By Sal Alfano. Those of us who've been around this business for a while know that remodelers are often their own worst enemy. Character traits that have positive effects for ordinary people continually get us into trouble. Take optimism, for example. Our positive, can-do attitude regularly results in grossly underestimating how long a project is going to take. Or how about our sense of fairness. We either lose money by failing to charge what we're worth, or we work through our guilt about our high margins by playing Mr. Fix-It for our customers without writing up a change order. Our excuse is we don't want to "nickel and dime" them so instead we nickel and dime ourselves.
Remodelers have an image problem that has nothing to do with used-car salesmen or customer complaints. It's our self-image that gets us into trouble because the public sees us as we see ourselves.
This was never clearer to me than one day many years ago when I made the switch from bidding to negotiating projects. Like a lot of remodelers, I started out bidding directly to homeowners who were shopping prices from three or four contractors. I was an order-taker, eager to please. Eventually, I started bidding architectural projects, which were generally higher-ticket jobs with good margins and interesting details. I soon became a high-priced order-taker.
Photo: Mark Robert Halper
For years I bid against the usual suspects, including one or two companies who seemed to lowball everything but still somehow managed to stay afloat. I wasted enormous amounts of time preparing estimates for projects I never worked on, but when the next architect called, I could never quite bring myself to turn down the offer to bid. One whole-house remodel project finally firmed my resolve. On more than $130,000 worth of work (in the mid '80s, that was a very big job), all three bids were within $150 of each other. I missed being low by $5.
The next time that architect called to ask me to bid a project, I respectfully declined. I explained that I wasn't interested in bidding, that I much preferred to negotiate contracts. Instead of putting up an argument, he just said, "No problem." It turns out I'd been on his list of bidding contractors. All he did was switch me to the list of negotiating contractors. It was that simple, and within a month I was sitting in his office signing a negotiated contract for a major addition.
Bridge the gap
I often see this self-image problem among seminar attendees at trade conferences. Typically, it's when the speaker is a well-established remodeler talking about how he charges up front for change orders or design, or prices all his work at a 100% margin. Most remodelers in the audience can't conceive of doing any of these things. "It's easy for you," they object to the speaker, "because you're in a high-priced market. I could never do that in my market." Or they blame their competition or complain that they tried to make changes once but it didn't work.
The speaker usually explains that he used to think that way, too, but most of the audience can't make the leap. They can see the far shore, but something is blocking their view of the bridge they need to make the crossing. It's not their customers or their competition, it's their own image of what they're capable of.
Sometimes the only thing standing in our way is us. If you think your prices are too high, they will be. If you believe clients won't pay up front for change orders, they won't argue with you. If you're convinced the time needed to do the job right is too long, it will be.
The next time a customer asks how long and how much, what will you tell them?
Sal Alfano, Editor-in-Chief