Take it beyond "satisfying" customers. Satisfaction means doing what you're paid to do, i.e. competent workmanship, on time and at the agreed price. The best companies strive to go beyond that by making the experience memorable for the customer with services that are not expected. It's not enough to satisfy customers. You need to dazzle them.

Everyone has the right to expect a job done right and on time. However, most construction clients don't expect to be treated with uncommon courtesy. For instance, they don't expect everyone they speak with from a contractor's organization to be polite, cheerful and helpful at all times. They don't expect follow-up calls after the job asking how everyone performed. They don't expect a thank you card and gift after the job is done.

It doesn't make any difference how big you are, what's important is whether customers like doing business with you. Quit worrying about the competition and the home centers. Constantly zero in on ways you can better serve your customers and you'll do fine.

Study the success of others.

Most contractors pay far too much attention to the lowballers in their market. "How can that guy bid the job so low ... How can I compete against him?"

Ignore the bottom feeders. Analyze what the most successful firms in your market are doing. I bet you'll find that they turn down a lot of work and focus on niches that they do best. Check out their operations. There are few business secrets in the contracting business. You can learn a lot simply by listening and observing. Many times, you can simply ask a fellow contractor how he does certain things, and he'll tell you. Smart competitors ask a lot of questions and keep their eyes wide open.

Don't only learn from them, make friends with them. Success has a way of rubbing off. You don't see successful people hanging around with losers. Join the same trade associations and community groups that the winners belong to. Volunteer for their projects. Do them favors. Hang around with successful people, and pretty soon you'll find yourself sharing in their can-do attitude. Plus, you'll meet other successful people they hang around with.

Gather and analyze management information regularly.

Some contractors don't even know what a financial statement is. It's a running tally of revenues and expenses, broken down into as many distinct line items as possible.

Any business owner that doesn't see an updated financial statement and study it at least monthly is at risk. You need to be able to identify potential problems before they flare up beyond control.

You also want to continually update and improve upon your customer database. And while you're at it, find time to read the trade magazines to keep up with industry trends, and with local business publications to stay abreast of what's happening in your market.

Sharp business managers concern themselves with the big picture. Let your subordinates put out the day-to-day fires.

Sharpen marketing skills.

Marketing issues include pricing, product offerings, advertising and promotion, and larger strategic concerns such as your business location and expansion plans, as well as how you stack up against whoever you perceive to be the competition. All of these are important but you have to decide what to focus on at any given time.

Keep your antenna aimed at what customers are most sensitive about. It's not always the price of a job. On big commercial/industrial projects, a contractor's safety record often is of major concern. If your firm has a sterling safety record, that can be turned into a marketing edge.

Increase the customer's perception of value.

There are two ways to compete against the bottom feeders. One is to join them in scouring the muddy bottom for business with reduced prices. The other is to increase the value you deliver in order to justify a higher price. Offer better quality, more bang for the buck, breathtaking guarantees.

Notice how many ads you see touting "100 percent satisfaction guaranteed?" It shows confidence and sets the client's mind at ease. If you're afraid to make such guarantees, you probably don't belong in business.

Find a niche that's a good fit.

If you aren't one of the big guys, don't try to act like them. You can't be all things to all people. Some customers will never call you, nor would you necessarily want their business. Some kinds of jobs just don't mesh with the expertise of your field crews and supervisors.

Take advantage of your small size by positioning yourself in areas where big businesses are handicapped, places where friendship and customer bonding opportunities arise.

Eliminate waste.

Keep a budget-and keep to it. Constantly compare your budgeted figures with what you actually spend and watch where costs are getting out of hand. (That's why a monthly financial statement is critical.) Every dollar saved from operating costs goes directly to your bottom line.

Don't forget that time is money. Even though it may not show up in your budget, every minute you waste in unproductive activities entails an opportunity cost. Be careful not to live the slogan "penny wise, pound foolish." It may be wise to actually increase spending in some areas. Don't pinch pennies by hiring employees who work cheap or by shaving advertising to the bone.

Just because a company is small doesn't necessarily mean it operates lean. Some small firms squander more money as a percentage of revenue than large firms. For instance, some small family businesses keep certain relatives on the payroll even if they're not pulling their weight. Big corporations often have bloated overhead from unneeded or under-performing personnel but one or two extra salaries don't hurt them as much as they will a small contracting business.

Find something to improve every day.

Make it a goal to improve one aspect of your business every day, even if it's something tiny. Maybe it has to do with the way you answer the phones or eliminating a few dollars of unnecessary expense. Little by little you will find your business shaping up to an ideal standard.

Develop a positive attitude toward change.

It is human nature to fear change. Even if they are dissatisfied with their lives, most people are more comfortable with the status quo than they are trying to achieve dramatic changes.

A friend of mine operates a small remodeling business. They didn't even use a computer until a few years ago. The main reason was because an older family member was in charge of bookkeeping and didn't want to learn how to use it. I suspect stories like that abound in your business, as well.

Like it or not, dramatic changes are underway in your industry. You cannot turn back the clock or wish away the profound changes taking place. So you might as well try to figure out instead how you can best fit into the industry's changing landscape.

Avoid paralysis by analysis.

To many people, business decisions are a matter of "ready, aim, aim, aim ..." At some point you must decide that you have all the information in hand that you need to take action. Go ahead and pull the trigger rather than wait for the perfect moment that never comes. If your decision doesn't give you perfect results, adjust your aim and fire again. Anyone who hasn't made mistakes in business isn't taking enough risks.

It's unwise to rely completely on gut feelings for every business decision but equally unwise to pretend they play no part. Most business decisions are really nothing more than informed guesses. It's good to make yourself as informed as you possibly can within a reasonable time, but even then there are no guarantees of success. Some decisions turn out wrong for reasons beyond your control. So just do it.