Management Talk

In 2006, we logged more than 1,600 phone calls, most from contractors like you. We hope we provided the kind of service that we ask you to give your customers. If we did, please let us know. We like to know when we do something right. If you feel we let you down in some way, again, please let us know. Give us a chance to try and fix it. We are not perfect by any means but we try our best.
Speaking of phone calls, when you pick up the phone, you never know who is going to be there or what they will want. So may I remind you to always put a smile on your face when you answer the phone? A smile shows in your voice, and it is contagious. It will almost always extract a positive response from the person on the other end of the line. If they are having a bad hair day, consider yourself a world-class hairdresser. Help them turn their day around.
Last year, we heard about the usual issues that have plagued contractors of all types for years. The big issues continue to be not charging enough for the work they do, not writing change orders, writing contracts without key language, not writing contracts at all, and a host of smaller items. If you read this column on a regular basis, or have been reading our blog, then you have already read about my response to these issues.
But I have noticed recently that many of our callers have a tendency to not respond to a situation, instead they want to think about it long and hard, sometimes too long and way too hard. For example, I worked with a coaching client recently with a job superintendent who is doing everything contrary to the way the owner wants it done. He is abusive to fellow employees, misusing company credit cards, not getting jobs done on time and always has an excuse. He doesn’t always exhibit good communication skills, especially with the customers. He also likes to pull a cork a little too often.
The owner has watched this guy get steadily worse. The owner thought that as long as the guy was making things happen and the company was making money, he could work with him and turn him around.
In some instances, this approach might work. But for me the key issues were the abuse of fellow employees, misuse of the company credit card and the drinking. I believe when you have any or all of these issues, you are dealing with an employee with personal or emotional problems that must be dealt with as soon as they appear.
You can teach customer relations skills, communication skills, job scheduling, how to build the job, and just about anything else needed to successfully do the job. However, when the problem is the person’s own self concept, you must step in and force a change or send the person on to your competition. The sooner you make that move the better. Don’t spend too long mulling it over.
Fortunately this contractor has our employee manual in place and the job super has signed it. That doesn’t mean it will be easy — the superintendent is the type of person that could become vindictive and badmouth the company if they are fired. That also must be dealt with.
An ounce of prevention is worth a pound of cure. When you see a problem today, it will seldom be better tomorrow. You need to step in, make a decision and act on it. If you are unsure of the situation and how to address it, give us a call.
Another coaching client called in with a big, big problem. His average job size is in the $60-80,000 range. He now has the opportunity to do a job in excess of $350,000. He was nervous about doing a job this large.
Remember — a large job is a series of smaller jobs, end to end. So don’t worry about the size of the job, be more concerned that you can get a good contract in place. That contract should have a payment schedule with a down payment and then progress payments about every two weeks. Remember, the final payment should not be more than 2-5 percent.
I received an email recently from an architect chastising me for things I had written about architects. She had valid points about things I said and how I suggested contractors deal with architects.
Given the opportunity, I would rephrase parts of that article. I have heard from several architects that were miffed to say the least. So, to all architects everywhere, my apology for the terms used in the article. I could have chosen a better way to say some things.
On the other hand, I will stick to what I said, just as I told the lady who wrote in. Almost every day, I hear from contractors who are being screwed over by home or building owners, architects, and designers. Unless you have been a mouse in my pocket and listened to the incoming calls I get, you have no idea what lengths some people will go to try and take advantage of contractors.
If you are a contractor, you need to establish the parameters under which you will work. This includes setting your own price, and making sure the price you set allows you to cover all your overhead and make at least an 8 percent profit.

Michael Stone is a business coach and consultant with more than three decades of experience in the construction industry. He wrote the book Markup and Profit: A Contractor’s Guide, published by Craftsman Book Co. For Michael’s free newsletter, sign up at www.markupandprofit.com. Michael also is an experienced speaker and is available to speak at conventions and workshops. He can be reached by email at michael@markupandprofit.com, by phone at 888-944-0044, or on the web at www.markupandprofit.com.

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