An email note:
“Michael, I’m not a seasoned remodeler but I love doing it and refuse to go back to riding the book of insecurity. Do your programs cover these questions? How do you hold a positive frame of mind when you’re constantly made to feel unworthy of a decent living by your customers, attacking your already low prices? I have tendonitis, carpal tunnel, cartilage deterioration in both knees, a bad back, and I still bust my a** pouring sweat and blood into every job.”
I hope he understands he’s not alone. Many contractors feel the same way. Construction is a tough business, dealing with clients who don’t think we’re worth what we’re paid while our bodies take a beating to make their homes better.
There is a famous prayer that states, “Give us the serenity to accept what cannot be changed, the courage to change what can be changed, and the wisdom to know the difference.” He obviously isn’t willing to accept the way things are, and that’s good. I see three things that can be changed: his frame of mind, the clients he sees, and way jobs get built.
He asks, “How do you hold a positive frame of mind when you’re constantly made to feel unworthy of a decent living by your customers, attacking your already low prices?”
Don’t forget that you’re the one who sets the price. If you have an idea that your prices are too low, you’re probably right. So raise them. I’ve said many times in my classes that every person in the room could raise their prices at least ten percent or more and it wouldn’t affect their sales to leads ratio one bit.
When you know what price you need for a project (namely, the price that covers your job costs, pays your overhead and gives you a reasonable profit), you can have the confidence that it’s the right price. When it’s the right price, it doesn’t really matter what the customer thinks; if they want to pay less, they need to find someone else to get the job done.
Think also about this. There are more people today than there were ten years ago, more homes that need work or buildings to be built, and fewer contractors. So why are you cutting your prices? There is more demand for your services and you want to lower your price?
Your frame of mind will improve when you stop believing that you have to be the lowest-price contractor for any project and instead start focusing on the value you bring to the table. Learn to sell your value, not your price. When you realize your value, and your clients recognize that value, you’ll both know that you’re worth that price because of what you’ll provide.
Of course, not all clients will want to pay for value, which is why you’ll probably also have to change the clients you see.
Change your advertising. If you’re advertising free estimates, you’ll attract clients who are shopping for the lowest price. Instead spend time identifying your ideal client. Where do they live, what do they do? What kind of buildings, what kind of projects? Your ideal customer will know what they want and they’ll understand they must spend money if they want a good job done by a reputable contractor. They’ll be reasonable to work with, they’ll respect you as a business owner and they’ll let you do your job. Most importantly, your ideal customer won’t try to figure out ways to cut your price or screw you out of the money you’re due for the work you’ve done. When you know who your ideal client is, start advertising with them in mind.
We also need to talk about the physical aches and pains, another problem many contractors can relate to. Trust me, it won’t get better. In the past 15 months, I’ve had work done on my back to relieve compressed nerves, a steroid shot in my right shoulder to relieve severe pain, and knee surgery to repair a meniscus tear. In a class this March I raised my left arm to point at something and experienced sudden shoulder pain that required me to keep my hand in my pocket until it subsided. On a recent outing with the family, I pulled off my sweatshirt and something cracked in my right elbow, causing pain for the next few days.
Our bodies take a beating, and you won’t be able to do it forever. If you’re getting older and your body is starting to wear out, or if you’re young and want to prevent too much damage, then it’s time to look at alternative ways of conducting business.
Consider hiring subs and employees to get your jobs built so you can put down the hammer and supervise instead. If you’re just tired of business, hire yourself out to owners as a job superintendent; we discuss this briefly in Chapter 4 of the book Markup and Profit Revisited, and it needs to be handled carefully, but it can be done.
Another alternative is to close up shop and hire out to another contractor looking for a job superintendent. Only do this if you’re going to be honest about it. Too often, former contractors use their job in a new company to find clients so they can do work on the side. If you’re good at your work and honest in your dealings, your employer should love you forever. If you’re not honest, you only have yourself to blame when they fire you and you’re out working on the jobs again.
You asked if our books would help. They sure will. You’ll understand how to set your prices so you aren’t scratching to pay the bills, and you’ll learn how to sell yourself, not your low price. We can’t fix torn or broken bodies, but we can darn sure help fix broken businesses. May the profits be with you.