The Last 24 Months

What does that conjure up for you: fear, reprioritizing, restraint, and opportunity?
It has been the most interesting period we have seen in our lives. Certainly, it has been for me. In the blink of an eye we have seen our financial world both globally, nationally and locally collapse. Without doubt, every person has been affected. I personally know of only a few who have benefited financially from these changes. For most, it has been a struggle to maintain and just stay in business. However, I’ve seen many whose personal resolve, faith in themselves, family and friends have strengthened. I’ve seen personal and spiritual growth that only trial and struggle can forge.

The way we do business has changed and will be changed forever. The old paradigms do not and will not work. What have not changed are quality, service, value and putting the client first. I’ve seen a move to more collaboration and alliance building between symbiotic businesses. Although it is more cutthroat than ever, I’ve seen competitors band together to get some piece of a transaction as opposed to none at all (if they were to “go alone”). I’m doing all of these tactics and more. We’re still reinventing ourselves. Hopefully, greed (which got us into this) will be substituted with pride in one’s work and empowering each individual to take control of his/her personal outcome.

What I do see, however, is a misguided shift in the way many customers are approaching potential work and the resultant change in contractors pricing strategies. When I ask many potential clients why they are doing their project at this particular time, a frequent response is “well, the economy is down and I think I can get a good deal.” There seems to be this feeling, “If I can beat my vendor/contractor to give me the lowest price possible, I’ll go with him.”

To those clients who want to “wishful think” they can get a deal, let me pose these questions. Has gas really gone down? Have your taxes (personal, property, user fees (cell phone cable etc.) gone down? Has your grocery bill gone down? Has your health insurance gone down? Has ANYTHING that you deal with on an everyday basis gone down? The answer is No! So, do you really think that my or any other business’ cost of doing business is going down? Again the answer is No!

I’ll grant you the economy is down. There is a certain validity that some money can be saved because of recessed costs. I will share with you, however, that any “real substantial” cost savings are an illusion. Granted, some material costs have gone down a little (very few) but skilled labor has not gone down appreciably. Since most remodeling projects are more labor intensive than material driven, the material savings might approach 2% -3% of the overall job cost. An $18 an hour skilled carpenter ($36 to $40 with burdens for taxes, workmen’s comp, liability and health insurance, vacation pay, etc.) might take a pay cut by $2 to $3. That is only a 1.6% reduction in cost. So, the only way I can really lower my price to my clients is if I lower my margin and work for little or no profit. How little of a profit I want to work for depends on the job and the client.

If you are thinking about making an improvement to your home or office and do not have plans I suggest that you interview us and as many contractors as you like. Identify one contractor (hopefully it will be us) that you know, like and trust. Pay your trusted contractor a small fee to prepare a proper budget based on a schematic plan and scope of work with reasonable finish assumptions. You will be the beneficiary of a far more accurate budget and can have confidence in a project which gets done on time, on budget, with few surprises and to your expectations.