Contractors, Avoid These 5 Common Mistakes
Contractors make mistakes every day when they’re running their home improvement business. In fact, many of these errors can cost your construction business more money than it’s making! That’s why it’s important to avoid these common mistakes when you’re in charge of overseeing or operating a contracting project. With the help of this guide, you can learn to avoid these five mistakes that contractors make in negotiations, project estimates, and more!
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5 common mistakes that contractors make
1. Not having business insurance
As a contractor, you need to make sure that your company is properly covered. Work with an insurance agent who specializes in contractors’ needs and be sure to add business-interruption coverage—in case of a disaster, you need to ensure that your company won’t lose out on revenue while it recovers. You also should have liability coverage in case anyone gets hurt on one of your projects. If you own a subcontracting firm, it’s crucial that all your employees are adequately insured as well.
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2. Insufficient preparation
When you’re trying to do a good job on a project for another person, there are some steps you can take to make sure that you get started with an advantage. One of these is preparation. If you do what most contractors do and just show up in order to try and win a contract, you’re putting yourself at a disadvantage.
By not being prepared when going into negotiations or dealing with a project estimate, it’s easy to say something that doesn’t reflect positively on your business or is flat-out wrong. In fact, according to recent research from Edelman Intelligence, more than half of contractors say they’ve lost jobs because they weren’t prepared— so being ready from day one is essential.
3. Not having a contract
The most common mistake that contractors make is not having a contract at all. While it may seem like a given, and because most people don’t like to think about possible risks, many contractors go into business with no formal agreement in place. Because of that, they put themselves at risk of not getting paid for work completed, or worse — getting sued because of something they missed. Before you begin work on any type of project (big or small), be sure to get it all in writing.
Never assume that things will be different on another job; if you’re starting off with one project without a formal agreement in place, there’s no reason to believe that will change on another job.
4. Not asking enough questions
Asking questions during a job is not only an opportunity to learn more about your client’s home improvement project but also allows you to better understand what you are being asked to do. Don’t assume that your client knows exactly what they want; it’s your job to make sure they are getting what they want by asking them open-ended questions about their specific needs. If there is one common mistake contractors make, it is assuming too much and not asking enough questions.
5. Lowball estimates
The worst mistake a contractor can make is underestimating how long a project will take to complete. Lowballing estimates may cost you future work, and it can hurt your reputation if you’re responsible for botched jobs. Keep in mind that setting an accurate estimate isn’t just about giving clients what they want; it’s also about making sure you don’t overwork yourself and your employees by assigning too many projects to your calendar.