Part 001: Business Basics Series
A couple months after we launched our business, and I obtained my contractors license, I sat down with one of my former employers to glean some wisdom from his previous experience as a residential contractor. (As much experience as I had, there was, and is, still so much to learn about this thriving trade, and I couldn't do this alone. This industry is competitive, and I had reached out to several successful contractors in our area, with no response.) He agreed, and I took him to lunch.
"No work is better than bad work," he said. It still resonates with me.
More often then not, bad work is a reflection of a poor understanding and execution of a proper markup and profit on your estimate and the job. Most people who decided to start a construction business know the trade skill well enough to develop a business. The success of that business is what remains questionable. Bad work is not necessarily limited to the quality of work and your skill, but also in your ability to run a site, manage employees, how you communicate with your clients, managing finances, and/or your ability or maybe lack of, juggling multiple jobs at once. The scope of bad work and all its entities now consumes you. Playing catch up, dropping jobs, getting fired, not being able to pay your subs becomes overwhelming, and you turn in to the exact kind of contractor that this industry can be known for: unreliable and untrustworthy. Your business will not last if you don't do the correct mark up and profit.
"No work is better than bad work, " he said.
You get into this industry because you're great at a trade. You invest close to everything, and build a business from the ground up. You talk to a few potential clients, and they are astounded by your estimates. You're too expensive. You start to question your markup, your prices, your sanity. Defeated, you lower your estimate to appease the client and get the job...the work. Except, not having the right amount of money to fund your project for your client, can get troublesome. Something will have to lack in order to break even. You must continue the work, for your business and for your clients' investment. Your final product looks good, but not great. It doesn't reflect your true passion to "WOW!" your clients. And, on to the next client...with the same mark up and profit. Before you know it, you're in the red and you're missing out on why you started in the first place.
"No work is better than bad work," he said. Stand for what you're worth.
It's often a misconception of the industry, and why we mark up our estimates, our labor, but we are worth it. If you provide a great product, are honest with your clients, and respect the industry, chances are, business will be there and there will be clients who trust you and pay you for your work, and your worth. More often than not, and having deeper conversations about estimates and mark ups, many clients don't understand or know the amount of time you spend; drawing up plans, exchanging emails and meetings with engineers and architects, writing estimates, waiting for permits to go through, meeting and hiring subcontractors, following up with subcontractor(s) work, meeting all mandatory requirements for being a contractor and staying licensed, paying fees...the list goes on. If you've done your research on your trade, continue to calculate your mark up and adjust when necessary, and craft your skills, your estimate is good. Maybe even good enough. Someone will say yes...don't compromise your passion and values. Better to wait for the right job that will keep your company sustained and running. There will always be work for hire, people needing new homes, kitchens remodeled. Your work is good, your mark up and estimate should reflect that.
"No work is better than bad work," he said. And he could not have said it any better.