I have an audacious goal for this year. I’d like to see it become the year we see a shift in the public perception of the construction industry.
Did you know the buying public doesn’t think very highly of contractors? They don’t trust us. They think we are dishonest and undisciplined, we overcharge for our work, we don’t return our phone calls, and we show up late for appointments. Our jobs are always a mess, we never finish projects on time, our radios are too loud, we smell like cigarettes, and we swear like sailors. Other than that we’re a pretty good bunch of people.
Now, I know those are just stereotypes, but we have to admit that all stereotypes have a nugget of truth in them.
Did you ever see the movie Tin Men? It came out in 1987, and I thought it was one of the funniest movies ever made. (Baltimore, 1963. Richard Dreyfus and Danny DeVito are rival door-to-door aluminum siding salesmen, willing to do almost anything to make a sale.)
It’s a great comedy, but there’s a lot of truth in the movie. I knew tin men back in the day. They were shady and undisciplined, walking a fine ethical line to make a sale, and sometimes they fell on the wrong side of that line. What they did was, for many, considered acceptable practice. They’re one of the reasons we are stereotyped the way we are today.
We don’t have many tin men anymore but we still have the image, partly because there are two types of contractors who echo the stereotype. One type is the dishonest schemer. I personally believe they are a very small percent of the industry but it only takes a few to make everyone look bad.
The other type is the contractor who wants to do the right thing, whose heart is in the right place, but they end up in a financial hole and start cutting corners to pay the bills. They get in a financial hole because they know their trade but they don’t know how to run their business. Trying their best, they guess at how to price their jobs, or they use what they think is the “industry standard” of 10 and 10.
It only takes a few jobs at a price that’s too low to start getting behind, and it mushrooms from there. Some contractors hold on for 3-4 years (some even longer) before they file for bankruptcy (or just walk away). Others fold up in 6 months to a year. Regardless of how long the contractor is in business, the last few clients are the ones who really get the short end of the stick.
The only thing we can do about the dishonest contractors is call them out. For example:
- If you see a contractor working without a permit, turn them in.
- If you give a quote on a job and the client has another quote that’s way too low, educate your client on what that might mean. We discuss some of that in this blog post.
- If you see a job site with junk piled around it, especially if the junk hasn’t moved in a few days, ask them to clean it up. Explain that it gives all of us a bad name. (Make sure it’s a job site first.)
The other contractor, the one who wants to run their business right but doesn’t know how? The first thing to do is to make sure it’s not you. Make sure you’re doing everything you can to run your business correctly. Don’t become part of the race to the bottom.
- Learn how to estimate jobs accurately so you aren’t surprised by higher job costs that eat into your profit. (Related blog post, Create Accurate Estimates)
- Calculate your markup, the correct markup that will give you a net profit on every job. Then use it, on every job. (Related blog post, How to Calculate Markup)
- Polish your sales skills and learn to sell yourself first, your company second, and a profitable job third. (Related blog post, Who Asks the Questions?)
- Know when to walk away from a client who will only cause you problems and cost you money.
Then do what you can to lift the rest of the industry.
- When you run into a fellow contractor who you think might be headed for trouble, suggest they read Markup and Profit Revisited. (Did you know we offer a quantity discount for books purchased off our website?) Tell them to subscribe to our newsletter. Share what you know.
- Educate potential clients on how jobs are priced. Explain that the price of any given job is largely determined by the design of the job and their selections to be used. And suggest they read this article on why contractors need to charge a reasonable price, How Much Should a Contractor Charge?
It takes a long time for a stereotype to die. It takes even longer when there are real-life examples that make a stereotype the truth. Let’s do what we can to change the way we’re seen by the public by having fewer and fewer real-life stereotypes in our industry.