Smart Business: What Are Contractors Like?
Periodically I get calls from market researchers asking for industry statistics or for me to explain our industry’s lay of the land. One of them recently asked the question, “What are contractors like?” My initial response was to ask a question in return: “Which type of contractor?” Then I explained that the industry harbors different kind of work specialists, each with different characteristics and concerns.
Later, in reflecting back on this conversation, I asked myself whether there might be some unifying characteristics among all of these different market sectors. After all, for the last 23 years I’ve been presiding over a magazine that attempts to appeal to a wide range of plumbing and mechanical contractors ranging from huge to tiny, new construction specialists and service firms, residential and commercial and so on. Instinctively, I know they have things in common but have never bothered to articulate them.
My soliloquy led to the following conclusions:
• Pride in craftsmanship: It saddens me to see this eroding over time as all trades grapple with relentless cost cutting pressure, but there still are plenty of old-school trade workers and contractors who place doing the job right above all else. Sometimes they are not easy to find, but you know them when you see them. They are the folks not visibly in a hurry to finish. They are the ones who take time to test their work before leaving the job completed. In visiting contractors over the years, I’ve always been struck by how many of them go out of their way to show off their handiwork in projects large and small. I can recall times I’ve been driven miles out of the way just to view a building housing some interior installation not even visible from the outside. It was enough to know that the contractor or his crew had a hand in creating something special.
• Tight-fisted: I mean this with respect. Contractors are always driving for bargains and they pinch pennies tighter than owners in most other businesses. They’ve been conditioned to do so by the tight margins and competitiveness of their line of work. Contractors in the bid markets have to contend with tight budgets and only a few missteps–or even one large one–can kill their business. Construction estimating is inherently imprecise yet the margin for error miniscule. It’s been observed only half-jokingly that losing a job means you’ve bid too high, while winning a job means you’ve bid too low! Saving a few bucks on materials and squeezing out a few economies on the labor front often spell the difference between profit and loss. Some contractors take it too far and cut so many corners it undermines their pride in craftsmanship. The good ones know how to straddle that fine line, however. They seek economies in areas where it won’t hurt performance, and spend whatever it takes in other areas to do the job right.
• Camaraderie: Contractors form bonds of brotherhood more readily than any other business owners I’ve observed. Even those who repeatedly bid against one another for work tend to view other contractors as colleagues more than competitors. At association meetings you’ll often find neighboring contractors at the same luncheon table or during evening cocktails sharing details of each other’s business to a degree that would be unthinkable to business owners in most other fields. Many contractors who are too busy to handle a given job will refer it to a competitor. This culture of contracting is not found in many other fields. Besides presiding over a contractor magazine, I also edit a magazine circulated to distributors in the plumbing-heating-cooling industry. I hear a lot more backbiting and bad-mouthing of competitors among them than I do their contractor customers. Heck, even within the trade magazine publishing community where I make my professional home, there’s a lot less camaraderie than I find among contractors.
• Supply chain community: This sense of community extends throughout the supply chain. Contractors like buying familiar brand names from traditional supply houses. That’s why Home Depot has never made significant inroads in its long quest to more deeply penetrate the trade market. It’s always struck me as curious why contractors are so accommodating toward fellow contractors who compete against them for work, but hold fierce grudges against any supply house or big box they perceive as competing against them for material sales. It appears to be an empathy factor. Contractors can relate better to tradespeople like themselves than they can to merchants that make their living selling things.
• Wedded to the tried-and-true: Contractors as a whole tend to be close-minded about trying out new products, techniques and business methodology. While this can be interpreted as a negative trait, it’s eminently understandable. Given the tight margins and serious consequences of mistakes in their inherently risky business, most contractors would prefer to do things with proven reliability over time. It takes a lot of persuasion and incentives to convince them to try something different. Because every job intrinsically involves a roll of the dice, they tend to be gambling-averse in those areas for which they exert greater control. When conventions are held in Las Vegas, you don’t see contractors hit the gaming tables as hard as most other business owners. “We gamble every day,” I’ve heard them explain.