Be honest with yourself

BY RICHARD P. DiTOMA,
contributing writer

When PHC contractors are not honest with themselves, they will have great difficulty being successful in business, which will increase their business-related stress levels. I decided to spend some time at the counter of a plumbing and heating wholesale supply house and ask contractors to anonymously fill out a survey. The title at the top of the questionnaire was Be Honest with Yourself Test. The exercise would give me insight into the mindset of contractors. They just had to read the questions and check the Yes box or the No box.

I worded the questions in a manner that should have resulted in all the Yes boxes being checked if the contractors were truly being honest with themselves. As I suspected, some contractors just don’t know how to be honest, even when they are addressing themselves. Contractors who deceive themselves are acting foolishly. Those who are honest, and intelligent enough to seek information that can help them succeed, have a chance of reaching their goals. Following are the questions, results and my comments.

1. Do you agree that you could easily shortchange yourself on a bill to a client by $1 per tech hour? Ninety-two percent answered yes; 8% lied to themselves by checking no. I guess that 8% don’t have erasers on their pencils, since they don’t make mistakes. The truth, however, is that any PHC contractor can shortchange him/herself. At $1 per hour, the error can cost the contractor more than $1,700 per tech per year. Many contractors shortchange themselves by, minimally, $30 per tech hour. That’s over $50,000 per tech per year. Ouch! At least the majority answering this question admitted that they could shortchange themselves. They have an opportunity to rectify their problems. The question is whether or not they will seize the opportunity.

2. Is running your business sometimes stressful? Ninety percent said yes; 10% answered no. Even the most composed business person suffers from business stress from time to time. It could be caused by shortchanging yourself, poor employee morale, creditors who want their money now, “consumers from hell,” etc. Some stress is part of the nature of business. Controlling stress requires an intelligent business person (not just a person in business) and a sound business game plan.

3. Are you the slightest bit uncertain of the true costs you incur to operate your business? Sixty-nine percent checked yes; 31% checked the no box, which makes no sense. Even the most successful contractor has reservations about his/her true costs. The costs that others charge you for the services/products that you need to run your business can change at any time. That alone would make all contractors slightly uncertain about their costs. 92% of contractors acknowledged in question #1 that they could easily shortchange themselves and only 8% answered no. Putting aside the 8% who didn’t think they could shortchange themselves by $1 per tech hour (ha-ha), every contractor is uncertain of their true operational costs.

4. Are you the slightest bit uncertain that your choice of profit margin can help you reach your goals? Sixty-four percent answered yes; 36% checked the no box. Once again, 92% answered yes to question #1. To choose a proper profit margin that will help them reach their goals, contractors must be certain of their true costs. If they could shortchange themselves, they obviously don’t know their true costs or are just downright clueless. In either case, the lack of knowledge about their true costs suggests that there is uncertainty about their profit margin.

5. Are you the slightest bit annoyed by other contractors that lowball their prices? Seventy-seven percent confessed that they were annoyed; 23% said no. Wow! I’ve been in the contracting business for over 41 years. Except for those contractors who lied to themselves, I can’t remember speaking to a contractor who truly wasn’t annoyed by lowballers. Even lowballers are annoyed by contractors who charge less than they charge.

6. Do you keep your prices lower than you would like them to be to compete with those lowballers? Fifty-six percent checked yes; 41% checked no. 3% checked neither and put their heads in the sand like the proverbial ostrich. One of the most frequently asked questions that contractors ask of each other when they get together is, “How much do you charge for (any type of job)?” The reason that is asked so often is because they don’t know their true costs and want to know what the competition is doing. The fact that they ask suggests that they do keep their prices lower than they would like them to be. The result is a price that becomes the “going broke rate” for that type of job.

7. Would you like to increase the amount of money your business brings in by 30% to 70%? Ninety-two percent said yes; 5% said no; 3% checked neither. The only reason businesses other than not-for-profit and non-profit businesses exist is to earn a profit. The difference between winners and losers in the contracting business is that winners maximize their profits and deliver excellence to consumers, while losers flounder and drag the industry and themselves down. The 5% that said no and the 3% that checked neither are classic examples of oblivious people who should not be operating a contracting business.

8. Would that increase of 30% to 70% lower your business stress levels? Eighty-seven percent said yes; 10% said no and 3% said neither. All of the problems that contractors incur are due to poor business plans. The biggest problem is selling services at or below their true cost of operation. From that stems all the other problems, including the amount of business stress that contractors place upon themselves. It only stands to reason that if they improve upon the biggest problem they lower their stress. The 10% that answered this question with a no are obviously ignoramuses that should not own a business. The 3% with the neither answer and their heads in the sand are too brainless to realize that their butts are sticking out for passersby to kick.

9. Would that increase of 30% to 70% help you enjoy life more? Ninety-four percent said yes, 2½% said no and 2½% answered neither. At least, by the time they got to this question, more contractors were honest with themselves. Only 2½% directly and 2½% indirectly (by omission) lied to themselves by claiming that the increase would not allow them to enjoy life more.

Those contractors who answered no to any of those questions steer our noble industry in the direction of mediocrity. In other words, they give all of us a bad name. In order to deliver the excellence consumers deserve for their hard earned dollars, it is imperative that contractors make their businesses financially strong so they can properly take care of their clientele. To accomplish this feat, contractors must be as certain as is possible about: 1) their true costs, 2) the implementation of correct profit margins that will help them reach their goals and 3) the fact that the business techniques they employ are sound, legal and ethical.

Everyone is ignorant, because no one knows everything. It’s said that “ignorance is bliss.” But when a person in business stays ignorant about that which they have a duty to know, their foolishness turns their ignorance into stupidity. Their ego blinds them to their shortcomings and further enhances their propensity to do foolish things.

Fear stops people from doing things. Fear is a good thing when it stops someone from doing something wrong or dangerous and a bad thing when it stops someone from doing what is right. In that instance it increases the ability to be foolish. Fear is closely associated with anxiety, which makes people worry about that which probably won’t happen. All in all, ignorance, ego, fear and anxiety are the enemies of people in the PHC contracting business.

My coaching skills have given contractors who have properly implemented my concepts the ability to fight these four business enemies while increasing their revenue by 30% to 70%. If you would like my help, give me a call. As always, I wish you good health and much wealth.

Richard P. DiToma is a contracting business consultant and active PHC contractor with more than 40 years of experience in the PHC industry. To receive more info about his Contracting Business, Coaching, Consultations, Business Books, Seminars with Solutions, Customized Price Guides and, Customized Business Forms, contact Richard by phone at 845/639-5050, via email at richardditoma@verizon.net, by FAX at 845/639-6791 or mail to R&G Profit-Ability Inc., P.O. Box 282, West Nyack, NY 10994.