July 31, 2024

The Greatest Pain Point Within Our Industry

What is the greatest pain point within our industry? I would say that it comes down to most contractors being unsure of the success of a project. Whether that means hitting schedule, budget, or simply making money. At the end of the day, most if not all projects require a lot of speculation and guesswork; and that is not conducive to establishing confidence or reducing anxiety. So how do we guarantee success on every project? It comes down to setting expectations, comprehensive documentation, and accurately managing costs during a project. 

For the first ten years in business, I could not guarantee the profitability or success of any project. Even the guaranteed “money makers” could throw me for a loop. What I thought would be a lucrative half day project turned into a day and half, rendering my time wasted. Had I properly addressed the uncertainties, set clearer expectations, and created a scope that did not back me into a corner, there could have been a much happier ending. 

Why do we assume the risk on behalf of our customers? Are we too busy and too uneducated to adequately protect ourselves? Do we so poorly mismanage projects that we do not know how much time or money has already been spent? Do we feel obligated to concede time and efforts because we were over-budget from the onslaught? Regardless of the answer, it is unfortunate to say the least. Our industry has been shaped in a manner that puts most of the responsibility and risk on us as contractors. Last I checked, this industry is not lucrative enough to afford us to do that. 

Is it insane to think that there is a world that we live in where we could be paid for the work we put in place, not less, and not more? Why is that so hard? How much different would your life be if you could guarantee that you would be paid your rate for a project, be paid more if the scope increases, or be paid less if the scope decreases? We would not need to pad our numbers, incorporate larger contingencies, or stress that our team will be paid, and in turn we will be paid. I also believe that these conditions would afford us an opportunity to be generous when we felt the need. If I made my money throughout the course of a renovation, I would be more apt to cut someone a break than on a project where I took a huge loss. I would be more willing to deal with changes and take some of the hits in stride when I know that the customer is paying for most, if not all of my time.

How many times have you felt resentful towards someone who asked you to fix something, change something, or add something to a job where you lost your shirt? The customer has no idea how much money you left on the table, but you still feel as though they are simply costing you more money. If you had gotten paid up to the point you may even say, “Hey, well just do that at no cost to you. We have made our money, and you have been great and fair, so it is the least we can do.” This is the world where I want to live. I have slowly changed my business to adopt a model like this, because I realized that nothing causes me more angst in this life than wondering if I am going to make money, or even worse….losing money.

If I want to be a good husband, father, friend, and business owner, I have to ensure that I run a profitable business. I do not need to make obscene margins, but I cannot invest my time or money into your project due to the nature of our industry. I refuse to do that. If I want to lose money, I would rather lose money on my own house or doing something more fun. Losing money while creating equity in someone else’s home is not a smart decision. It is far from enjoyable as well. At this point I simply want to get paid for my time. No more and no less. It may not make me rich, but I will have peace of mind, a positive attitude, and far less stress.