Why some avoid clients seeking multiple bids, cheap prices

Bill & Kevin Burnett
Inman News

Recently we relayed a reader’s request for help. She was having difficulty finding a contractor to do some work on her home in Vallejo, Calif. Seems she couldn’t find people who would show up when they said they’d show up, charge what they said they’d charge, and do what they said they’d do.

Our suggestion was to seek referrals from family, friends, co-workers, real estate agents and members of organizations to which she belonged. Our readers added Internet sites, homeowners associations and the Better Business Bureau to the list. Another reader suggested the National Association for the Remodeling Industry Web site.

Not surprisingly, we also heard from contractors. Generally, they acknowledged the problem but offered a different perspective. There were some common themes revolving around time and money. One respondent was especially candid. He requested to remain anonymous. We invite our readers to walk a mile in his shoes. He writes:

“I am a home-improvement/small jobs general contractor. I won’t give my name; I am not looking for work. Here are a few tips from the other side of the table.

“As you said, we can cherry-pick our jobs. Here’s what I look for: Do the clients come across as trustworthy? This is a trust industry, not a product or a service industry. If you are going to hire someone to come into your house where you have kids, pets, valuables, etc., you must trust them. If the lead doesn’t seem trusting, it makes my job very difficult. Low priority.

“Where did you get my name? If they say the Internet, or an advertisement or the like, I rate the lead very, very low. If they know me and my work, they will know to trust me without my having to convince them.

“I almost never work for clients who get multiple bids; it’s a huge waste of my time. If I am going to put, literally, hours into a bid, why compete when the market doesn’t require me to?”

Regarding the paucity of skilled tradespeople, a construction superintendent for a large contractor claiming 35 years of construction experience in the San Francisco Bay Area hit the nail on the head. He wrote:

“Our society does not honor or respect skilled physical labor. There are very few young men or women who seek careers in the construction trades. The best and brightest of our future leaders do not seek careers in the construction trades.”

We agree. Doctors, lawyers and computer programmers all seem to rank above the tradesperson in the social hierarchy. The ironic thing is that we have plenty of doctors, lawyers and computer geeks, and too few plumbers, electricians and carpenters.

The superintendent continues: “A small, residential general contractor must be first and foremost a businessman or woman. Failure to cover your expenses, make a profit and allow yourself to hire new workers dooms you to a marginal income over time.

“The vast majority of the small, licensed, insured, bonded general contractors are men and women of integrity attempting to provide a service and provide a secure financial future for their families, exactly the same as you and I and every other businessperson on this planet.

“Factor in the high cost of living, health insurance and educating the kids, and it’s not hard to see that the small contractor is scrambling.”

Another construction superintendent offered this dose of reality:

“I’m your age (50s), and still think of $100 as a lot of money. It’s just not anymore. The ‘average’ worker costs (an employer) between $50 and $100 per hour. An average tradesman runs at least $500 a day. It used to be said that contractors added 15 or 20 percent for profit and overhead. That’s gone. Margins on larger jobs can be as low as 4 percent. Unless there is massive volume to offset the marginal profits, doing small jobs just doesn’t add up.”

He suggests ways the average homeowner can cope to get needed work done.

“Understand there is no ‘free’ estimate. The cost of visiting the job and performing the estimate has to be worked into the cost of the work.

“Next, there is a cost to everyone from selecting the too-low price. The last thing you want on your job is a contractor who is not making any money. When people realize what they are doing isn’t profitable, they take all kinds of shortcuts to make up the loss.

“If you sound like you know what you want, and it’s a clear, straight-up process, a contractor will be much more likely to spend the time bidding and communicating with you because they know it is more likely to be a successful job.”

The bottom line is to define and communicate the scope of the work. Change orders are expensive. And expect to pay a fair price. If you do this, you’re more likely to get a contractor to show up when promised, actually do the work you want and charge the estimated price.

Copyright 2008 Bill and Kevin Burnett

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