Myth No. 2 — Dumb Competition

A lot of folks in the industry might jump at the chance to have competition who don’t know their, uh, ankle from third base. What about it? Would you like your competition to really be in the dark, you know the DUH boys? Not me, I want my competition to be sharp. Did someone out there say, “Are you nuts?” Well my answer is,” Yes, about some things like fishing but not about this.”

We all pay pretty much the same for materials, if you have decent credit (you can be dumb and lucky and have decent credit, at least for awhile). So that means we compete based on what we charge for labor and what kind of price we get from trade contractors; well OK, some of us throw in a few bucks for supervision and a little paperwork, you know like I-9s and building permits and insurance, workers’ comp and benefits, silly stuff like that.

But the Dumbster doesn’t have to bother with all that “feel good” stuff, he or she is a real hard working sort, does all the work themselves, no silly taxes to pay (you know the FICA and worker training), an occasional laborer (but he’s an independent contractor of course) really doesn’t count, until that is, he gets hurt, or steals some materials or something from the homeowner.

So Mr. Business-smart Challenged & Company saves a lot of moolah that we have to spend. He seems like a better deal for the unsophisticated client, you know, the one that says, “But Freddie’s Free Lunch and Remodeling says they can do this for half of what you are going to charge. Why shouldn’t I use them; our money is really tight?” How do we get rid of, in business that is, these characters, ‘cause when one hits the wall, another one is starting out.

If you have been in the middle of this “storm” of junk competition, how to you handle it, what is our way out, how can we fix this? Help the competition, that’s how. For those of you still reading after that point, here’s why. Over 90 percent of new companies last less than two years before they go bust, even some of the smart ones, why; they have a fair amount of work? They don’t charge enough. They hit the wall, taking what could have been a good job, with them. Most of the time, the customer who can least afford it, is the one that takes the most expensive contractor, the lowest bidder.

If we are going to get these business killers out of the market, we have to make them smarter, they need to know they have to charge a fair price to succeed. When we get that done, they’re still competitors, but at least now we’re competing on a more level basis — it might come down to who’s better at sales, and I’ll take that anytime.

When we make the case in our communities that our trade association members are the best, most reliable source of contractors because we police our ranks and our members are trained to hazards, ethics and worker safety, green building procedures and support the community, we win and they win. Let’s convince the smartest of the dumb competitors to join our associations and that will help the others hit the wall sooner.

Many cities and some states think that licensing is the answer but it’s not; we are. As you may recall, I have no problem with licensing if it’s tested and it’s enforced but before that comes, get active in your HBA and go after the dumb competiton. If you help make one smarter something weird happens, you get smarter too, while you’re here ...