Business techniques and skills utilized by small residential contractors with one to four employees in six high growth areas of Texas

The purpose of this study was to determine those business techniques and skills utilized by small residential contractors in Texas with one to four employees. A mailed questionnaire was used and involved 60 residential contractors with one to four employees, 10 each from the established growth areas of San Antonio, Houston, Fort Worth-Arlington, Austin, Bryan-College Station, and Dallas, Texas. The contractors were selected from local home builders associations which were affiliated with the National Association of Home Builders. Little information existed with regard to business techniques and skills for small residential contractors. However, business techniques and skills for both commercial and heavy-and-highway construction were well documented and were instrumental in developing the questionnaire used. The questionnaire elicited from small residential contractors with one to four employees a listing of the business techniques and skills they utilized, the relative importance of these skills, and their frequency of use. Over 70 percent of the sample returned completed questionnaires and agreed that the 26 items listed were valid business techniques and skills for small residential contractors. Sixteen items were considered very important: estimating a job, scheduling a job, directing and controlling a job, selection of subcontractors, quality of workmanship, dealing with personnel, written contracts, use of professional services, importance of customer service, understanding finance, use of a general ledger and journal, maintaining current financial records, double entry accounting system, estimating cash flow, dealing with the lender, and maintaining separation of business expenses from personal living expenses. Twelve of those skills were used on a daily basis. The information gathered from the literature and the data collected from the questionnaire established the need for the use of business techniques and skills by small residential contractors with one to four employees. The findings have potential for curriculum development for residential construction, in-service training programs, use by the Small Business Administration, and as a source of information for independent entrepreneurs in residential construction.