As published on Forbes.com
If you have ever watched any of the shows on HGTV, you might conclude that a complete renovation can be completed within an hour… including commercials. The dumpsters are clean, the workers are all fit and tidy, and everyone shows up on time to do their work with a smile. My wife and I just completed a lengthy and extensive nightmare of a home renovation. Several of the horrific business practices we observed are the same mistakes I see in other industries, too. You might not even realize you are doing them. We experienced painful lessons that HGTV forgot to tell you about home renovations. At the end of the article, I give you specific lessons to ensure you don’t make the same mistakes.
The First General Contractor
When we signed our agreement with our original general contractor, Scott, he immediately responded that he wasn’t going to make much money on the project. I replied: “I get the sense that this doesn’t work for you. If we are not both comfortable with the terms, then it probably won’t end well. If you are comfortable, then we can proceed. If not, then it’s probably a sign that it isn’t going to work.” Scott replied: “I have accepted the terms of the contract. If I could not accept them, I would let you know.”
Every subsequent discussion seemed to include a rant about how he was not making money. Of course, he was rarely on site to oversee the project. Big shocker: Without any oversight, his project was not being run efficiently.
The contractor failed the next county inspection because he had not met the base building code requirements. He responded by telling us that these were “extra items” and we’d have to pay for them in order to proceed. We declined his kind offer, fired the contractor, and took over the project.
Our general contractor “could not find an electrician within the budget provided.” After a few phone calls, I found an electrician, Jason. He provided a fixed-price proposal for the project. We accepted the proposal and work began. Along the way, we added some lights, and agreed to the additional cost. The project was moving along well.
In the middle of the project, Jason landed a large commercial project. A few weeks later, there was about a day of work remaining. We had not seen Jason for a while. I asked him when he would return to complete the work. He told us “Tuesday morning, first thing.” By noon on Tuesday, we figured something was wrong. Upon contacting him, he said “Yeah – I can’t make it today. How about Thursday at noon?” Five times he failed to show up as promised. Finally, I sent a note that said “I think we may need to find someone we can rely on to complete the project. His response is something I had to share verbatim:
“Yeah probably a good idea to get someone else to finish it. I just don’t have time… I’m done with houses anyway. It’s way too much hassle for zero money. Sorry to disappoint you and you can have whoever finishes the job call me with any questions.”
And, just like that… via text, the electrician walked away from 20% of the job with less than a day of work to go. He explained to the person who referred him to me that there wasn’t any money in it, and the project was taking too long.
What Can You Learn
I don’t think either person in the stories is a bad or evil person. Rather, each one fell victim to poor business practices. Here are a few key lessons for your business:
- Be The Expert: Your clients engage you as a subject-matter expert. Once you agree to a scope, it is your job to manage the project and ensure you deliver results. Don’t let your problems become your client’s problems. If you have a labor issue, deal with it internally. Don’t air your dirty laundry.
- Don’t Whine: Business people earn their pay. Beggars get paid out of pity or compassion. There is no begging in business. If you are losing money or poorly estimated the project, don’t complain. I doubt that you call to gloat when a project was completed ahead of schedule with huge profits, right? Think long term. Learn your lesson, and serve your client. You just might earn repeat business or a referral.
- Think First: The electrician could have found a buddy to do the remaining tasks for 1/3 of what he was still owed. However, because he might have been embarrassed by his repeated no-shows, he opted to walk away. He could have said “I really messed up. I’ll have a guy there tomorrow at 8AM. If we don’t show or don’t complete the job tomorrow, you don’t have to pay me.” Think through your options before jumping off the cliff.
- Know Your Customer: I ended up finding some brilliant contractors who completed our project successfully. I’ve already referred each of them projects that exceed the value of our project. Your reputation is one of the most valuable things you have. Don’t wait to find out that the person you treated poorly has a large social reach. The easiest way to do this is to treat everyone with care and respect.
You might be a skilled professional with great technical prowess. But, if you are hired as a professional, you have to act like one. I’ve never seen a company communicate TOO MUCH with their clients. The formula is simple: Sell Value. Manage Expectations. Own All Issues. Deliver Results. Rinse. Repeat.
It’s Your Turn
When has someone done good work but messed up with communication or business practices? Take the conversation to Twitter or LinkedIn