Masonry Magazine August 2001 Page. 32
10 Dumbest Things That Contractors Do to Spoil Their Own Success
You may find this difficult to believe and you may even want to sit down - because what I'm about to say may shock, startle, and shake the very foundation of your being: We contractors are not perfect.
("We'll pause here for a moment to let you regain your composure... all right, let's continue.)
Well, somebody had to say it. The reason I criticize our humble collective is because everyday I look around and see construction contractors including myself doing our very best to cause our often paltry profit margins to become even more paltry by not doing the things that we know will help our businesses become stronger and more successful.
Of what things do I speak? Well, let's take a moment and examine the Ten Dumbest Things That Contractors Do to Spoil Their Own Success... and you tell me if anything sounds familiar.
We agree to schedules that we know are unrealistic.
Face it, we've all had times when very late in the (often) harried negotiation process for a contracting project - when the budgets, preliminary drawings, specs, hard costs, and finally contracts have been hashed and re-hashed - that the real completion date gets unceremoniously interjected into a conversation leading up to the signing... and (entirely coincidental, of course) it's a full 2-1/2 weeks shorter than the construction window that you'd been working under all along. So what do you do? You're sure not going to trash the job at this stage, and you can see the owner is serious about the date. So, for the first time on this job (there'll be more), you reluctantly accept the change in plan... and hope you can work it out later on down the road.
We agree to profit margins that are lower than what we really want or need.
Recently, I accidentally left a packet containing my own in-house estimate breakdowns (including profit & overhead numbers), material proposals, and sub-contractor quotations at the office of an architect whom I had met to close out a job (oops!). Embarrassed and feeling that I'd let my deepest and darkest secrets out of the bag, I expected to receive a call from the architect chastising me for taking advantage of the owner and reaping such outrageous profits on the job. Well, to make a long story short, I did receive the call the next morning, but instead of a reprimand, the architect - barely able to contain his laughter-snickered into the phone, "is this really all you guy's make on these jobs?"
I think it would have felt better to have been chastised for being greedy. But, the episode only solidified what I'd felt for quite some time: that our industry has gradually, but determinedly, grown into a disproportionately competitive (compared to many other private business sectors) enterprise. Rapid and raging competition, owner sophistication, and the loss and lack of control of our own destinies (via competitive bidding, owner/architect-partisan contracts, control documents, and bid-packages, and more) has ultimately resulted in eroding away any and all chance that the average contractor enjoyed of reaching consistently sustainable profit margins. Growth and success, it seems, has become as much of a product of providence as skill, sweat, and diligence.
We Try to Be the Owner's Friend.
This all-too-human attachment commonly results from being in prolonged society with the owner over an often (more on page 34)