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Tips For Dealing With Contractors

Written by: Tim Knox

Article Overview: This week we discuss how to find a capable building contractor to build out the location. And as this series has been thus far, this segment is based on my personal experience and offered to you warts and all. As with all of my columns only the names have been changed to protect the innocent, the ignorant, and the overly litigious.

Tips For Dealing With Contractors

This week continues my series on opening a brick and mortar retail store from scratch. So far we’ve talked about startup plans, market research, and scouting for locations. If you need to catch up go to TimKnox.com and click the "Columns" tab.
(NOTE TO STEVE - I’D PUT THE AL.COM ADDRESS HERE BUT IT’S TOO FREAKIN’ LONG AND MOST OF THE COLUMNS AREN’T THERE)

This week we discuss how to find a capable building contractor to build out the location. And as this series has been thus far, this segment is based on my personal experience and offered to you warts and all. As with all of my columns only the names have been changed to protect the innocent, the ignorant, and the overly litigious.

OK, so I signed my name in blood on the lease agreement and the space was mine for the next two years, succeed or fail. It was a large single room, about 1600 square feet, with a small storage area and two restrooms in the back. The floor was painted concrete, the walls were an odd shade of orange, half the lights didn’t work, and there was no hot water or air conditioning. And that was just scratching the surface. There were a few dozen other things that would have to be repaired or installed before I could move in.
Now a lesser man would have been intimidated by the huge task of converting this empty money pit into a thriving retail store in less than 60 days, but I’m an entrepreneur - which is a French word meaning "idiot who takes on the impossible," so I was energized by the challenge.

The question then became: who will build out this space? It certainly wasn’t going to be me. When it comes to construction I’m about as handy as a one-armed man in a clapping contest. It was time to line up contractors.

I don’t know about you, but it’s been my experience that a capable, reliable contractor is hard to find. Let me rephrase that: it’s been my experience that a capable, reliable contractor is damn near impossible to find. It’s easier to pin the tail on Bigfoot while blindfolded in dense fog than to find a contractor who understands the concepts of appointments and commitments. Nevertheless, my quest began with the Yellow Pages and referrals from friends.

I quickly felt like Henny Penny, desperately seeking anyone who would help me bake my bread. I talked to flooring contractors, painters, plumbers, electricians, security system installers, heating and air conditioner guys, and general building contractors. Most of them didn’t seem to give a rat’s backside if they got my business or not. Several didn’t bother returning my calls. Others came late to appointments and others didn’t bother showing up at all.

Now I don’t mean to say that all contractors are unprofessional, uncaring, and undependable. I’m sure there are many reputable contractors out there who show up on time, do great work, and bill you fairly. Then there’s the other 99%, many of whom are good old boys who operate out of their pickup trucks without the benefit of license, bond, or concern for their customers’ satisfaction. If you’re a contractor and want to argue these points let’s make an appointment to talk in person. I’m pretty sure you won’t show up.

Fortunately for me I managed to find a contractor in the 1 percentile that went above and beyond the call of duty to get the space built out on time; in spite of my demanding nature and daily changes to the plans. Email me and I’ll give you his name.

So how can you better your chances of finding a reliable contractor to build out your space? Pray, my brothers and sisters, and follow these guidelines.

Don’t be pressured by deadlines. When starting a business you’re usually under a tight schedule, which puts you at the contractor’s mercy (they can smell fear and desperation). They know that you need them more than they need you. This is a lousy place to be, but you have to be patient and don’t hire a contractor simply because he has a hammer and a pulse.

Ask to see licenses and bonds. As mentioned earlier, many contractors forego the formality of business licenses and security bonds. They prefer the "have hammer will travel" mode of business. If the contractor you’re interviewing can’t show you a business license and proof of a surety bond, move on to the next candidate.

Are they wearing a watch? If the contractor isn’t wearing a watch it’s probably because he has no concept of time or regard for schedules. I want to see a contractor wearing a watch that he looks at often. I want to see him carrying a daytimer and a cellphone with a number that I have on speed dial.

Ask for references and check the BBB. This should be a no brainer, but I’d bet most entrepreneurs never bother to ask for or check references. You want the names and numbers of at least five previous customers and always check their history with the BBB. Anyone can stencil their name on the side of a truck. Don’t be fooled into thinking that makes them a professional.

Next time we’ll discuss building permits, zoning laws, and building codes; and how your ignorance of these items can cost you a ton of time and a bundle of cash. The voice of experience sings again.

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Article Tags: armed man, brick and mortar, building contractor, entrepreneur, french word, hot water, lease agreement, lesser man, money pit, odd shade, personal experience, restrooms, retail store, scratching the surface, single room, square feet, startup plans, storage area, warts, word meaning



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Business Tips - How about: Tips for managers to handle employees more effectively? Tips on how to deal with difficult customers? Tips on how to deal more effectively with suppliers? The only three I have in mind right now, but will try to come up with something else. Chris
Re: Template of Service Agreement/Contractor Agreement - Shimmy- I, too, would be happy to share my template contract for a service provider. But beware, a template agreement may not be sufficient to properly address your needs. Some key differences between Employees and Service Providers: 1. Tax Status. Employers are responsible for withholding tax on employee's earnings. Independent Contractors are responsible for reporting their income/taxes. There is a significant reporting burden and liability associated with this. 2. Confidentiality/Intellectual Property. Often times, employee handbooks will specify an employees confidentiality obligations and many states impute a duty of loyalty. Contractors are under no such obligations absent a written agreement. Same thing for IP/Creative works. The copyright Act draws a sharp and significant distinction between employees and contractors when it comes to ownership of creative works. 3. Liability for tortious acts. Generally an employer is liable for the tortious acts of its employees under the theory of respondeat superior. An entity hiring a contractor may/may not be liable, but without a written agreement for the contractor to indemnify/defend the hiring entity, their may be little recourse against the contractor. There are many other subtle differences too numerous to mention. I hope you find this helpful.
Young Entrepreneur in International trading - I just turned 21 last week, and I currently own a international trading company doing trades between China, Taiwan, Thailand, and west coast of US and starting out in Canada soon. Dealing with gift items and general merchandise. We are also trying to sell some of the stuff we import as retail and wholesale products on the internet and to retail venders as we do have a lot of extra pallets that gets left over from our buyers.
Depressed Entrepreneurs - Thank you for your feedback. It seems to be the weather, isolation and some unfavourable projects getting my clients down. I personally find myself feeling quite grey with the weather. So much so that I spend as little time in my Vancouver office as I need to - it so slow and depressing there for me. In any case, thank you. Perhaps this is an issue we should be more proactive about in our entrepreneur resources. Dealing with the emotional issues of entrepreneurship. Thanks Kevin for the articles. The one was the exact one I was looking for. Must of been having a blonde moment in my searches
Re: Template of Service Agreement/Contractor Agreement - [quote="Dave_Adler":21fe7egl]Shimmy- I, too, would be happy to share my template contract for a service provider. But beware, a template agreement may not be sufficient to properly address your needs. Some key differences between Employees and Service Providers: 1. Tax Status. Employers are responsible for withholding tax on employee's earnings. Independent Contractors are responsible for reporting their income/taxes. There is a significant reporting burden and liability associated with this. 2. Confidentiality/Intellectual Property. Often times, employee handbooks will specify an employees confidentiality obligations and many states impute a duty of loyalty. Contractors are under no such obligations absent a written agreement. Same thing for IP/Creative works. The copyright Act draws a sharp and significant distinction between employees and contractors when it comes to ownership of creative works. 3. Liability for tortious acts. Generally an employer is liable for the tortious acts of its employees under the theory of respondeat superior. An entity hiring a contractor may/may not be liable, but without a written agreement for the contractor to indemnify/defend the hiring entity, their may be little recourse against the contractor. There are many other subtle differences too numerous to mention. I hope you find this helpful.[/quote:21fe7egl] I was thinking these same points as I was reading the earlier posts. I've been working with independent contractors for years - first as one, and then hiring many of others. These are three of the key things to be sure you include in your agreement. If they are truly an independent contractor, they are reasonable to handle their own taxes. I always include a confidentiality clause and very few have tried to break it. Liability can be a huge issue, depending on the sort of business you are in. In the US - there are all sorts of tax rules for state and federal government to distinguish if a person is or is not an independent contractor. If you make the wrong choice there are all kinds of penalties to be paid. Another thing that should be considered is that your business worker's compensation and/or liability insurance may have to cover these people. I know in construction, I'm charged for any independent contractor and their employees if they don't have their own insurance. That can get really pricey. If you're in a similar situation, talk with your insurance company, some will allow an independent contractor to sign an agreement that they will waive your responsibility to insure them. You would still need to pay for their employees, but it does save some money during an insurance audit. Chris


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