Hardest Part Of Managing Your Business?

idh-custom bldr

hi all-

i recently posted a new thread asking about customer allowances and selections. i got some good feedback but was surprised that more people don't seem to have as much trouble in that area.........it got me wondering.

what do other contractors find to be the most difficult part of managing their business?

cast your vote.......... or suggest a new issue i didn't think of.

idh

PS you can vote for more than one thing

JBBS

I chose finding/keeping GOOD employees #1 with getting underbid a close 2nd. Both made me back off the EIFS trade and get into something needing less employees. If work gets slow we can sub for the manufacturer and not have to worry about bidding.

EAE

I'm a one man band, and my subs have been companies I have worked with for years so I don't have the employee problem.

HO's are a constant problem though. Most recently wanting to change the color of a tub from brilliant white to biscuit. 3 wks out special order. How exactly to I bill for this I am wondering...

oldfrt

#1 Problem....................

It's always been the scheduling.

Reasons...,..,,,,,,

Weather
Change orders
Unseen construction problems(Wood rot,framing not up to code)
Subs not showing up on time
The old"While your here"
Equipment breakdowns
Special order items come in wrong or damaged

All the scheduling down the line is affected by just one job going over in time,so it's always a PITA to have to make the calls to reschedule every succeeding job.

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Double-A

EAE,
For us, that would depend on where the white tub is now.

Change order in any case, unless the tub hasn't been ordered yet and the two colors are the same price and the schedule doesn't take a hit and there is no inbound shipping on the new tub.

If its not exactly so, then we'd start charging for changes made to the original contract.

New tub color = more $? Then price difference+markup+profit= difference in price to homeowner.

Shipping? Pass it on to homeowner. (one of the only things we will pass on without a markup or profit on it.)

Old tub already installed? R&R on tubs plus any impacts from the R&R.

Schedule hit as a result? What does your contract say about homeowner initiated delays in the project? This part of our contract would kick in and have its own set of charges to figure on a separate change order.

And to answer the OP... I would say clients, but only clients that are couples or live together. Otherwise they are a dream to work with. When there is a house mate or a significant other, things slow down and problems tend to pop up. Just how folks can move in with each other and share a life and not be able to agree on a paint color is one of the great mysteries of life to me.

Employees used to be our biggest headache until we raised our rate of pay to something our folks can live off of without having to play the "I'm self-employed and drove my work truck 70,000 miles last year, bought 4,000 in tools and 6,000 in uniforms, pay for 36 subscriptions to trade magazines and I have 14 dependents living with me" game with their "people" down at H&R block.

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"My clients’ wishes are the center of my attention." -- David Guido, a contractor in Woodstock, N.Y.
New York Times, July 20, 2006

wizendwizard

I voted 2 ways on this issue.

I find myself weak on professional presentation to clients. I have always had a probelm with public speaking and am a quiet, non pushy person all around. This leads to lack of confidence when dealing with what i'm trying to explain.
Another part of this is simply a desire to no come off as trying to charge TOO much. I just don't want people to feel that i'm taking advantage of them so I tend to sell myself and my company short. I still make profit but feel I could probably make more.

The next is customers being in the way. I have had this issue on 3 of my past 5 jobs. It's always an issue with either kids or dogs. People don't seem to realise that what we do is dangerous and some things are actually deadly. I have a page in my contracts as a letter to the HO expressly telling them that all children and animals should be kept out of the work area but this seems to get ignored.

My present HO works nights so they are being difficult about trying to sleep while I am working in the house. Also they have a 4 year old that basically acts as my assistant while I am trying to work. Don't know when I became a babysitter but this issue is getting on my nerves.

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EricTheHandyman

First for me is getting tech info on new tasks. Often I am asked to do something that I haven't done before. I know I can figure it out but I want to make sure it's done correctly and that I'm getting paid for it.

Second is getting underbid. With the economy the way that it is, a lot more folks are shopping price. I have a nice comparison sheet that I give along with my proposals that helps some, but ultimately customers want it done cheap. I refuse to be the cheap guy--I do too good of work for that.

Double-A

Wizwiz,

I would suggest you look into being more assertive. There is a big difference between being assertive and aggressive or pushy.

If you want a good example, just look at Cesar Milan aka The Dog Whisperer. That guy is the epitome of assertive. He can say anything to anyone about their dogs, including, "OK, I don't think I can help you."

How many of you have ever said that to a client?

Granted, his body language can get a bit macho, but his words and the way he says them never does.

He has everything going against him but an ugly face. He's a foreigner with an accent, he's shorter than average, he drives Chrysler products... and he's dealing with the most spoiled and unrealistic people in the world. Dog owners!

If you want to learn how to deal with the general public, there is a good role model for you.

If you want to start off a bit slower, I can recommend Toastmasters International. They will have you speaking in front of people in no time.

Just remember, its not just you you're selling those jobs and dealing with those people for. Its your family too. Do the best you can and get better at what you do for their sakes.

__________________
"My clients’ wishes are the center of my attention." -- David Guido, a contractor in Woodstock, N.Y.
New York Times, July 20, 2006

idh-custom bldr

good feedback.............very interesting.

duh...........i forgot to include scheduling as a choice above. can be very tough especially if HO changes their tub choice at the last minute!

rbsremodeling

Figuring out what to do with all this money I make. You know all us contractors are rich and drive ferrari's

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Norrrrrrrrrrrrm

That is some gosh-darn good advice for timid people.
Luckily I am pretty outgoing and trustworthy so that leads to a good closing ratio.
I used to be kinda shy but realized people like assertiveness mixed with a little humor and it does wonders in life.
As far as some of my troubles, I just don't always factor in the little things that take time and sometimes I kick myself for the job taking too long and then I am working for free.

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Norman Sharp
http://www.sharpimprovements.com

rbsremodeling

Here is a little trick I use norm. We all do this we can't see the little items most of the time so I add 2-10% extra usuallly as a line item that covers those little items the larger the job the smaller the percentage I use

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Mike Finley

Most everything on that list is manageable at this point. The hardest thing I go through is managing growth right now. Growing the company in a way that maintains quality and keeps on track, while dealing with the unknown issues that the next level brings with them. It seems that you get everything figured out and running smooth and then you jump up to the next level and you have to start almost all over again.

dkillianjr

Yup I would have to say scheduling is the worst by far. There are so many variables. Every once and a while it seems like I get a job that I get trapped at. Once you get behind its hard to get caught up. My regular customers always joke that they are gonna lock me in their basement, cause sometimes it seems like it takes me forever to get places. But hey if its a hot chick I wouldn't mind being locked in



I feel the exact same way! I hate giving final bills for extras and stuff like that I always feel that people think I an taking advantage of them. Lack of confidence is deffinetly a factor for me too. One of my favorite things to do is email a copy of a bid or statement or whatever a little bit a head of time, so when I get there the customer has had time to absorb it a little.


Dave

Sir Mixalot

getting underbid, having to compete on price

Even though you have to have a license for every trade around here. There are still alot of unlicensed contractors doing work, and I bet they don't have WC or pay taxes or stand behind their work or .......... I could go on on
And all of you know it's not cheap to do it right.

KillerToiletSpider

My biggest problem is getting architects and designers to realize we ain't Houdini, and that plumbing stacks aren't going to move just because they want a doorway there.

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Luke

I chose getting paid for extras from the presented list, but for me it is more a question as to what extra work do I charge for? We do mostly larger, whole-house remodels and additions and part of my sales presentation involves statements revolving around the general idea of not "nickel and diming" the homeowners for every change and/or unknown condition that arises during the project. We negotiate most of our jobs so I certainly plug in a factor for the changes and unknowns, but I've found myself way too often getting into the project to a certain point and finiding out I gave too much away. At that point, it is typically too late to go back and I've ended up eating what should have been some additional profit. It generally comes down to a feel for what is fair and if there was a meeting of the minds on the extras issue but it is something that I always seem to struggle with. Generally, I'm too nice a guy and the homeowners probably get more than they paid for but by the same token, we get almost 90% of our work from referrals or repeat business so there's something to be said for that as well.

idh-custom bldr

luke- i'm in your position too, similar work etc. if you bill for every little thing you may make a few more bucks on your current job, but how fast will your customer tell their friends?

if you're getting negotiated contracts from solid referrals how much time are you NOT spending writing estimates for jobs you don't get? i'd rather give away what may feel like too much, be known as a good fair builder and waste less time writing estimates. either way you have to build something in for 'overhead' or whatever you want to call it. i would rather work for free for a good customer than spend hours or days writing estimates for people who are shopping. you want to keep it to a minimum but you can't escape it.

its a matter of balance. make sure the customer knows about the free stuff they're getting and that they appreciate it. i acutally list most freebees in my change orders with 'no charge' along with the things i do charge for (most things). i usually give away a bunch of little things and sometimes a medium sized item. anything free thats not so little comes with a song and a dance. this way they remember when you give them the the next bill for stuff you do charge for. you cant give away the farm. some people will take advantage. screw that, they get cut off fast from the free stuff buffet.

for me, the key is to have as detailed an estimate as possible. you need a very well defined original scope of work. how can you tell what's extra if you're not even sure of what is included to start with? i use a unit price estimating program that lists EVERYTHING. the estimate becomes part of the contract and supercedes the drawings. if its not on there its not included. the other thing is ALWAYS tell the customer BEFORE you do ANYTHING extra that it will be extra. if you don't, be prepared for "but i thought that was included" or "why didn't you tell me". give them at least a ball part of cost and if they are at all unsure wait and get a signed change order. this way you are in control of what you want to charge for or not.

good luck

idh

by the way, i give away some stuff but i ain't cheap. people will pay if they think they're getting good value.

rbsremodeling

I do the same thing I use a unit cost system and my estimates are usually 20-50 pages long. I tell the homeowner and go over the estimate. if it is not listed in the estimate it's extra. I use to be slow writing up change orders but have become better at it and I am surprise how much I gave away or would loose when I did not write up the change orders right away. If I feel I really should have caught something and it is not over say 500 bucks and thats alot, I will swallow it and not come across as nickel and dime-ing and make sure I check for it on the next job. I think alot of it has to do with your estimating experience as well. My motto is gut it to the studs so I can see everything and make sure I am covered and the HO can see the change orders plain as day like I can

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MALCO.New.York

Employees. Employees. Employees!

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