Right now, we have a thread going (The Scandalous California Contractors' Board) that is drifting into "so guy is cheaper than me."
I submit that "cheap" is not a business plan; it's a bankruptcy plan. "Cheap" can only have value when one is comparing bushels of apples; that is, when you are no different than another guy.
Sure, you can take steps to minimize overhead .... to a point. You can live in a tent, flout laws, take shortcuts ... only so far.
The 'key' is to differentiate yourself from the rest of the pack. Here are some ways I've seen it done:
- How you present yourself matters. A professional appearance will, in many cases, eliminate any desires a customer might have to hire some guy who looks like a bum;
- Niche marketing. Doing something someone else might not do very often, or have to hire a sub to do for him. (Do you have asbestos certification?);
- A single outstanding characteristic the customer identifies with your firm. For example, being 'fast,' or causing minimal business disruption, or sticking with a job until it works- or no charge; and,
- Scheduling flexibility.
You have to communicate your strengths to the customer. A name like "911 Sparky", for example, will suggest that you are available at odd hours for critical work. Or, a simple claim that hits home with the customer, like "The only guys with their own brooms."
What you want to do is limit the customers' tendency to consider alternatives to hiring you. You want him to think "sure, I can hire XYZ, but then I'll have to wait six months ... while YOU are ready now."
This is not idle chat. I have one customer ... a governmental body ... that sometimes has to hire someone other than me. I manage to keep 90% of their business, though, because the other guy always manages to look poor when compared to me. I "shine" by knowing the building, and fixing the stuff the other guy either flubs, or gets wrong. While he's arguing over the punch list and change orders, I'm setting things right. By the time the dust settles, the customer is thinking 'I really wish we had Reno do the job.'
