Construction and Contracting Business. Entrepreneur magazine

has been started. To avoid this problem, contractors must plan projects accurately so that all needed materials are accounted for. Designing a precise and accurate estimating system reduces errors as well. When it becomes necessary to make changes, the client must be informed in writing and must agree to both the physical alterations as well as changes in the cost of the project. Never change a rate without informing the client in advance that the cost may be higher than anticipated.

       stat fact

      Approximately two-thirds of home improvement clients cited a personal recommendation from a trusted friend as the key reason for hiring a contractor; about the same number of contractors believe that clients chose them because of the quality of their work or because of a referral from someone the client knew. This means you should always be leaving a business card or two or three with each customer.

      Most clients consider their homes to be their castles and are very proud of their ownership. Therefore, many of them become extremely upset when contractors do not clean up the job site both during the project and when work is completed. Failure to clean up a job site on a daily basis can give the client an impression that the contractor is performing shoddy work and does not take pride in what he does. While many people mention first impressions as an important factor when evaluating someone, the truth of the matter is that the final impression a contractor leaves when he or she finally departs the job site is more likely to be the dominant and lasting impression.

Clients pose all sorts of questions when choosing a contractor. Smart consumers talk to several contractors before engaging one to perform work. Contractors should be able to answer the following questions in a very timely manner. It should be noted, however, that clients appreciate it when a contractor or salesperson informs them that they do not know the answer but will get it within a day or two. Honesty is always the best policy. Be ready to answer:

      

Are you licensed or registered in this state?

      

Do you have adequate insurance coverage to protect my property and your employees?

      

What other projects are you currently working on? (How’s your schedule?)

      

Can you provide references? I’d like to see some of the work you’ve done that is similar to the work I’m having done.

      

Is your bid based on the same specifications as other bids?

      

Do I need a building permit?

      

How long do you estimate the job will take?

      

Once you start on my project, will you stay on the job until it is completed?

      

Do I have to make a decision right now? (The answer is always no.)

      

Will you give me a written contract for the work you propose to do? (The answer is always yes.)

      

Will you or someone else be doing the actual work?

      

Who will be in charge of the project?

The Nightmare Client

      While it is easy to find information and advice for consumers, much less is written about problem clients and how to deal with them. Some contractor associations offer advice, often through presentations at annual conferences, in their blogs, or even on their websites, about dealing with the problem client. When asked, most contractors will answer:

      I do not like clients who

      

continually ask for work to be redone, or continually change their minds;

      

constantly complain and nitpick;

      

don’t pay on time, think you are their banker;

      

try to get you to do more work at no additional charge;

      

talk too much or watch you all the time.

Sometimes a contractor realizes that a potential client has a good chance to fall into the nightmare category. In this case, honesty is a good policy. Don’t be afraid to say to the potential client, “No, thank you, we cannot do the work for you.” However, some contractors simply raise their price in hope that the client will hire someone else. The risks in this approach is that the unwanted client will agree to your price or you get the reputation that your prices are too high.

       Choose Carefully

       When business is slow or the outlook for the economy as a whole is poor, competition among contractors can become intense. Competitors may drop their prices to levels below your break-even point. A contractor once commented, “Well, I’ll take on some of these jobs because I can make it up on volume.” Hogwash! It is silly to chase after these jobs because money lost on a project is gone forever.