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The Importance of Knowing your Contractors Business History

Some companies don’t have any history and some companies have a short history.  Some companies have a very long, well-documented history.  Some companies have changed over the years.  Their focus has changed as well as the type of work they do.  How they service their clients has changed.  Some companies have experienced quick change every year they have been in business and find it hard to predict where they will go next year.  Quick growth can put many strains on a company.  Unless a person has served a strong apprenticeship with another contracting firm, it will be almost impossible for an individual to rapidly put together a company and make it grow in an organized fashion.  It is difficult to develop a system that ensures great work while a company changes rapidly.  This latest downturn in the U.S. economy has taken a toll on contractors with less than sound reputations and those who lack financial solidity. Longevity suggests financial stability.

 

There is a fine balance of skills that a successful contractor must have.  He must understand both the business end and the building end of the business.  The business won’t be successful unless he can at least deal with both ends.  For instance, he may have been a talented carpenter before he started this business, but does that mean he can keep the books in order and do payroll for his workers?  There are a lot of hats a contractor must wear, and the success of the business depends on his understanding and ability to handle all of these functions.

 

Ask your prospective contractor enough questions to determine where he is on the continuum.  There are a lot of acceptable places to land, but many homeowners seem to end up feeling blindsided if they find out later that there was something about their contractor that was different than they had assumed.  Many older companies describe periods in the past that had specific characteristics – when they were a small company, when they had one location, when everything was run by the one owner, when they only did a specific type of job or a time before they had a successful business organization.  Some companies never seem to change and they are still doing business the same way they did thirty years ago.  How will these issues play out in your working relationship with this company?  Are the decisions they made that make up their history acceptable to you?  Do you think they made good decisions?

 

Unacceptable: The contractor has worked for or started several failed businesses.  He has multiple bankruptcies in his history.  He has a very short history with this particular company.

Good: The contractor is willing to openly share the history, structure and workings of his business.  He may be young, but he takes on jobs he is capable of handling.

Better: The contractor has systems in place to ensure the proper functions happen for each job.  He manages workflow efficiently.

Best: The contractor has office workers dedicated to managing specific areas and has delegated authority to competent people.  His employees have job descriptions.  He has had slow, steady growth over a period of years.  He is willing to share the history of the company and can be proud of many of the accomplishments the company has made.  Learn more about McCaleb Construction by clicking: “View Video” on the lower right hand corner of our home page: http://www.mccalebconstruction.com/

 
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