Solving business problems, Part 4

BY RICHARD P. DiTOMA,
contributing writer

Problems occur. How you look at each predicament and the way in which you address it affects your business and personal life. Dealing with problems in a positive and intelligent manner gives you an opportunity to make a bad situation better. Pessimism exacerbates your problems. This article is the final installment of a four part series on the question, “What do you consider to be the biggest business problem the PHC industry has faced in the last ten years?”

Problem

Thomas Bargone of Thomas’ Plumbing Services, a full service plumbing company in Commerce, Michigan, envisions that problem as follows, “In my opinion, the standard of materials and supplies available to our industry has decreased in quality workmanship and is geared towards do-it-yourselfers for ease of install. This may have benefited the big box stores and manufacturers, but it has had a detrimental effect on contractors and consumers.”

Thomas’s solution

“Call Richard DiToma. We are the solution. It is up to us, the true businesses, to speak out and let the consumers know why it is in their best interest to use only qualified, licensed, insured professionals who use time tested, field tested parts and supplies.”

My thoughts

Contractors are supposed to be professional business people who deliver excellence to consumers. It is their responsibility to make decisions regarding the quality of materials, protocols and pricing structure they use to operate their businesses. But most are just technicians in business. Their lack of proper sound business principles and techniques is the origin of all the problems they encounter.

Although consumers may apply pressure, they don’t make the decisions each owner must make regarding the modus operandi of their business. Contractors do! Thomas is right: “We are the solution,” but only if we are not part of the problem.

Since materials and contractors come in such varieties as the best, the worst, and that which is between, it is incumbent upon the consumer to choose enterprises that strive to perform in a superior, professional, businesslike manner. The delivery of excellence to consumers depends on the decisions of contractors. Excellence requires superiority. Carelessness and foolishness can only result in mediocrity.
I recently received the following email from another contractor. He stated, “Hey, Richard I’ve been thinking about your articles for quite some time, and, for the most part, I agree with you. However, I will do battle with you all day about contractors being the problem. They are only part of the problem right now. Consumers are driving down the cost of our service because they are unwilling to pay a high price for that service. Read my article on my website and how I feel will be crystal clear to you.

“I can go in a whole different direction on the commercial side. I believe our business model of borrowing money to fund projects for the general contractors and owners is broken beyond fixing. In fact, I would say that the state of commercial and industrial sub contracting is in worse shape than the residential service side of the business. You may not agree with my take, and that’s fine, but I believe my opinion is valid.

“Let me know what you think.

“BTW, if you are thriving in the plumbing business, and you are based in the Chicagoland area, you are a better and smarter man than I am. I mean, in what other business do you have to make a mistake to get the job? If the cost of material goes up, the owner doesn’t eat the cost, the contractor does. If there is something missing on a drawing and you go in for a change order, you may get paid or you may not. Most times, with jobs under 100K, we end up finishing the job before we get our first pay app and, finally, quite often, our retention is negotiated. Can you tell I’m a bit disenchanted? The subcontracting business is the only business where there are so many obstacles between you and a profit. It is one huge game of roulette.”

It’s easy to see that this contractor cares about the industry. But he is blaming everyone and everything except the root cause of the problems of which he writes. No one can solve problems when they cannot identify the source. When the cause is unknown, more problems may arise.

All businesses are a gamble. Aside from luck, whether a gambler wins or loses depends upon how the gambler plays the game. If contractors choose to borrow “money to fund projects for the general contractors and owners,” those contractors are at fault. He speaks of an industry which requires “a mistake to get the job.” Those mistakes arose from the contractors who made them.

The matter of rising material costs may be addressed by a properly worded contract that deals with that potential occurrence. Contractors who enter into contracts without proper wording to take fluctuations into consideration are responsible for their lack of due diligence.

This guy is an intelligent person with the wrong perspective. Negativity blinds him to the possibilities that could make him content with his business and our noble industry. He is the one that chose to go into the PHC industry. He’s the one that chose to accept the terms and conditions about which he is griping. He obviously knows what’s wrong. He should refuse to work under terms and conditions with which he doesn’t agree. He should counteroffer terms and conditions that are fair to his business and the interests of his clientele. That ?would be the smart thing to do.

Contractors must learn to be a positive business force in the industry. They must operate with sound logical and correct business protocols. To be a positive force, one must be well versed in the subject matter. Preaching to others on the Internet, which allows people to spew their potentially flawed opinions, could possibly serve to make matters worse. Blaming the industry is just an excuse.

Thomas Bargone operates in a geographic area that was hit by economic calamity long before the rest of the country. That Chicagoland plumbing contractor should heed Thomas Bargone’s words. “We are the solution.” Before any of us can be part of the solution, however, we must stop being part of the problem.
Thanks for your insight, Thomas. You are very gracious for telling contractors to call me. I hope we have shed some light on a problem that is pervasive throughout our noble industry. And I hope that we have helped contractors, as well as my newly found acquaintance in Chicago, realize that they must look at the person they see in the mirror to find out where the fault lies, so they can start solving their problems.
For help solving your business problems, for my book Solutions Management Theories and Methods for the Contracting Business©, my Readily Available Pricing Information Digest© for PHC contractors or any of my business consulting services or products, give me a call at 845/639-5050.

Email contracting business problems you would like discussed in future articles to me at richardditoma@verizon.net.

I look forward to helping you, and I wish you all good health and much wealth.

Richard P. DiToma is a contracting business consultant and active PHC contractor with over
40 years of experience in the PHC industry.