There is a common expression that "there is no honor among thieves". In the recent months I've begun to wonder if this applies to contractors. Here are a couple of scenarios that I have either been a part of or heard about in the past couple of months that have prompted me to write this article.
1. A contractor that I do work for called me the other day and told me that he is calling all of his subcontractors and asking them not to pass out their own business cards when working on a job for him. He said that recently some of his subs had been doing this and some of his customers were starting to bypass him and call the subcontractors directly.
2. The same contractor told me that he was recently subcontracting for another general contractor. While he was off site, his superintendent gave his business card to the customer that the work was being done for. When the general contractor that he was working for on the job found out about this he was livid. Because of this mistake on the part of the superintendent, the contractor may have lost hundred of thousands of dollars of business a year because the other contractor no longer trusts him and may not use him anymore.
3. One of the members of our Watch Dog Network recently contacted us and informed us that she had put in a bid to build a million dollar house for a customer. The customer told her that her bid was too high. The customer then proceeded to go on her company website and facebook page and find out which subcontractors she used. Then the customer contacted these subs and hired them directly to do the job cutting out the contractor completely. Fortunately for her, her subs were loyal enough to let her know what was going on. They even asked her if she minded if they took the job.
Here are a couple of thoughts about this:
1. Congratulations if you have subs, or are a sub, who is honorable enough to do what the above mentioned subs did. Most subs that I know would have taken the job and not said anything about it. However, as a sub it is always better to be loyal to the general contractors that use you on a regular basis. Yes you may be able to sneak in a couple of jobs here and there behind their back. And if you are loyal it may cause you to lose those jobs. But the jobs that you will lose if you ruin a good relationship with a general contractor far outweigh the couple of jobs that you could get away with stealing.
2. As a subcontractor when you go on a job for a general contractor you have to have the mindset that you are on that job working for and representing that general contractor. Some general contractors will ask for you to wear their uniform or t-shirts. Personally, when I am working on a job for a general contractor I avoid having direct contact with the customer. Even when the customer tries to have contact with me or ask me questions or make requests about the project, I direct them to the general contract. This might seem like an unnecessary extra step but it keeps the proper chain of communication and builds trust between myself and that general contractor.
3. As a general contractor it is a good idea to one, use loyal subs who are not just good at what they do but are also good people, two, don't make it public knowledge who you use as subs. Your subs are like a trade secret that gives you an edge over the competition so you should guard them like a trade secret.
Monday, September 27, 2010
Thursday, September 16, 2010
Team Part 2
A guy I know that owns a commercial construction company recently told his employees that he was changing their salary structure. He said that now that they would be making more money more would be expected of them. He also said that this would make their jobs "coveted".
Not the best choice of words, in my opinion. When you tell your employees that their jobs are coveted it implies that there is someone waiting in the wings to steal the job. While this may be the case, saying it doesn't exactly help to build employee morale.
But what does help to build morale, yes what does make your employees feel like their job is "coveted". The following list is a continuation of the things mentioned in the last TEAM article.
1. Pay! Ok, this is obvious so I wanted to get it out of the way quickly.
2. Stability. No matter how much money you are able to pay your employees it won't matter if it doesn't last. For example, in the HVAC business you might have your guys working 60 hours a week in June, July, and August. But in order for them to really value their job they have to know that they are going to be able to get at least 40 hrs a week in October and April. This means that you will have to be proactive and step up your advertising and marketing game to find work for them to do in these months. You might be able to live off of your profit from the busy season but come October all of that overtime money that they made in August is spent.
3. Appreciation. A little of this goes a long way. My favorite customers, believe it or not, are not the ones who pay me the most. While the high paying customers are necessary in order for me to stay in business, the best ones are the ones who are appreciative. The same goes for your employees. Yes, all you really OWE them is a pay check. But if you throw a thank you in there every now and then it won't kill you and it won't cost you anything either. As a matter of fact, it may motivate them to work harder which will make you money.
4. Dignity. Allow your employees to have some. No you can't write it off on your taxes but its still a good thing to give away. Give dignity and respect to your employees by allowing them to have some input, even if very limited, in business decisions. If you hire intelligent employees and you allow them to think for themselves and come up with their own unique ideas, they will exceed your expectations. However if you treat them like idiots and never allow them to think for themselves or have input then they will forget how to think for themselves and will act like idiots.
As the kids say "don't get it twisted!" Just because you own the business doesn't mean that you are the smartest one there. Usually the old guy with the leathery hands and the beard that you pay ten dollars an hour can out think and out work you any day. He just has a gambling problem and that's why he has never been financially stable enough to open his own construction business. But if you can put your ego aside and listen to what he has to say he can help your business make a lot of money. I used to work for this guy who owned a construction and land development company. He didn't know very much about construction or land development and he admitted this to all of us one day at a company meeting. However, he was a very good at finding talented smart people who did know a lot about construction and land development. As a result he spent most of the day in his office playing solitaire or on the golf course and he is a millionaire.
Your company is just like a TEAM. You are not the star player, you are the coach. Be good at recruiting talented people, treating them with dignity and respect, and getting the most out of them and you will make a lot of money!
Not the best choice of words, in my opinion. When you tell your employees that their jobs are coveted it implies that there is someone waiting in the wings to steal the job. While this may be the case, saying it doesn't exactly help to build employee morale.
But what does help to build morale, yes what does make your employees feel like their job is "coveted". The following list is a continuation of the things mentioned in the last TEAM article.
1. Pay! Ok, this is obvious so I wanted to get it out of the way quickly.
2. Stability. No matter how much money you are able to pay your employees it won't matter if it doesn't last. For example, in the HVAC business you might have your guys working 60 hours a week in June, July, and August. But in order for them to really value their job they have to know that they are going to be able to get at least 40 hrs a week in October and April. This means that you will have to be proactive and step up your advertising and marketing game to find work for them to do in these months. You might be able to live off of your profit from the busy season but come October all of that overtime money that they made in August is spent.
3. Appreciation. A little of this goes a long way. My favorite customers, believe it or not, are not the ones who pay me the most. While the high paying customers are necessary in order for me to stay in business, the best ones are the ones who are appreciative. The same goes for your employees. Yes, all you really OWE them is a pay check. But if you throw a thank you in there every now and then it won't kill you and it won't cost you anything either. As a matter of fact, it may motivate them to work harder which will make you money.
4. Dignity. Allow your employees to have some. No you can't write it off on your taxes but its still a good thing to give away. Give dignity and respect to your employees by allowing them to have some input, even if very limited, in business decisions. If you hire intelligent employees and you allow them to think for themselves and come up with their own unique ideas, they will exceed your expectations. However if you treat them like idiots and never allow them to think for themselves or have input then they will forget how to think for themselves and will act like idiots.
As the kids say "don't get it twisted!" Just because you own the business doesn't mean that you are the smartest one there. Usually the old guy with the leathery hands and the beard that you pay ten dollars an hour can out think and out work you any day. He just has a gambling problem and that's why he has never been financially stable enough to open his own construction business. But if you can put your ego aside and listen to what he has to say he can help your business make a lot of money. I used to work for this guy who owned a construction and land development company. He didn't know very much about construction or land development and he admitted this to all of us one day at a company meeting. However, he was a very good at finding talented smart people who did know a lot about construction and land development. As a result he spent most of the day in his office playing solitaire or on the golf course and he is a millionaire.
Your company is just like a TEAM. You are not the star player, you are the coach. Be good at recruiting talented people, treating them with dignity and respect, and getting the most out of them and you will make a lot of money!
Tuesday, September 14, 2010
Straight Cash Homie!
Back in 2005, when asked how he planned on paying a $10,000.00 fine that the NFL had dropped on him, Randy Moss responded with the above words. I wish my customers thought more like he did.
At the very moment that I sit here and write this article I have a customer that owes me and it is really irritating. It's not so much the amount as it is the principal. The guy calls me in the middle of the night to ask if I can fix his AC. I told him that I was booked up for the week but would move some things around and make a special trip out the next day. I had his AC fixed and back up and running before 5pm the next day.
Normally for a service call like this I would expect payment at time of service. However, it just so happened that the customer was too sick to come downstairs and pay me. He had left the door unlocked to the house so that I could come in and test the system without him having to come down and meet me. When I completed the job I left the invoice on the table.
I called the customer later and he asked if I took credit cards. OF COURSE I DO! I even sent him an email and a text message with instructions on how to go online and pay the invoice by credit card. Needless to say it's been over a week and I haven't heard from the guy. It was such an emergency for his AC to get fixed but it isn't much of an emergency for him to pay me.
Like I said, it's not about the money, the total invoice is less than $200. But it's about the principal. The principal is "if all of my customers act like this then it will be about the money because I won't have any."
From now on I think I might adopt the Randy Moss. My new business slogan is "Straight Cash Homie" pay me cash!
By OM Property Services
At the very moment that I sit here and write this article I have a customer that owes me and it is really irritating. It's not so much the amount as it is the principal. The guy calls me in the middle of the night to ask if I can fix his AC. I told him that I was booked up for the week but would move some things around and make a special trip out the next day. I had his AC fixed and back up and running before 5pm the next day.
Normally for a service call like this I would expect payment at time of service. However, it just so happened that the customer was too sick to come downstairs and pay me. He had left the door unlocked to the house so that I could come in and test the system without him having to come down and meet me. When I completed the job I left the invoice on the table.
I called the customer later and he asked if I took credit cards. OF COURSE I DO! I even sent him an email and a text message with instructions on how to go online and pay the invoice by credit card. Needless to say it's been over a week and I haven't heard from the guy. It was such an emergency for his AC to get fixed but it isn't much of an emergency for him to pay me.
Like I said, it's not about the money, the total invoice is less than $200. But it's about the principal. The principal is "if all of my customers act like this then it will be about the money because I won't have any."
From now on I think I might adopt the Randy Moss. My new business slogan is "Straight Cash Homie" pay me cash!
By OM Property Services
Monday, September 6, 2010
TEAM
Contracting companies are nothing but teams. The better the team, the better the company, the more money that's being made. How can you build this team spirit and your profit margin?
1. Communication: Many bosses only communicate when there is a problem, when something has been done wrong. While this is certainly neccessary, in order to build a team spirit there must be more communication when things are going right. Send out daily, weekly, and monthly status reports to your staff to let them know who is being the most productive. This healthy spirit of compettition will have your team working twice as hard to have their name at the top of the list.
2. Build a rapport with your team. Remember, the team that plays together stays together. Talk to your employees about sports, about their families, about their hobbies. This will bring you closer together and will in turn cause your team to work harder for you. People are more likely to work hard for someone they feel like they know and like than for some impersonal shadowy "Boss" figure.
3. Take Care of Yo People! This doesn't just mean bonuses or raises. We all realize that the economy is tough and construction, trades, and contracting companies have been hit harder than anyone. So even though you may not have the money to give raises or bonuses, there are other ways that you can show your employees that you are trying to take care of them. For some of your employees, allowing them to work overtime can be just like giving them a bonus because it puts extra money in their pocket. Other guys don't won't overtime at all, they are fine with their forty a week. Figure out who likes what and try to arrange the schedule so it caters to this. This is a small thing but it will go along way toward keeping your team happy.
The stronger your team, the more money you make, and isn't that the point?
1. Communication: Many bosses only communicate when there is a problem, when something has been done wrong. While this is certainly neccessary, in order to build a team spirit there must be more communication when things are going right. Send out daily, weekly, and monthly status reports to your staff to let them know who is being the most productive. This healthy spirit of compettition will have your team working twice as hard to have their name at the top of the list.
2. Build a rapport with your team. Remember, the team that plays together stays together. Talk to your employees about sports, about their families, about their hobbies. This will bring you closer together and will in turn cause your team to work harder for you. People are more likely to work hard for someone they feel like they know and like than for some impersonal shadowy "Boss" figure.
3. Take Care of Yo People! This doesn't just mean bonuses or raises. We all realize that the economy is tough and construction, trades, and contracting companies have been hit harder than anyone. So even though you may not have the money to give raises or bonuses, there are other ways that you can show your employees that you are trying to take care of them. For some of your employees, allowing them to work overtime can be just like giving them a bonus because it puts extra money in their pocket. Other guys don't won't overtime at all, they are fine with their forty a week. Figure out who likes what and try to arrange the schedule so it caters to this. This is a small thing but it will go along way toward keeping your team happy.
The stronger your team, the more money you make, and isn't that the point?
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