I recently read this blog about soliciting bids in the midst of our current “housing bubble.” The article advised homeowners against low-balling when examining contractors’ bids for their work. It reminded me of where I was working when the housing boom finally started to go flat. At the time I was working in southern Oregon. It was a hotbed for new construction during the boom as retirees and newlyweds flooded the area, known worldwide for its landscape and moderate climate.

The town also flooded with contractors. Anyone with a hammer and a pick-up truck was in the business. But when things started to collapse (last I heard the number of homes on the market was up roughly 1000 percent), many contractors were left holding their hammers. That’s when the undercutting started. Bids dropped like Wile E. Coyote off a cliff.

Suddenly we were losing work, right out from under our noses, because everyone was trying to cut costs. For a time, quality of work gave way to quantity of work, often awarded to the lowest bidder. Not surprising, this only complicated things. Just a few months later we found ourselves being hired to finish work left incomplete by low-balling contractors who were either fired or just disappeared.

The moral of the story here is that underhanded bidding is not only unfair but unhealthy as well. Unhealthy for business, unhealthy for everyone involved. Even in a time of recession, the traditional rules of bidding still apply and contracts are not won, nor is work retained, simply through low bids. (more…)

Gone are the days when you could handpick your customers and you had clientele coming out of your ears. With jobs in short supply, reputation and customer satisfaction are more important than ever. So what steps can you take to improve and increase your business?

I spoke with the general contractor and owner of a construction company recently. He spoke about how he is giving out his personal cell number and answering all calls. In a fairly rural area, he is willing to drive a couple of hours each direction to give estimates if it leads to more contracts. He has a crew to keep busy, and he knows they depend on him to generate business for their own livelihoods. Not only must the small business owner carry the burden of their own finances in this economy, but those of their employees as well. As this contractor realizes, he must be available at all times to potential clients to make sure he doesn’t lose any prospective jobs.

Using this same company as a firsthand example, they have also increased the amount of services they provide. They have implemented high-tech software to facilitate plan drawing and design, created a website integrated with local real estate companies, and volunteered their services at a few high-profile community events. This progressive approach to advertising has helped their reputation and made their company name more recognized throughout the community. (more…)