 to $200,000 depending on the scope and scale of the marketing that will be used at the onset of operations.
The technology that is used to develop these types of platforms is very much within the public domain, and these businesses can be created relatively quickly. One of the keys are thriving within this industry is to be able to provide services very quickly to contractors within a specific target market. In fact, many of these businesses actually start off as local and regional businesses before rolling out to a national level.
The gross margins generated from revenues is typically around 90% to 95% depending on what forms of payment are accepted and whether or not bad that that expense is included as part of the cost of goods sold. These businesses tend to generate highly recurring streams of revenue not only from users but also from enrolled contractors as well. There is also substantial opportunity to provide advertising on these web platforms.
Given the low start up costs and few tangible assets, most financial institutions typically stay away from providing capital for these types of businesses until they are about two years old. The vast majority of contractor referral services are started with capital provided by the owner or from a private investor. In any event, a contractor referral service business plan is going to be required. This business plan should feature a three-year profit and loss statement, cash analysis, balance sheet, breakeven analysis, and business ratios page.
The demographic profile of the business should focus not only on contractors that want to enroll their business with the contractor referral service but also among users that will use the company on ongoing basis. One of the key determinations for the entrepreneur that is starting is that the company is to determine who the end-user will be from a payment standpoint. Some contractor referral services actually accept payment specifically from users in order to have a complete alignment of interests between the business and its user base. This is a determination that can only be developed by the entrepreneur.
A contractor referral service SWOT analysis should be produced as well. As it relates to strengths, these businesses are able to generate highly predictable and highly recurring streams of revenue not only for membership fees but also from advertising. The barriers to entry are very low.
For weaknesses, there is already a substantial number of competitors within this field. As such, it is incumbent upon the entrepreneur to develop marketing campaigns and service strategies that differentiate this business from that of other competitors within the market.
As it relates to opportunities, contractor referral services can readily expand by simply increasing the scope and scale their marketing budgets. Is it really the only way that these companies expand given that they are Internet-based businesses.
There are no known threats as it relates to how these businesses are able to conduct their operations online. The greatest threat faced by these businesses is a massive economic recession and ongoing competitive issues.
A contractor referral service marketing plan also needs to be developed and this is going to be one the most important aspects of the overall business planning process given the amount of competition within this field. A large-scale search engine optimization as well as a pay per click marketing campaign needs to be implemented in order to have people find the website very quickly. Additionally, prior to the onset of operations many contractor referral services will enroll individual contractors on the website free of charge.
This allows people to come and see a number of contractors immediately without having to scale into a large-scale marketing campaign. A social media consultant can also be hired in order to ensure that the business can be very quickly found among users of platforms including FaceBook, Twitter, Instagram, and LinkedIn. This is one of the quickest ways for having these businesses become profitable given the fact that people are always looking for contractors to complete home improvements and repairs. The cost of hiring a social media consultant is relatively high, they can actively assist the entrepreneur in minimizing the amount of mistakes are made when using these types of platforms in order to reach their initial audience.
A contractor referral service is always going to be a popular business given the fact that people want to find honest and competent electricians, general contractors, roofers, HVAC contractors, mechanical engineers, and related trades people that will assist them with the improvement of their homes and commercial structures. These businesses have very high margin revenues that can produce very recurring streams of profits. These can be highly lucrative businesses that can be worth substantial sums of money once they reach profitability.