Construction and Contracting Business. Entrepreneur magazine
actually agreeing to work for a nightmare client at a price just a few percentage points over your break-even point. Working with bad clients during tough times substantially increases the risk of losing money and certainly will result in anguish and unhappiness.
How to Handle Client Complaints
Few contracting jobs are 100 percent trouble free. Many times the problem, such as a weather delay, is not the fault of the contractor. However, all complaints must be addressed and dealt with carefully. The best rule of thumb is to approach every complaint with the attitude that the customer is always right (even if it’s not true). There are some national department stores that have even accepted merchandise returns for products it does not even sell!
This approach does not always result in finding that the contractor is at fault. However, problem resolution must be the highest priority for a contracting company. Clients appreciate it when a contractor works with them instead of against them to resolve a dispute or misunderstanding. The following guidelines will help resolve complaints:
The ultimate goal should be to resolve disputes quickly and to the satisfaction of both parties. Contractors who stand behind their work even when they are not at fault reap huge rewards over the long term. Reputations are made by happy clients and additional profits are made from their recommendations of your business. This is not to say that a contractor should back down to the client’s demand on each and every issue, but he must decide which battle is really worth fighting. If the marginal cost of resolving a problem is less than the expected long-term benefit, it makes good sense to spend the time or money to satisfy the client.
Remember, social media stretches far and wide, so people no longer just complain to their friend if they are unhappy with your services; they complain to thousands of readers at a time. Therefore, make customer service a very high priority.
The best-run businesses can be severely hurt by unreliable suppliers or subcontractors. When an entrepreneur has built a solid team, marketed its services successfully, implemented sound financial-planning procedures, and hired skilled and dedicated employees, he or she should be on the road to success. However, an efficient operation can become derailed if the materials needed to complete projects are not available when promised. The same is true when working with subcontractors: They must be reliable and complete their portion of the project both on time and within budget.
The best way to avoid problems with suppliers and subcontractors is to have an excellent communication system in place. While fax machines and email can facilitate the ordering process, we recommend that new business owners personally meet with their suppliers’ representatives. By getting to know your salesperson, you’ll be able to shortcut problems or bottlenecks and avoid unnecessary delays in the implementation of projects.
TQM, or total quality management, is an approach to management that seeks to improve the quality of products and services by modifying services based on input from customers. The TQM process can be divided into four distinct categories: plan, do, check, and act. The first step is to gather data about a problem area, the second is to develop and implement a solution, the third is to verify the results by comparing before and after data, and the final step documents results and makes changes.
TQM was first used at manufacturing companies but is currently used in a wide variety of industries, including contracting.
The old adage “You get what you pay for” is often very true when considering which supplier to use or which subcontractor to hire. While your own work force might be top notch, your image will likely suffer if the materials or subcontractors you use are below average. You need to delve into the industry and do some research on suppliers in your area. Networking with other contractors, sometimes through associations, can be beneficial when getting some information about suppliers. Even as competitors you can both benefit either by ordering in greater quantity, which will be a bigger order for the supplier and may also result in a supplier offering you some better rates as a means of saying thank you for the referral. The contracting business is usually a small circle in most towns and even small cities.
“Competition is what kept me playing the psychological warfare of matching skill against skill, wit against wit.”
—LOU BROCK, HALL OF FAME BASE STEALER FOR THE ST. LOUIS CARDINALS
Competition is good not only for the national economy but also for business. It forces business to eliminate waste and improve efficiency. The lifeblood of our free market, it rewards the most skilled businesses and weeds out the most inefficient. When poorly run businesses cease operations, consumers benefit because the overall quality of products and services improves; surviving businesses benefit because poorly run businesses place a drag on the entire industry, and once they are gone, its image can improve.
It is fairly easy to enter the contracting industry but much harder to rise above the crowd and dominate the market. One result of the relative ease of entry into contracting is that a segment of the industry is poorly managed, and a few bad apples can spoil the whole bushel. While some industries, and I’m sure you can name a few, have chronically poor reputations, a few others are always held in high regard, and the largest segment has a mixture. Contractors fall into this huge middle with plenty of rave reviews about some contractors countered with many complaints about contractors who did a poor job or took forever to complete a project.
stat fact
While entrepreneurs make up only about one-quarter of workers in the United States, they make up more than 60 percent of the millionaires.
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