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Of the questions I am asked by contractors, "When is it time to grow?" certainly ranks in the top two or three. Trying to hold back my disbelief at the question I want to answer (but I normally don't!), "When is it ever time NOT to grow your business?" Now before you consider me too cynical or arrogant, let me share my perspective on this very important aspect of being a successful contractor.

First, for any contractor to purposely NOT be focused on building their business is just short of committing economical suicide. Even for those contractors who do not have a formal business plan or financial goals, most still strive to be successful. Seeing your sales and profitability figures increase is simply an obvious form of measurement if you are growing.

The question asked by many contractors does not come from business owners who are simply looking for an easy formula to long-term success and security. Most contractors take their futures very seriously and want to be competitively positioned in the marketplace. Thus, they are sincerely interested in recognizing when it is time to go beyond the "wait for the phone to ring" response to growing business.

What are some of these contractors asking then? Well, I think what they are really driving at is how do you know that it is time to plan for growth, purchase new or more equipment, add another estimator, or take on more debt to subsidize the business until sales picks up?

Asked from this last perspective, there are several indicators you should consider before realizing that it is time to grow your business. First, look at your profit margins. Are they increasing or are you making less money than in the past?