As I’m sure the vast majority of you are aware, the depressed home construction market has spawned a good deal of low bidding, even going so far as to spurn undercutting between contractors, forcing many qualified contractors out of seemingly solid leads. In such a climate it may be easy to fall into the web of low bidding. Indeed it is often hard to lay blame when considering the desperation that many contractors feel — contractors who were thriving just a few years ago.

Low bidding is not without its pitfalls, however, and it is vital that no contractor bid lower than his or her means allow, especially within the realm of remodeling.

Pitfall #1: Losing Potential

Low bidding can easily lead to taking a loss. A contractor, in the oft mad drive for work, might look at a job — quickly measuring up the job and the homeowner — and feel confident enough to bid lower than normal for the work. The general gamble here is that the job will run smoothly and according to plan, despite experience of the opposite. We often counsel homeowners to be prepared for just about anything when “opening up” their home. In this case, the same advice is useful for remodelers seeking to outbid the next guy — simply having work does not necessarily spell success.

Pitfall #2: Labor and Manpower

Labor is another key issue. You, the contractor, are responsible for paying your employees, whether the job is over budget or not. Low bidding combined with unforeseen circumstances can spell disaster for your job, finances, reputation, and that all-important relationship with employees. Furthermore, should circumstances send the job behind schedule, you won’t have the resource to recruit the manpower to get it done in a reasonable amount of time.

Pitfall #3: Reputation

Reputation. Low bidding is often looked sternly upon by other contractors and trades within the community. It may seem like the short road to ongoing work, but in the long run it can be more damaging than helpful. In tough economic times all contractors are forced to lower their bids, there is no denying that; we all have mouths to feed, and that includes homeowners. But on top of all the other risks involved in low bidding, which can also hurt your reputation, tarnishing the company name is not one to ignore. (more…)

In hard times, and with an unfortunate amount of time on their hands, more remodeling contractors are turning to canvassing in order to generate leads for work. But don’t think that door-to-door canvassing is only some desperate act relegated to recessions. That only increases the focus on a proven lead generating tactic, and one employed by many contractors for many years.

Yet canvassing is not easy work, and successful programs require trained canvassers (often the contractor personally) to be effective. That is why many didn’t think too much of it during the housing boom when competition existed more between homeowners trying to find quality contractors than between contractors trying to find work. But now the tables have turned and competition abounds in the home improvement market, and door-to-door lead generation has its unique benefits and requirements, such as:

1. Instant leads. You never know who awaits behind the next door, especially these days when the need for home repair is growing as yesterday’s homes age. The economy is weak but homeowners still want to remodel and repair, they just tend to be indecisive about it, enough so to hesitate in making the call to a contractor. But if a contractor knocked on the front door?
2. The trained eye. Hitting the streets can be an eye opening experience. As you stroll up to a house you might see a sagging gutter, peeling paint, or a shoddy roof. Immediately you know how to angle your pitch. You can focus simply on what the house needs to generate your leads, leads which would have gone unfound but for the art of canvassing.
3. Determination. Door-to-door lead generation requires a healthy dose of perseverance. In many cases, realizing a lead will require one or several call-backs, not to mention knocking on a heck of a lot of doors. (more…)