Consumers decide which contractor is best!

BY RICHARD P. DiTOMA, L.M.P.

contributing writer

A supply house counterman once told me that after years in the industry, and although he saw many plumbers each day, he still hadn’t met the second best plumber. Obviously he was sarcastically insinuating that all plumbers thought they were the best. But, as we all know, self-praise stinks!

On the other hand, if you are a PHC contractor who charges prices that will allow you to recover your real costs and earn the profit you deserve, while delivering excellence to consumers and, in turn, those consumer-bestowed accolades upon you, the rating of your talent will be more accurate, and the feeling you receive will be euphoric. And, you will be on the road to business success.

You don’t have to be big to be considered the best by the public. You don’t have to be the best in the country. You just have to provide excellent workmanship in a proper professional businesslike manner in the geographic area in which you provide service. To deliver value through excellence you must calculate your true cost and attain a profit in order to be able to afford to provide excellent service. If you don’t, you’ll have difficulty in delivering excellence when you have to cut corners to make ends meet. And, you’ll just be one of those contractors who are legends in their own minds.

In 2006, the New Jersey Herald decided to print an on-line survey, christened the “Reader’s Choice Awards,” asking their readers to choose the best retailers and providers of professional services. There were more than 80 categories from which consumers could choose the best burger, best tire store, best plumber, etc.

John H. Heine Plumbing & Heating Inc. of Sussex County, New Jersey was chosen by the public as the area’s “Best Plumber,” and won the Readers’ Choice Award in the plumbing category in 2006, and again in 2007.

I had the good fortune to first meet John Heine about fifteen years ago at a workshop I was facilitating for contractors in New Jersey. At the time, he was 2nd vice president of the New Jersey PHCc. Eventually, he would also serve as president of the njPHCc. He is a fine, upstanding gentleman, an excellent plumbing and heating contractor from northern New Jersey who has a beautiful wife, Dotty, and three fantastic children, Kristopher, Matthew and Elyse.

When I met John, he was like the overwhelming majority of contractors. His prices were not correctly calculated. His supply house bills were mounting. Finding good help was a daunting exercise. Stress and frustration were his daily companions.

John possessed not only the strength, but the desire to succeed. The workshop I facilitated on cost analysis gave John the opportunity to see the light. After the workshop, he sagaciously decided to do away with the flawed managerial methods he was employing and start implementing the theories and methods that I purport to be correct. He asked for my advice and support, which I gladly gave to him. To this day John and I constantly converse [especially about the state of the PHC industry].

In the beginning, John was nervous. It was only natural since many “Negative Nelly”-type contractors in his area told him he would soon be out of business.

But John saw the logic behind correctly calculating his costs before deciding to set his prices. By charging prices that would allow him to recover his costs and earn a profit, he gave himself an opportunity to succeed. He turned a blind eye and deaf ear to the negative opinions of those contractors who sheepishly followed the path of flawed business methods, and he stuck to his guns.

Although Dotty was skeptical at first, she supported John’s decision to try a different operational method. After all, the methods he had been using obviously weren’t working. He was only implementing those erroneous procedures because most contractors did it that way. You know what I mean -- guessing at prices, charging the “going rate” (even when it’s wrong), and hoping that by putting in as many hours as it would take (becoming a slave to his business), he could somehow make up for using erroneous numbers.

As a result of changing his business managerial procedures for the last fifteen years, through John’s determination and implementation, Dotty’s support, and when asked, my advice, he has enjoyed the rewards he deserves for the risks he takes and the value he delivers to consumers through his successful plumbing and heating business. By delivering excellence to consumers he shows them the value they receive from his firm.

By consistently existing in business and earning a profit, he has proven three things to those “Negative Nellie” contractors (some of whom are no longer in business) who said he would fail. That is, 1) they were wrong then, 2) they are wrong again, and 3) they are still wrong. How do we know that? Simple -- the consumers he serves said so by choosing him as the best in his service area.

When addressing consumers’ needs and wants, his company delivers top quality. John, Dotty and his son, Kristopher, are professional, polite, courteous, neat, clean and prompt in their delivery of excellence and satisfaction. Since his clientele want to continue to have their plumbing and heating needs met in that manner, they realize that they must pay for that type of service in a fashion that will allow the business to recover its costs and earn the profit its shareholders deserve.

John tells others, “After being in business for several years, we found ourselves charging the ‘going rate,’ missing paychecks and struggling to pay bills on time. Rich’s method of developing a sound business billing system turned everything around for us. For over a dozen years we’ve been paying ourselves, and paying our bills on time, while taking discounts. That’s why every one of our trucks has the words ‘Thanks Rich!’ painted on them.”

For years John has given me the credit for his success. I do thank him for the accolades, but I have always told him that he was the person responsible for his success because he was the one who decided to learn, understand and implement the theories and methods I showed him. If he didn’t decide to change, and then change, he would still be in the position he was before doing the right thing. John recently conceded to me that his success was also due to his winning team (John, Dotty, and Kristopher).

While John and his son, Kristopher, take care of their clientele’s requests, Dotty takes care of the business’ administrative needs. Together they are a successful, winning team that delivers excellence to the public.

John understands that there are two types of consumers -- “price buyers” and “value buyers.” He knows that buying the manufactured item of a certain manufacturer based on price makes sense because the product the consumer receives is the same regardless of the price paid. He also knows that buying the services of PHC contractors based on price is absurd. That’s because all contractors are not created equal.

Like consumers, there are two types of contractors. There are those who deliver excellence and those who don’t. Excellence is not just doing a neat job. It is also being there when needed; standing behind workmanship; disclosing all known facts to the consumer so they can make wise decisions; giving consumers good advice; and being financially prudent so the business will be there tomorrow to address the future needs and wants of the consumer in a timely and superb manner.

Value buyers know the difference between good contractors and those who are not so good. And in John’s area, those value buyers have rewarded him with the title “Best Plumber” not once, but twice. In order to be able to afford to deliver excellence, John must recover his costs. In order to have a reason to be in business, John must make a profit. It’s that simple. In order to attain cost recovery and profit, John must act like a business person, not just a person in business.

If you want to truly be considered the best, you must follow John’s example. You must recognize problems. You must seek the solutions that will resolve the problems. You must understand and decide to correctly implement those solutions. And then, you must apply those solutions.

If you don’t, you will only be a legend in your own mind. And, like the proverbial ostrich, your head will be buried in the ground while your butt is exposed to a world of “price buyers” who will continue to kick you in your exposed area as they move from one ostrich to another.

I salute John, Dotty, and Kristopher for delivering magnificent quality in a financially prudent manner, which will allow them to continue to distribute superior service to the consumers who have realized that John H. Heine Plumbing & Heating Inc. is the best.                   

 

Richard P. DiToma is a business consultant and contractor with 36 years of experience in the P-H-C industry. He conducts seminars, evaluates business operations, publishes customized price guides for contractors and offers continuing support.

His book -- “Solutions Management Theories & Methods for the Contracting Business” -- deals with solving pr-oblems contractors face; identifying & calculating costs; developing proper profitable prices; addressing consumer questions; hiring and evaluating technicians; and logical management procedures

It’s also available as a “Workshop On Demand” for individual businesses (from one person to multi-person businesses); contractor groups  (organized or informal); trade associations; and wholesalers to the trade.

Date: Arranged according to your schedule

Location: Wherever you wish. Richard P. DiToma will come to you -- or you can come to him. Contact Richard to find out if there is a workshop coming to your area.

His other book -- “Readily Available Pricing Information Digest 2006” -- for the plumbing-heating-cooling contractor service price reference book is available with plumbing &/or heating &/or cooling section(s). To receive more info about his services, to order his books or to contact Richard at 845-639-5050, by fax at 845-639-6791 or via email at richardditoma@verizon.net