Lose Customers to Make $ Part 1

July 5, 2005

New Construction

By: John Zink

What would happen if you passed on the next project offered by a bad G.C.?

Make better use of your available time by reducing the number of customers you do work for. Avoid doing work for the ones who always cause you troubles, pay late or take up a disproportionate amount of your time. Focus heavily on the ones who respect your skills, pay on time and don’t tie you up on the phone all day.

A GC or owner that is consistently causing you to spend time and effort catering to their every whim is not only making life difficult for you and your employees, they are costing you money. All that extra supervision and management attention is expensive time being wasted on that job. Sometimes you can make some that money back along the way, but chances are that you will never recover all the money lost on a project that you had to babysit. Worse yet, taking on that bad project may also have kept you from doing work on another projects that would have been more profitable.

What would happen if you passed on the next project offered by this bad GC? Losing this “bad customer” can really be worth it.

“But they have better paying jobs than my nice customers!” you may say. That may be true, but is it enough to really cover the extra costs you are incurring? In addition to the costs mentioned above, can you put a price on the cost of replacing a frustrated project manager or foreman or the productivity lost because the demotivated work crews are tired of being jerked around by the G.C.?

Do yourself a favor and create a list of all the generals and owners you do business with regularly. Create a list of qualifications for these companies. This list can include things like “Pays on time” or “Keeps on schedule” or “Runs a safe jobsite.” Rank each of the generals based on your experience working with them. Take a hard look at the lowest scoring companies and ask yourself if it is really worth working with them again.

Don’t be unprofessional and tell off your worst ranked general. Simply don’t bid on their jobs, or if you feel you must bid, bid what you think it will actually cost to do the job with THAT general. You also always have the option of discussing your qualifications list with that general and explaining to them why you have made the choice not to do work for them. You may find them much easier to work with following such a meeting.

Bonus Tip:
Owners need to listen to field personnel! If the owner is having the company doing special work and jobs for his golf buddy and the field people say that is dragging the company down, the owner needs to be receptive to this information. The field people are the ones who are making the money for the company and they often know how things are going before anyone else in the firm. The owner has to ready to say no to special favors for that friend.

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