Saturday, November 28, 2015

THE CHEAPEST ISN'T CHEAP

It is true, there is always someone willing to do the job cheaper.

I have learned over the years between working in family owned, privately held, publicly traded, Fortune 500s, and now being as a business owner, a few things hold true.

One is, there are three types of companies to do business with:


GUY WITH A TRUCK - THE Pros - the cheapest, lowest overhead, has a business card, a phone, and some experience. THE Cons - this one is not insured. If the job is done right and there are no problems, this is the guy. The concern with this one is, there is no room for error. If the job is done wrong, and, or something is damaged in the process, there is no backing to pay for it. This "company" may or may not be legitimately registered. This company may or may not be properly licensed. When a job is done wrong or something is damaged, it cost more now than the original job scope for a legitimate contractor to come in, fix the problem, then re-do the job properly. Often, there are not clear, written, and signed contracts for these jobs. It can escalade quickly to the court room to be resolved at the expense of both parties.

MID-SIZED COMPANY - THE Pros - Large chance of dealing directly with an owner somewhere during the process of the job. Odds are an owner will be one who answers the phone (not just during a crisis). The owners are still involved in the day to day operations of overseeing the business. Reputation, testimonials, referrals, word of mouth, and reputation mean more to this company and it's people. As a client, you are never more than one person removed from talking with an owner, or someone with a steak in the company who can and will make decisions, quickly. These companies have years of experience. They do not arrive on the scene overnight, often from the "Guy with a Truck" who realized early quality and reputation is everything, and survived the first three years. These companies are insured and licensed appropriately. The low overhead helps to control the cost. Price of doing business is not the cheapest, or the most expensive. THE CONS - You often have to be referred / recommended by a friend to these companies to sort through them. There is often not a jingle, TV, or radio ad to help you memorize their phone number. The logo may or may not be recognizable. 


LARGE COMPANY - THE Pros - financial backing to address issues, damage, and concerns. These companies have a recognizable logo, advertisements, and have spent the money on marketing to get their name and logo out there for you. These companies have years of experience. They do not arrive overnight. These companies are insured and licensed appropriately. THE Cons - the chain of command can include laborers, project manager, office manager, someone to answer the phone to redirect your calls, possibly and automated system to handle call volume and redirect your calls, but press 1 for owner is not a choice. Not always, but by now the owners are often removed from the day to day operations of the company. Employees attitude and desire to quickly resolve issues is completely dictated by the culture in place around them, good or bad. These companies can be bought as an investment, removing the original owner and the experience of that owner. The clients pay for all of the brand recognition, advertising, familiar jingle, automated phone system, 800 number, and large staff. So the cost of doing business with these companies is reflected in your invoice.



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