Up Front: Business Mantras
As businessmen, we all look for successful mentors and business models to follow. I think we need to look not only at the success of the business, but the comparisons of industries to truly evaluate business models. A story that will sound unbelievable to a successful wall and ceiling contractor will prove my point. Back in the early 1970s there was a large wall and ceiling contractor who was taking work all over town for prices that the competition found impossible to compete against. While undercutting the competition was not a new idea and has certainly been repeated many times, the business philosophy of the owner was pretty unusual. It was the sound byte of his business philosophy that was repeated over and over around the industry. Because he was the largest contractor, it was accepted like words of wisdom from Bill Gates or Warren Buffet. “If I make one dollar on every job and I do a million jobs, I make a million dollars,” was what he told everyone who would listen. When I questioned the wisdom of this logic, I was looked at like the boy who questioned the king’s new clothes. As I tried to explain to my fellow workmen that there are several flaws with this philosophy–not the least of which is that doing a million jobs is impossible–I was told I was just jealous.
The million-job maniac ended up filing for bankruptcy. While this would not be surprising to any good businessman, many field people could not understand how he could fail. Many of these tradesmen went on to become contractors. Unfortunately, I have been around long enough to see most of them end up ultimately filing bankruptcy as well.
There are two points to the story. One is that a good trade craftsman does not automatically mean a good contractor. Most start-up contractors fail, not because of a lack of trade skills, but a lack of business management skills. The second point is the dollar-a-job theory may work for the big box stores; they can sell a total of a million products in hundreds of stores around the nation. They also have other advantages over a contractor: They can see the competition’s prices by walking into the store, but a wall and ceiling contractor bidding on a job will never really know where the competition is. Most general contractors will claim that you “are a little high” even if you are the lowest bid. Big box stores generally control the environment they work in, while wall and ceiling contractors are at the mercy of the general contractor’s staff and schedule. Big box stores also do not have the unforeseen job problems and changes that a wall and ceiling contractor routinely encounters.
So what business philosophy should a new wall and ceiling contractor follow? I have some suggestions and believe the truly powerful wall and ceiling contractors would agree.
1. Continue your education, attend seminars on technical/code issues, legal and business management. Always be learning.
2. Find and cultivate key personnel. Look for those exceptional people that can help you grow your business. Be very aware of their needs and fulfill them. That may even mean partnership at some point.
3. Raise the bar, do not try to compete with bottom feeders and be the cheap contractor. Build a quality reputation. It does take time, but is worth it in the long run.
4. Do not buy business; it is not worth it. Do not believe general contractors with promises of future work when they say, “Do this first chain store cheap, then you will get all the rest.” You are not the first fish they have dropped that line and hook for, and you won’t be the last.
5. Do not believe general contractors that constantly want to talk you down. “You are a little high” is their mantra, even if you are the low bid. Hold your ground.
6. Be loyal to dealers and manufacturers that have helped you. It will pay you back in the future. They remember who jumps around for a few pennies.
Being a wall and ceiling contractor is competitive, tough and challenging. To be successful takes nothing less than hard work, smart decisions and some time. Be wary of gimmicks or mantras that may be better suited for other businesses.