Surviving & Thriving in a Contracting Market: A Guide for Small Business Owners

The Market is Changing – Are You Ready?

Over the last few months, we’ve been getting a lot of calls from clients—current and potential—who are feeling the strain of 2025’s contracting market. The economic shifts post-COVID were inevitable, and while they may not signal doom and gloom, they certainly pose new challenges for businesses, especially in the home services industry.

At SteelToe Digital, we’ve worked with businesses of all sizes, from small startups to multi-million-dollar enterprises. One common thread we’ve seen? Many businesses that thrived during the boom years are now struggling to stay afloat. The difference between those who survive and those who don’t comes down to adaptability, strategic positioning, and a willingness to invest in the right areas.

If your business is slowing down, if you’re finding yourself competing only on price, and if you’re unsure how to stand out in this new market, this guide is for you.

The Boom & Bust of Home Service Businesses

During COVID, home service businesses exploded. People were spending more time at home, receiving stimulus checks, and investing in home improvements. The demand was through the roof.

At SteelToe Digital, we built countless websites for land management and forestry clearing businesses. It seemed like everyone with a credit score and a skid steer was suddenly launching a land management company overnight.

One client, a contractor who had never struggled to get work, told us:

“I didn’t even need marketing. I was booked out for months, just from referrals and Facebook Marketplace.”

Back then, it was simple—if you had availability, you had work. People were hiring on the spot just to get on a contractor’s schedule. The big guys were so booked up that smaller businesses saw a trickle-down effect, keeping everyone busy.

But fast forward to 2025, and that world no longer exists. Facebook Marketplace is full of skidsteers and forestry attachments for sale. Those same small business owners are now saying:

“People are getting three or four estimates before deciding, and I’m getting undercut by guys who will do the job for half the price.”

The easy jobs are gone, and suddenly, business owners who thrived on word-of-mouth are struggling to survive.

The Reality Check: Did You Really Have a Business?

Many business owners who thrived during the pandemic are now facing a hard truth:
They didn’t actually have a sustainable business.

A real business isn’t just about being busy. It’s about having a repeatable process for customer acquisition. If your entire business was built on referrals and word-of-mouth, you were relying on luck, not strategy.

Take it from another client we spoke with:
“I’ve always relied on referrals. My work speaks for itself. But now, my phone’s not ringing like it used to.”

Here’s the problem—referrals aren’t predictable.
You might do an incredible job on a kitchen remodel, but unless the homeowner has a friend actively looking for a remodel, that referral won’t turn into a new job.
That’s not a business strategy—that’s hope.

The Danger of Competing on Price Alone

Now that the market has shifted, small businesses are being forced into price wars.
A business owner we recently spoke with put it best:

“I gave a fair quote for a job, and the client said, ‘Well, I got another guy who’ll do it for $500 less.’ But I know that guy doesn’t have insurance, doesn’t have overhead, and probably won’t be around next year.”

This is the “Chuck in a Truck” problem.

If your only way to compete is to lower your prices, you’re on the fast track to burnout. Here’s why:

• There will always be someone cheaper. If price is your only differentiator, you will never win long-term.
• Cheap customers = high maintenance. They expect top-tier work at bargain-bin prices and will nickel-and-dime you on every decision.
• You can’t reinvest in your business. If you’re not making a strong margin, you have nothing left over to improve, market, or grow.
A business built on “lowest price wins” isn’t a business. It’s a job with extra stress and no benefits.

Why the Big Players Are Winning (and What You Can Learn from Them)

Think about high-end truck brands like GMC. They make $100,000 trucks. And guess what? People buy them.
We were recently in the market for a truck and spent months researching. During that time, we saw so many online comments like:

“Who in their right mind would spend $100K on a truck?”
Here’s the thing—the people complaining aren’t the target audience. And GMC doesn’t care. They know their customers and market directly to them.
Your business should operate the same way.

The big players in home services aren’t winning because they’re the cheapest. They win because:

They invest in branding and customer experience.
They show up on time, answer their phones, and deliver exceptional service.
They market consistently, even when they don’t “need” to.
They know their ideal customer and price their services accordingly.

How to Adapt and Position for Success in 2025

Here’s the truth: The market isn’t going to return to the COVID-era boom anytime soon. You need to adjust now if you want to survive—and eventually thrive—when the economy rebounds.

1. Identify Your Ideal Customer

Not every customer is YOUR customer. If someone only cares about price, they aren’t the right fit for you. Instead, focus on customers who value expertise, reliability, and quality service.

2. Invest in Your Brand

Your brand is more than just a logo. It’s the entire experience customers have with you—from the moment they find you online to the moment they leave a review. Build a brand that attracts the right customers, not just any customers.

3. Stop Avoiding Marketing

Marketing isn’t a luxury—it’s a necessity. The businesses that double down on marketing during downturns are the ones that explode when the economy turns around.
At SteelToe Digital, we’ve seen it firsthand. The companies that invested in SEO, digital ads, and brand awareness during the downturn are now miles ahead of their competition.

4. Know Your Numbers

• What does it cost you to acquire a customer?
• What’s your profit margin on each job?
• How much do you need to charge to be profitable AND reinvest in growth?
If you don’t know these numbers, you’re flying blind.

Final Thoughts: Your Next Steps

If you’re feeling stuck, overwhelmed, or unsure of how to grow in today’s market, you’re not alone. The good news? You don’t have to figure it out by yourself.
At SteelToe Digital, we’ve helped businesses just like yours scale, survive downturns, and build long-term success.

Need a strategy? We’re happy to help.
Not sure how to market effectively? Let’s talk.
Want to stop competing on price and start attracting the RIGHT customers? We’ll show you how.

This is a pivotal moment for your business. Make the right moves today, and you’ll be miles ahead when the market turns around.

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Interested in Growing Your Market?

Steeltoe is ready to help you grow your business by making your digital presence bigger and easier for people to find. Reach out to us by filling out the form below and we’ll get back to you as soon as possible: