What Contractors Should Know About Choosing Customers
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There are plenty of articles on the Internet and in magazines that focus on what customers should look for in contractors for their home renovation projects, but what about the other side of the coin? The following is a list of helpful things professionals should keep in mind when thinking about taking on a project with a new client.
Do some research
The number-one tip for customers is to do their research on local contractors, starting with asking their friends and family for recommendations. Well, there’s no rule that says contractors can’t research potential customers. By inquiring about potential clients in professional circles and looking for information online, contractors can better determine how reasonable and flexible a person may be. Sites such as Angie’s List and HomeAdvisor might lead to reviews customers have written about other professionals.
Open and transparent discussion of the scope of a project, as well as the budget, is paramount in new customer negotiations. A potential customer who doesn’t seem to have a clear vision of the project could be a red flag. Customers like this could cause problems, such as adding on to previously agreed upon project specifications, causing change orders, or changing their minds midway through. Alternatively, if a customer is too set on their vision, talking them out of unreasonable requests might prove challenging. Getting an idea of a potential customer’s ideal budget before you submit a bid can also provide a good idea of that customer’s expectations.
During these discussions, contractors should determine how involved homeowners want to be. For example, some homeowners attempt to save money by ordering materials themselves. However, this can cause delays if simple mistakes are made. Contractors can earn customers’ trust by being honest with them about the potential downsides to DIY sourcing and ordering. This is also an excellent opportunity to drop the names of any retailers with whom contractors have established relationships, and may be able to offer deals and discounts.
Include emergency funds in your bid
Getting an idea of a potential customer’s ideal budget will help contractors gain a better understanding of his/her expectations. For example, a customer’s ideal number being unreasonably low could be a red flag. This customer might need extra education on the potential pitfalls of a renovation project and other reasons to pad the budget. Also, many homeowners are encouraged to take lowball bids out of the running right off the bat, so contractors need not worry about submitting a higher bid. As long as contractors can breakdown and explain the facets of the estimated cost of a project (materials, labor, overhead, etc.), a higher bid won’t necessarily take a contractor out of the running. In fact, showing a capacity for expecting the unexpected may increase the potential customer’s trust.
Set up a payment plan
Home renovation professionals should know consumers are being advised to expect initial payments of more than 30 percent. The logic is, the higher the initial payment, the less confidence the contractor has in his/her own work. With this in mind, contractors will still want to ensure they receive fair compensation, and a payment plan is an easy way to do that. Conventional wisdom says a fair payment plan will look something like this: a down payment of less than 30 percent, approximately three payments as the project progresses, and a final payment of 10 to 15 percent to be paid after the customer feels the project is completed.
Consider communication and comfort
Ultimately, a successful business relationship depends on the level of comfort between the two parties. If a contractor feels he/she can communicate successfully with a potential customer, then the transaction will go much smoother for both parties. Conversely, if a contractor feels like he/she is chasing the customer down or the customer is otherwise unresponsive, this could cause issues.
Put everything in writing
This is another tip given to most consumers, but it goes both ways. A highly specific and clearly defined contract protects all parties involved. Professionals should make sure to go over standard contracts with potential clients, so they are familiar with basic operating procedures. Special attention should be paid to project-specific changes. Ensuring all parties are crystal clear on the expectations of a given project will lead to success.
Contracts are another place professionals can increase customer confidence. Anticipating a problem and addressing it upfront demonstrates experience and expertise. For example, if a renovation includes removing walls, including a plan for how to proceed if one of the walls turns out to be load bearing can save everyone future headaches and avoid a delay. Other common surprises that pop up during home renovations include mold, foundation damage, outdated electrical systems, and mis- or inconveniently placed pipes. Experienced contractors will have no problem establishing expectations for how these standard issues will be handled if they arise.
Get a reference
Going back to the beginning, all consumers are advised to start their search by asking their friends and family for recommendations. When a project is completed, it would behoove professionals to leave an extra card (or two) with happy clients and ask them to pass it along. The best defense is a good offense, so if the professional was happy working with a particular client, he/she can be fairly confident in receiving referrals for similar customers.
Similar to homeowners, home renovation professionals need to ensure they are working with the right people. Taking these precautions will help contractors build successful and productive business relationships.
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