Columbus — a PHC contractor? What if?

 

BY RICHARD DiTOMA, L.M.P.

 

Have you ever wondered about what triggers human beings to follow a certain direction regarding their actions? Christopher Columbus was not the first person to walk on the soil of what was to become known as the New World.

After all, there were already people in the new world when he arrived. Some think that they migrated through Asia into Alaska and traveled to the North, Central and South Americas. Others might believe that they were indigenous to the Americas. There are those of the belief that Leif Erickson landed in North America before Columbus.

Regardless of who was first, they all were part of actions, which led to the forming of the greatest nation on Earth. A nation built on the premise that all men (and women) are created equal with certain inalienable rights such as “life, liberty and the pursuit of happiness.”

Focusing on Columbus, you might wonder what was going through his mind that brought him to the conclusion that he could reach the East by traveling westward. The common opinion of his day was that the world was flat. The only thing someone would accomplish by sailing to the end of the world would be to have to turn around or continue and fall off the edge.

But, good ol’ Chris questioned the theory of a flat world. Maybe it was because whenever he sailed on a ship, the horizon which he saw never became closer. If the world was flat, the distance between where he was and where he sailed would become shorter as he approached and eventually reached the end of a flat world.

He might have noticed that the sun always rose in the East and set in the West. Putting aside the fact that the Earth revolves around the sun and not vice versa, the rotation might have given Chris pause to think the Earth was spherical rather than flat. Whatever ran through his head probably became the catalyst that led him to seek a shorter route to the East by traveling in the opposite direction.

The New World of opportunity was found because it existed and people like Columbus, Erickson and/or those migrants took a risk to improve their lives. Columbus didn’t find a shorter route to the East. But, because of his powers of observation, intelligence and courage, he discovered a New World of opportunity. For that, the world owes him a debt of gratitude.

If Columbus was a phc contractor, and acted as many do to this day, he probably would have just said the world is flat because everyone says so and I am staying where I am because I don’t have to think or take risks.

He would have charged for his phc services like many contractors, by the hour at a rate that was at least a dollar cheaper than his competition. But, that would result in his competition lowering their rates a dollar less than his rate. He, in turn, would then lower his rate below their rate. As this price war continued and they reached a zero rate value, they could then start battling over the amount they would pay their customers for the right to perform services for them. That type of thinking could never really get Columbus where he wanted to go. Columbus would have boxed himself into a smaller world with less opportunity.

Time and material pricing puts you in a box. It doesn’t allow you to get where you want to go. Instead of sailing the sea of success, you would be adrift on the sea of stress. If you charge by the hour at a rate that has does not allow you to recover your true cost while giving you a chance to earn a profit, you are as wrong as those who believed the world was flat. A “t & m” pricing method cannot afford you enough money to grow your company properly so that you are financially solvent and staffed with people who really want to deliver excellence to your clientele.

To succeed you need a good idea, proper business game plan, capital and some luck. The good idea is usually to cash in on your trade skills by delivering your expertise to your clientele. You must utilize a sound business game plan that does not resemble a chicken running around without a head. The plan must allow you the opportunity to afford to deliver excellence to consumers. You must never employ a pricing structure, which is usually below your true cost. And, you must avoid the temptation to charge a dollar less than your ignorant competition. If you don’t do these things, the capital with which you started your enterprise will be squandered on poor preparation, silly practices and bad business management. Then, you will find yourself adrift on the sea of stress with regard to your phc contracting business. If you want to change your direction, just do it. Don’t be blinded by the erroneous beliefs of those who don’t know what they talking about.

Sit down and make a game plan with a set of protocols based on common sense and the fundamentals of mathematics. 2+ 2 = 4. It never equals less. It never equals more. Stop guessing at your prices. Stop worrying about what your competition does and charges. They are probably as wrong about their prices as the people of Columbus’ day were wrong with their flat world theory. Identify and calculate your true operating costs and choose a proper profit margin before developing any selling prices. Always seek to deliver excellence to your clientele.

Don’t fool yourself into thinking you can do the job for less just to get the job. That will only lead to the delivery of mediocrity to your clientele. Seeking to get every job at prices that are at or below your true cost is stupid. It is more important to be concerned about the quality of your work and that your prices allow you to recover your true costs and earn the reward you deserve for the delivery of excellence.
Hire people with integrity, loyalty, aptitude, great attitude, self motivation, excellence and the ability to follow orders. If you hire people just because they were available and they don’t have those traits, you’ll defeat yourself.

Choose the consumers you serve like you would choose a good employee. They may have questions about your business procedures or their problems. Know the answers before the question is asked. Be honest with your clientele and expect the same honesty from them. They are as human as you are.
Hone your communication skills. Ninety-eight to 99 percent of consumers are good people. Remember that there are two types of buyers, price buyers and value buyers. If a consumer only wants to use your services at prices which do not allow you to recover your cost and earn the reward you deserve for the job, you don’t need them. Don’t be afraid to fire a client.

Fortunately for us, Columbus wasn’t a phc contractor. He knew there was another way of doing things that made sense. And the New World was discovered. But, before Columbus put his theory into practice and set to sea in a westward direction he needed help from the Queen of Spain.

There is a better way for phc contractors to do things. Embrace Contract Pricing! It will enable you to discover a new world.

If you need assistance to begin your voyage on the sea of success, give me a call at 845/639-5050.

I wish you well, and Bon Voyage