Should I Scale My Contracting Business… or Stay Small?

posted in: Plan, Process | 0
big boots to fill

If you are running a small contracting business, maybe it's just you, or perhaps you and a couple of subcontractors, it can be tempting to keep things small and not expand your business.

I hear it all the time... all the fear and trepidation that comes with growing a business beyond the size where you are Chief Cook and bottle washer.

"Hiring and managing employees is hard.... ",

"I don't want to be responsible for the financial well-being of anyone else... it's less stressful when it's just me..."

"No one can do the work like I do...."

"My customers want ME on the job..."

Ya, I get that... It is stressful managing people, but when deciding whether to grow your business or not, I think we need to look at "choosing your hard."  All aspects of owning and operating your business are hard - but there are risks and rewards associated with each business model.  You need to choose which risk and reward you can live with and supports your lifestyle.

Let's look at the pros and cons of growing and scaling your contracting business:

Staying a solo operation:


  • No people to manage - no production or performance to track
  • no responsibility to pay salaries, sick leave, holidays, insurance or benefits
  • no workers compensation
  • no training
  • no employee issues such as conflict, injuries, etc


  • you are IT.  Without you, there is no income, contracts get breached
  • burnout is real.  You wear ALL the hats.
  • you have to carry loss insurance - short term disability, wage replacement insurance
  • earnings are limited - there is only one of you, and there is only so much time - you will cap out
  • succession planning becomes difficult - if you are too intertwined in your business, you will likely liquidate when "all is said and done"
  • limited service range - your products and services may not reach as many consumers as you'd like when you are on your own


Growing and Scaling:


  • Unlimited earnings
  • Succession planning has many avenues such as selling the business to a 3rd party, selling to employees or creating a legacy business for family
  • you can have vacations and sick time


  • hiring, training, and developing employees
  • managing people
  • responsible for payroll, insurance and benefits
  • increased risk for employee issues such as conflict, injury, etc

Keep in mind, that these are generalizations.  Of course, there are always businesses that break the mold, but these are the most common scenarios in my experience over the last 15 years coaching contracting businesses.

No matter the size of your business, documented policies and procedures are still crucial:

At the end of the day, growing and scaling your contracting business is your decision to make.  One thing I would warn you against is "winging it."  People believe that because they stay small, they don't have to have standard operating procedures, contingency plans, or structure... when actually, the opposite is true.  When you are a small operation, it is imperative that you document processes, procedures, and documentation.  Should anything ever happen to you, someone will need to step in to manage what you have left behind - whether it is to settle insurance claims, omit errors and oversights, take over projects, or implement preventative measures.  The last thing you want to leave your loved ones is a mess they can't unwind.

As a solo operation, having documented processes and procedures is crucial for several reasons:

1) Consistency: Documented processes ensure that tasks are consistently performed each time they are executed. In situations where someone needs to demonstrate your methods in your absence, they can refer to your documented business practices. For instance, consider a scenario where an incident occurs at a worksite, and it falls upon your spouse to prove compliance for insurance coverage of your injuries. Having documented procedures would provide clear evidence of adherence to safety protocols and operational standards, facilitating the process of validation and claim settlement.

2) Back-Up Plan:  If you ever need someone to take over your responsibilities temporarily, having documented processes simplifies the transition and prevents disruptions in service delivery. This can be crucial for avoiding legal issues and maintaining customer satisfaction.

3) Delegation:  Should the need arise to hire administrative services having documented SOPs will help you get the most out of your labor/payroll investment.  Documenting your best practices also comes in handy when onboarding sub-contractors, day laborers, and temps for faster project completion.

4) Risk Management: Clearly defined procedures reduce the likelihood of errors, oversights, or compliance issues, thus minimizing risks to your business.

5) Professionalism:  Showing you have documented processes conveys a sense of professionalism and reliability to clients.  Even as a solo operator, you will be able to compete for larger contracts and jobs by demonstrating you are organized, systematic, and committed to delivering high-quality results.

6) Continuity: If anyone ever needs to step in in the event of illness, vacation, or other disruptions, you can transfer responsibility seamlessly with ease.

7) Valuation:  Businesses that have documented business practices, policies, and procedures tend to command higher resale values compared to those without such documentation.

Regardless if you decide to grow, scale, or stay the same, generally accepted business practices such as documented procedures and policies still apply.  Many people find growing and scaling their business to be not only rewarding but also safeguard them from placing all the stress, demand, and risk solely on their shoulders.  While managing people and navigating growth comes with it's own set of challenges, scaling also comes with it's own rewards including increased revenue, market presence, competitive advantage, efficiency improvements, access to capital, talent attraction, economies of scale, strategic partnerships, risk mitigation and personal fulfillment.  While scaling requires careful planning, execution and resource allocation, the potential rewards make it a worthwhile endeavor for many contractors.

Thinking about Growing and Scaling Your Contracting Business?

Don't worry - I've Got You... Let's Chat!

Follow Priscilla Hansen Mahoney:

Business Coach for Contractors

Business Coach for Contractors and Founder of Blazing Trails Coaching I help my clients “get out of their pickup trucks and on top of their businesses.” I specialize in working with skilled-trades business owners to help them streamline processes, train leaders, engage employees, and make their businesses efficient and profitable.