Subscribe to our newsletters & stay updated
The words, “The truth will set you free,” first appears in the Bible: John 8:32. If you think about it, this statement not only applies to biblical issues, it also refers to your personal and business lives. I’m sure you don’t like dealing with deceptive people in your personal or business life. None of us do.
In business, deals that are fraught with deception often lead to arguments. Those disagreements could lead to lawsuits, but always lead to additional stress and frustration. I’m sure you don’t want to be involved in lawsuits and I know you don’t want or need additional pressure and irritation.
The way to avoid these contentious issues in your contracting enterprise is to implement business protocols that are steeped in integrity. That is, being honest with strong moral principles and ethical uprightness.
Integrity starts within you. If you are not honest with yourself, you cannot be honest with others. Let’s look at some truths that you must realize in order to be honest with yourself regarding your contracting business.
20 Business Protocols Based on Integrity
Truth No. 1: Two plus two equals four — it equals no less or no more. Being in business requires you to be a prudent and accurate bean counter so you can recover the true operational business costs you incur in serving the public. This gives your business the opportunity to bring in more money than it costs you to operate it.
Truth No. 2: Prudence means that it is imperative you control your true operational business costs so you are not increasing them in a foolish and unnecessary manner. This will allow your prices to be intelligently competitive.
Truth No. 3: There is a difference between intellectual competition and foolish competition. Any fool can open a business, run it improperly and into the ground. Smart, prudent and accurate competitors succeed while fools rush to increased stress, frustration and failure.
Truth No. 4: Accuracy in bean counting requires the knowledge of the fundamentals of mathematics and the common sense to apply practical concepts that will give you the opportunity to reach your goals.
Truth No. 5: The goal of for-profit businesses is to bring in more money than the business administrators incur to run the business.
Truth No. 6: Before you can develop prices that will allow you to bring in more money than your business operational costs, you must identify and calculate all your true tangible and intangible business operational costs.
After all, if you don’t know what your true operational business costs are, you can’t possibly know if your quoted prices are indeed above your true costs. You would be wise to realize that you only have three choices when it comes to your selling prices: sell at, below or above your true proportionate business operational cost to perform any service.
Truth No. 7: The way to recover your true necessary operational business costs and earn the profit you deserve above those costs, while competing with foolish contractors who set their prices in line with the “going broke rate” of other foolish contractors, is to deliver excellence to consumers. Excellence lasts longer, giving consumers more value for their hard-earned dollars.
Truth No. 8: Excellence costs more to produce than mediocrity.
Truth No. 9: All consumers want excellent service.
Truth No. 10: Excellent, quality workmanship and the use of top-quality material leads to loyal, repeat clientele.
Truth No. 11: Mediocre-quality workmanship leads to consumers who only use mediocre contractors when no one else is available.
Truth No. 12: Pricing services based on volume as used by manufacturers in mass production is the wrong way to price services performed by service contracting businesses that provide services or products on a one-to-one ratio with the consumer.
Service contracting businesses should not be confused with businesses that manufacture production-line products.
In the construction and service industries, one technician hour can only produce one technician hour of production, even when you have repetitious work where all the buildings are the same. Therefore, all proportionate costs must be attributed to that technician hour. This differs from production-line products, where one employee hour may produce many units.
This problem is removed by addressing each job on its own individual characteristics.
Truth No. 13: Not knowing how to address consumer questions and remarks in an intelligent, correct, rapid and honest manner does not build confidence in the minds of consumers who are contemplating whether or not they will avail themselves of your services.
To paraphrase an old saying, “If you don’t say anything, no one will know how smart or dumb you are. If you open your mouth, they’ll know for sure!”
By learning to put your brain in gear before opening your mouth, you will not put your foot in your mouth.
Furthermore, if you want to charge fees that will allow you to enjoy life as doctors and lawyers do, you must learn to speak like a doctor or lawyer. That is a comprehensive and understandable manner.
After all, as a contractor, you are a doctor of buildings. And, as a contractor, you enter into contracts. That means you must have the necessary knowledge to address building concerns as well as the intelligence to enter into contracts that you can and are willing to fulfill.
Truth No. 14: Hiring the wrong people diminishes your ability to succeed. There are times when you will have more work than you can handle. There will be times when you are twiddling your thumbs. The first thing you must address is whether you really need help.
Working a little overtime might take care of short, abundant workloads. If your abundance of work seems to be the growth of your business instead of a short-term spike in normalcy, then you might decide it’s time to add a technician.
In addition to hiring the right technicians, you must also hire the right administrative staff since they are usually the first people to speak with the consumers who are considering whether to avail themselves of your services.
And, as we all know, first impressions are lasting.
Truth No. 15: Not managing the business in an orderly and efficient manner leads to chaos. Being organized makes work easier and gets it done faster. This holds true when you are doing technical work or fulfilling administrative duties.
Organize your business by documenting and tracking transactions, making forms which will help make your administrative workload easier, tracking statistics to make wise decisions, developing service agreements, installing discount protocols, and avoiding the “consumers from hell.”
Truth No. 16: Making decisions based on emotion rather than statistics leads to emotional decisions with no data. In which case, you will make the wrong decisions. Truth requires actual statistics so your decisions can be made based on fact rather than emotional fiction.
Truth No. 17: Allowing the four enemies of business — stupidity, ego, fear and anxiety — to cloud logical thinking processes hinders logical thoughts. In turn, flawed business procedures are implemented as stress and frustration pressure increases and the propensity for success decreases.
Truth No. 18: When you fool yourself into believing that you can perform a service faster than it typically takes to perform it and base your price on unrealistic proportionate labor/overhead costs, your actual costs will be higher than your flawed estimated costs, resulting in a loss to your business.
Truth No. 19: Using inferior material lowers the value of your services while increasing the potential for callbacks after the service is performed. And, as callbacks increase, your ability to enjoy the peace of mind that comes from repeat customers decreases.
Truth No. 20: When you don’t believe in the truth that sets you free, you are destined to be imprisoned by your own business.
Robert Leroy Ripley, an American cartoonist, entrepreneur and amateur anthropologist, created a cartoon concept that expanded to numerous media formats as well as radio, TV, books and museums. You probably remember hearing of Ripley’s Believe It or Not.
I caution you to take these truths of which I have written and “believe it or not” at your own peril. Remember, it is the truth that will set you free.