Rich Contractor

Hang Around Long Enough To Win

Once you've learned how to become a contractor and then put in a few months of hard work you might start to have a few doubts or frustrations, so I present to you an analogy that might help.  I think we've all had that favorite sports team that was short on talent but positively brimming over with persistence and tenacity.  A few Duke basketball clubs come to mind.  It's the kind of group that will drive other teams nuts because while they might fall behind by a few points they refuse to roll over and die.  They hang around and keep fighting, just waiting for that opportunity to spring when the more talented team gets lazy or frustrated or allows an open window.  As soon as the other team starts to crack, they'll take advantage and bust the game wide open, usually leaving their more talented opponents in the dust.  More often than not these kinds of teams are highly successful, and occasionally, with a little luck, they are champions.

Your fledgling business needs to be just as tenacious, just as persistent, and just as patient.  In the early stages you're sure to have setbacks.  Startup costs will be more than you'd planned, getting systems in place will be a hassle, you'll have few references and contacts, and there could be added stress on your home life with you pulling 60-hour weeks on your business.  The novelty of owning your own business will quickly wear off and you might even occasionally doubt your ability to pull it off, but the trick is in finding a way to weather all the storms and tough it out. 

It might take six months or it might take a year, but eventually that rickety vehicle that is your business will start to run smoother, the wheels will begin to turn more easily, and the competition will come into view directly ahead of you.  As time goes by it will generally get easier as you learn the business, start to build a customer base, and work on solidifying a reputation in your city.  And if you stick with it long enough you'll start to be given huge opportunities to propel your business past the competition.  It could be a large contract from the city, or a big write-up in the local paper, or a scandal in your competitor's business, but eventually that day will come when your persistence will be rewarded by a huge leap forward for your business.  Often times you won't see them coming, but they WILL come, and only if you're still in the game can you take advantage of them. 

Most people will fall behind early and give up like a team of undisciplined punks, but if you have the fire in your belly to keep pushing forward you'll eventually come across big opportunities to exploit and destroy your competition.  You don't have to be super-talented or a genius to go big with your business.  You just have to stick around long enough to see your competitors throw in the towel.

Keep The Customer For Life

So you just finished a job for a very nice customer who treated you graciously, paid you promptly, and raved about the quality of your work.  He or she is the kind of person that you'd like to do business with again, but the great work you performed is just about all you can do to assure they'll call you back next time they have a need, right?  Wrongo, buddy! 

For starters, you should promptly send them a thank you letter, no matter how many times you said "thank you" to their face.  It amazes me how few contractors actually do this.  People LOVE getting thank you letters in the mail!  It makes them feel like you truly appreciated them because you took the extra time to express your gratitude on paper.  Some people will feel slighted if you DON'T send a thank you card, especially if it was a major remodel or project.  How would you feel if you spent $35,000 on something and received absolutely no kind of thank you in the mail whatsoever?  It may sound petty, but the fact that they didn't receive a card or note from you might make them feel unappreciated enough to take their business someplace else the next time they need major work done around their house.  Are you willing to lose a several thousand dollar job down the road from a great customer just because you were too cheap or busy to print out and mail a simple "thank you"?  If you're not the articulate type, have your wife/husband or secretary type it up for you and just sign it at the bottom; it's better than nothing at all!  Included with the letter should be a few more construction business cards that they can hand out to friends.  Some contractors will even send a gift to big-project customers, and I'll leave that up to your personal preferences, but it should be self-evident that the "louder" your thank you, the better your chances of repeat business.

You should also make a constant effort to stay on previous customers' minds, because you'll find that doing so is much cheaper than acquiring new ones.  The cheapest method is to keep a database of client email addresses so that you can send them a quarterly newsletter via the internet.  Each "e-newsletter" should contain updates about new services you might offer, new skills or equipment you might have acquired, and/or special coupons or discounts for repeat customers.  What matters most is not what is in the newsletter, but simply that you send it.  Staying on your customer's mind is vitally important, and might help to accelerate that home improvement job that they really want to do but keep putting off.  For those that don't want to give their email out, just mail the newsletter to them.  Yes, it's an added cost for you, but it's a heckuva lot cheaper than trying to win a brand new customer.  And keep in mind that even though they might not need your services again down the road, your diligence in staying on their radar will encourage them to talk up your business to their friends and family who do have a need, resulting in lots of free construction leads.  Say it with me: "referrals, referrals, referrals".  Becoming a contractor that makes real money involves marketing savvy and tenaciousness.  You must learn to be aggressive.

Of course all of this is meaningless if you perform lousy workmanship, but even fast-growing and successful businesses that provide a quality product can substantially accelerate their growth and profits by simply taking these few extra steps to show appreciation and to occasionally remind the customer just how happy they were with your work.

No Mercy For Your Competitors

Sometimes I see a scenario where a small business owner in the home service industry feels that he or she must maintain good relationships with their local competitors so that they can help each other grow, share trade information, and pass off extra work.  If you want a business that is stagnant or grows only as fast as the market expands, then I guess this is the way to go.  But if your goal is to grow rapidly and to take market share (as your goal should be), then you must learn to be more ruthless.  After all, did you become a contractor to make friends or to make money?

Your competitor is the enemy.  They should be treated as such.  I'm not saying to bad-mouth them or lie about them to potential customers.  I'm not saying to sabotage their business with unscrupulous methods.  I AM saying that the quality of your work, the excellency of your customer service, and the effectiveness of your marketing must all be so overwhelming that they are tools to rocket your business and bury your rivals.  Do you really think they would shed a tear if you went out of business?  They are plotting against you every day, and if they are not then someday their business will die.

We live in a capitalist society, and business is war.  The sooner you can learn to embrace this concept, the better.  By all means, be a nice guy "off the field".  Character is important.  But when you "step between the lines" that guy in the other jersey is the only obstacle to your ultimate success and domination.  You have a duty to yourself and your employees to crush him, to decimate him, to run up the score on him.  Otherwise your business is an exercise in futility, and your future could be one of uncertainty.  Cut your ties with your competitors.  They are holding you back, or worse yet, they are preparing to take your down while you sleep. 

Lowballing Will Destroy Your Business

One common mistake that new business owners make is to price their service too low - also known as "lowballing" in the construction and home services industry.  Your motive in doing so might be to generate enough business to keep the business afloat in its early stages, but it's a flawed strategy that will almost certainly lead to your company's demise.  Learning how to become a contractor also means dedicating yourself to understanding business fundamentals, and a big part of this is learning to price appropriately.

For one thing, you'll find that most quality-minded, upper-class homeowners (whom you'd be wise to target most aggressively) view low bids as a warning sign that your company must be cutting corners somewhere in order to stay in business.  In their mind a super-low bid equals crap work and even crappier service.  I must admit that I, too, nearly fell into the lowballing trap in the early days of my business.  I was scrapping for business any way I could get it, and to assure a constant stream of cash my bids started to drift lower and lower.  The middle-class customers hired me consistently at the lower prices, but I was working harder and harder for less and less money per job. 

But soon arrived one particularly puzzling day when I gave a low bid for a large job at a huge home, and instead of getting the usual gleeful response of "when can you start?!", I got a marathon of questions about why my price was so low compared to the competition's, if I was going to do quality work, and what kinds of references I had to prove my abilities.  It threw me for a loop, and though my newly honed salesman skills eventually won me the job anyway, it opened my eyes to to the fact that I could actually be losing business because my prices were so low!  And I was losing it in the demographic that I most needed: wealthy, time-challenged, highly-networked homeowners.

It is true that many middle-class customers are more concerned with price than anything else, so you have to price competitively to them, but they do not represent the segment of the population that will give you your most profitable jobs.  Focus on targeting higher-end homes, charge what you're worth, and you'll wonder why you ever used to be one of the dreaded "lowballers" that works more but makes less.

Top 10 Ways To Kill Your Spirit

UPDATE:  Obviously I had not expected it, but in looking at my site stat logs it seems that this post is coming up in some internet search results for those researching suicide.  If you are feeling hopeless or suicidal, please call the National Suicide Prevention Lifeline at 1-800-273-TALK or visit their site at www.Save.org.  Please call them now.  Help is available.

Welcome to 2008!  The beginning of a new year is the perfect time to take a brutally honest look at your life or your business so that you can correct mistakes, refocus on what's important, and rekindle the passion that may have been lost along the way.  If you feel like your energy for life is worn out, but you aren't sure why, please take a minute to read this list.  It could make all the difference!  So, without further ado, I give you the Top 10 Ways To Kill Your Spirit:

1. Finally let go of those juvenile notions to have an occupation that you enjoy.  You've got to stay at that job that you hate and suppress your desire for a career change because, well, that's what everybody else does.  After all, you've got several more lives after this one to do that thing that you've always wanted to do.  No need to have a sense of urgency.
2. Stay committed to that significant other that doesn't believe in your dreams.  So what that they ridicule you for wanting to become a contractor, or that they call your hobbies a selfish waste of time.  They know you better than anyone else, and therefore know what's in your best interest.  And who knows, maybe with time those feelings of resentment and bitterness that you harbor will just fade into a mind-numbing, soul-sucking disconnectedness that you so admired about your now-divorced parents' relationship.
3. Don't show too much enthusiasm or emotion.  People might think you're weak.  Worse yet, they might gain a glimpse of the real you, and the real you might make them wish that they were leading more authentic lives.
4. Ignore and suppress the talents you were born with.  Never mind that you were put on this planet with the express purpose of writing that Pulitzer Prize-winning book that would help sway public opinion in such a profound way that it resulted in the election of a President who's revolutionary ideas would end world hunger and the AIDS epidemic.  You've got more important things to do, like spend 40 hours a week, 50 weeks a year, for the next 30 years writing cheese-ball, one-liner greeting cards that will end up in the garbage anyway. 
5. Don't stand up for yourself.  Self-respect is overrated, and your boss is probably right: you are a worthless idiot.
6. Don't rock the boat.  The way things have always been done is the way things should always be done, period.  Malcontents like George Washington, Thomas Edison, the Wright brothers, and Rosa Parks just made the world more complicated.  Who needs air travel, anyway?
7. Refuse to apologize for mistakes you've made.  After all, it was a long time ago and they probably don't remember, just like you don't remember that time 39 years ago when your best friend in high school borrowed your car and then wrecked it before skipping town.
8. Refuse to accept apologies because, well, you've never made a mistake in your entire life, and holding onto that anger is doing wonders for your blood pressure.
9. Don't take risks.  Whatever is out there beyond the horizon might hurt or frighten you or, God forbid, allow you to learn something new.  Besides, everybody knows that the greatest, most influential figures in history preferred to play it safe and take the easy bets.
10. Read something like this and tell yourself that idealism is for the young, the naive, and the stupid.