The Design Builder's Blog

Update On The Lowes 2X4 Story and Controversy

Last week on September 9, 2014 I posted a blog titled California Judge May Have Created Huge Challenges for Contractors.  At that time the information reported indicated that a California Superior Court judge by the name of Paul M. Haakenson had ordered Lowes to pay $1.6 million dollars for selling 2x4’s that are not really 2” x 4”.   The story and my blog caught quite a bit of attention in the construction and building materials industries.   Additional information has now surfaced.

Some clarifications

I had originally found the information in an article posted to ProSales magazine, a publication for professional building products dealers.  Remodeling magazine recently posted an update about the story, offering some clarifications provided by the West Coast Lumber & Building Material Association (WCLBMA).  In the article WCLBMA clarified the $1.6 million final judgment Lowe's reached with the State of California appears, at least in part, to involve labeling certain non-wood products as wood as well as the incorrect labeling of certain other lumber products.

In an August 27th press release by Marin County, the county where a local weights and measures division visited one of Lowes’ retail store locations, said the district attorneys' civil enforcement action claimed that "Lowe’s stores throughout the state unlawfully advertised structural dimensional building products for sale and those advertisements stated, contained, and described product dimensions that were not the actual product dimensions".  The press release also states; “The judgment requires Lowe's to immediately remove products from sale or correct false, misleading, deceptive or inaccurate product descriptions when Lowe's knows or should know that the product descriptions are untrue or misleading”.

Don't blame the source

It would appear that in the original interview ProSales had with Lowes about the story the fact that Lowes was selling 2x4’s that did not meet the standard accepted size of 1 ½” x 3 ½” was a detail left out of the interview.  I say this with a high level of confidence because I find ProSales to be consistently accurate and the magazine editor, Craig Webb, does a great job vetting the information being published. 

Do contractors still have plenty of reason for concern?

On the other hand I and many of the commenters at my blog are still concerned about the ruling details Lowes and other retailers must now follow.   According to another ProSales article Judge Haakenson’s order lists the following three main rules for the retailer to follow going forward:

• "Common descriptions" must be followed by actual dimensions and labeled as such. For instance, a 2x4 must be followed with a disclaimer that the wood is actually 1.5-inches by 3.5-inches and include a phrase equal or similar to "actual dimensions."
• "Popular or common product description," like the word 2x4, must be "clearly described as 'popular name,' 'popular description,' or 'commonly called.'"
• Dimension descriptions are required to use the "inch-pound unit", meaning they must include abbreviations such as "in., ft., or yd.," and can't use symbols like ' or '' to denote measurements.

The concern I am expressing is  if these rules apply to retailers will they also apply to contractors? If they do, or eventually will, contractors in California and the rest of the country may also run into challenges not only with the government, but also with their customers.   Perhaps trade associations such as NAHB and NARI should proactively seek out the answer to this question to help guide and protect their members and the rest of the construction industry.   The RRP Rule came about because our industry didn’t proactively deal with the hazards of lead during construction on its own before the government stepped in and dictated regulations many do not agree with.  

Perhaps this case against Lowes can serve as a warning and the industry can get out ahead of what the government could require of contractors.  If these are or do become requirements contractors must follow perhaps the trade associations and industry publications can inform contractors before they experience costly challenges that could put them out of business.

What are your thoughts? 

Are you concerned enough to ask your trade association to look into this? 

Note:

Click here for an update on this story

Seven Reasons Why Most Contractors Will Never Be Able To Retire On Their Own Earnings

Here is a wakeup call prediction for contractors and for tax payers as well;

Most residential construction business owners will never be able to retire.  They will have to work until they die or are too old to work anymore.  If they don’t or can’t work until they die, then they will have to get on the government dole so they can get housing and food to keep them alive. 

The same is actually true for most Americans.  According to an article on the Money Morning web sitecurrently retired Americans have less than $25,000 or less in savings and investments, and 31% have less than $1,000.  It’s sad to me to think though that construction business owners, after years of owning and running a business, won’t have enough money or investments accumulated so they can support themselves and their significant other during retirement.

Here is another scary fact found in that same Money Morning article.  47%, of current retirees were forced to retire early, mainly because of disabilities, poor health, or the loss of a job and the inability to get a new one.

Let me offer just a few reasons why I am so sure most contractors may never be able to retire:

1. In many of my seminars I ask contractors to raise their hands if they are on the path they need to be, financially, so they can retire.   It’s rare that 10% of attendees raise their hands.  I also think many assume they will be OK and raise their hands.
2. Most contractors don’t charge enough to properly run their businesses and pay themselves for their efforts.   They seem satisfied with earning just enough to stay afloat in business and in their personal lives.  In fact, when they take into account the number of hours they work each year, most admit they earn less per hour than most of their employees.  Some even admit they make less per year than their carpenters.  I know a good number of them, probably out of embarrassment; don’t admit their financial short comings.
3. A good number of construction business owners don’t make enough money to support their families.   In fact for a good number of them, because their wives have jobs and therefore provide the family’s health insurance, they are able to keep their business doors open and pretend everything is just fine. 
4. Only about 20% of construction business owners know the true cost of being in business.   Of the other 80% a majority may be able to estimate project costs accurately, counting very stick and brick, but then they are guessing on the real break even burdened cost of estimated labor hours and also use the wild ass guess method (WAG) when it comes to the markup they use to cover overhead and profit to price their jobs.
5. In addition to using the WAG to price jobs, most contractors have no idea how overhead and profit works.   As Melanie Hodgdon points out in her Remodeling magazine article titled “Four Ways Hopeful Thinking Can Ruin You”, many contractors say “Yeah, that job was a mess, but at least I didn’t lose money on it."   The sad reality in this assumption is that the job didn’t cost more than they sold it for, but they didn’t earn any money to cover their overhead and or any profit.  So in reality they did lose money and there will be no profit on that job to save for retirement.
6. Most construction business owners I speak with haven’t done any retirement planning.  In fact 56% of American workers haven’t bothered to figure how much they’ll need to retire comfortably either. (Source: Employee Benefit Research Institute) How then could these contractors even know how much money they will need to retire and when they can actually retire?   For these contractors I am pretty confident they won’t have what they need.
7. The last and my final reason (although there are plenty more) most contractors will never be able to retire is because they see themselves as contractors instead of business owners.   It’s a simple fact to recognize that when a business sells at the right price it earns a profit.  But when the business owner straps on his tool belt he is only earning a wage. 

So, what should contractors in this position do?

Here is a short list:

• If earning a wage isn’t earning you enough to retire on, you might want to learn how to become a real business owner.
• If you are using the WAG method to price jobs you might want to advance your math skills and or find someone who will do the math for you.
• If you have been selling on price to get work you might want to invest in some professional marketing and sales skills.
• If you won’t do anything about these challenges you might want to look into how to apply for government assistance now so you’re ready to do so when your body eventually gives out.

Checklist of What LBM Dealers Will Need To Do To Get Ready For Gen Y Contractors

Back in February I did a presentation at the NRLA LBM Expo titled "Will Your LBM Business Be Ready For The Next Generation of Contractors”.  At that seminar I shared my thoughts about what LBM dealers and distributors need to consider about Generation Y members who will soon take over as the next generation of contractors.  I estimate that Gen Y will become the majority of construction business owners within the next ten years.  Although a handful of attendees already had Generation Y contractors on their radar screens, the rest of the attendees admitted they had no idea regarding the significant changes their businesses (or their employers' businesses) would need to make to be ready to sell to and service this new type of contractor.

If like many of the attendees at that event this topic is new to you, check out this blog post titled “Will LBM Dealers Be Ready For The Next Generation of Contractors” for a little more insight before reading the checklist offered below. 

Checklist: What to do to get your LBM Business ready for Gen Y Contractors

Here are a few pointers for LBM dealers who want to get ahead of the curve and be ready for Generation Y before they are already the majority of construction business owners. 

• Learn who Generation Y is, what’s different about them and why they are different.
• Keep in mind that some Generation Y contractors will be tech savvy, but, more important, most will be tech dependent.
• Recognize that in addition to being your next contractor customer, they will soon make up the majority of your retail customers and your work force as well.
• Learn how, and the many reasons why, they will be using technology inside their businesses and will be expecting you to use it as well.
• Commit to what your LBM business will need to do to get ready for this new generation of customers and paying for the changes.
• Be realistic about the condition and effectiveness of your current marketing methods, sales methods and service offerings. 
• Recognize now that your sales methods and maybe even your sales staff will need to be replaced and the related changes will take years to put in place and master.
• Learn how to interact and communicate with Generation Y in ways they will respond to; using both technology and social media.
• Figure out what you need to do, physically and emotionally, so contractors can shop, price and buy from you via your web site.

Keep in mind this is only a partial list.

LBM Dealers and the distributors that supply Gen Y will need to make many changes to their business models and tactics.  In order to successfully complete and support those changes they will need to upgrade both their staff and their technology.  Here are a few quotes from Gen Y contractors that should help motivate both to get going before it’s already too late:

“A lot of the suppliers are represented by older men and most of those people are just not tech-savvy”

“For about three-quarters of our suppliers, we’re using them because of their customer service and account management.  If they’re not into electronic communication, it’s probably not going to work out very well”

“For us technology isn’t a nice thing to have, it’s a necessity.”

LBM Dealers, Will You Be Ready For The Next Generation of Contractors?

I hate to be the bearer of bad news; I’m really just the messenger.  Servicing and doing business with contractors is about to change dramatically, again.  That’s right, after the home building crash, if as an LBM Dealer you thought you had finally figured out how to get business from the remaining contractors, get ready, things are about to change, again! 

At the upcoming NRLA LBM EXPO in Boston I will be presenting a lunchtime seminar for LBM Dealers on this topic titled “Will Your LBM Business Be Ready for the Next Generation of Contractors?”  This blog will give you an idea of what the seminar will include.  I hope you can attend.

Many LBM Dealers struggled to make it through the recession. A good number of them stayed alive by finding better ways to service and sell to remodelers.  Savvy dealers quickly identified the unique differences between remodelers and builders.  Realizing the differences they changed things like their selling methods, pricing strategies and product offerings to capture needed business and revenue.   As a result many remodeling businesses enjoyed much better service and could offer their clients a greater variety of products and price points.  Dealers who did not make the changes, or didn’t make significant enough changes, ended up closing their doors and or were bought up by larger dealers.

The mindset of the contractor will be changing

One thing that remained fairly constant during this evolution was who the contractors were and how they did business.   For decades the majority of contractors operated their businesses as technicians.   They thought of themselves as contractors, not construction business owners.   The joy of building things and advancing their trade skills where the driving factors that made them who they were.   As a result of this mentality, and the fact that there was almost always way more work available than contractors to do it, they could command profitable prices.  And unfortunately, at the same time, they could also get by with poor business practices in the areas of sales, marketing and accounting. 

Now is the time to recognize almost everything in the residential construction industry we could assume to be considered the norm about contractors, the marketplace and doing business will be going away.  A new generation of contractors is rising to the surface.  This next generation won’t accept the old ways of doing things.  Get ready for Generation Y!

Here are several factors causing and or contributing to the coming changes

• About nine of every ten remodeling contractors go out of business within ten years of getting started.  That means the construction industry has a new generation of remodeling business owners about every ten years, regardless of other factors. 
• Employees who worked at failed firms often start their own businesses.
• Due to their age and physical abilities, a good number of baby boomer contractors will also be retiring.   Many of these businesses will either be led by the next generation of the family or will simply close up shop.
• Many “old school” contractors who operated on “low bid” will need to work until they retire, die or their bodies give out due to a lack of retirement savings.
• Many older contractors will end up working for more savvy younger construction business owners.
• The next generation of remodeling and construction company owners will come from members of Generation Y. 

They are tech savvy and ready to take on the world 

At about 80 million strong, Generation Y is hell-bent on changing the world and is totally impatient with outdated business models.   How they will do business and how they will buy what they need from LBM dealers will be dramatically different than what dealers have experienced from all previous generations of contractors. Use of technology, theirs and yours, will be the biggest factor.

Dealers and their staff will first need to recognize that this change is coming and that it will be significant.  Then they will need to learn about these new contractors and embrace the changes needed if they want to be ready for Generation Y as they arrive.   If not ready for Gen Y, like the “old school” contractors, LBM businesses will eventually end up closing their doors, seeking new leadership to survive, or be swallowed up by dealers who were the early adopters of new ways of doing business.

Will Drones Be Watching and Servicing Contractors In The Near Future?

Drones may soon become part of everyday life for contractors.  Depending on their purpose, drones could be a contractor’s helpful friend or his worst nightmare.   If your business has something to hide there could be danger from up above.  If you need a quick delivery a drone may soon be the method of choice.  Either way, you might want to make sure you have your hardhat on, both to protect yourself from falling items and to avoid an OSHA violation.

If you think my imagination has run wild check out the video below.   For about $1200 bucks you can get a pretty easy to use drone that will communicate with your IPhone.   I watched it and it got me to thinking about how contractors and others may use drones in the near future.   I encourage you to watch it and imagine ways you could use one for your business.  After you watch it check out my short list of likely uses for contractors, the government and even the vendors you do business with.  

Here are a few ideas that came to me after watching the video

Ways contractors might use drones

• Measuring the roof without pulling out a ladder.
• Check the condition of the chimney flashing.
• Jobsite fly around replaces the walk around to see how things are going.
• Create bird’s eye view before, during and after videos or photos of your projects to use for marketing on your website.

Ways vendors might use drones

• Fast delivery of that one joist hanger you’re missing so you can put the floor sheathing down and get the wall framing going
• The local print shop delivers the three copies of the plan set you need to apply for that building permit this afternoon.
• Your exterior products supplier sends a drone over your job site to measure the roof and then gets the materials ready for first delivery in the morning.

Here are a few ways the government might use drones to keep an eye on contractors.

• OSHA inspector uses it at a large development project to scan the entire site for violations.  Site conditions are all recorded on video and individual clips of each offense in action are included as part of the violation notice the GC receives.
• EPA can do RRP inspections at will.  The camera software in the drone has the ability to recognize ladders and the drone is programmed to only fly by homes built prior to 1978.
• Your State DEP sets up their drones to fly by all DEP sites to make sure all water management requirements are in place and any land clearing work completed doesn’t exceed what was approved.

Predicting the future or pure fantasy?

I first came across this topic in a discussion posted to LinkedIn by Alec Caldwell.  One commenter said Caldwell was "fear mongering" and suggested he get a grip on his imagination.  I disagree and think the uses for drones will only be limited by our imagination or government regulation.   We’ll have to see which one wins out. 

Here is one example where the government used drones to help convict a North Dakota farmer, claimed to be the first case of its kind.  

How about you?  Is this science fiction or can you imagine other uses for drones that would help and or hinder contractors?

Stars are Aligning for Contractors; This Year Could Be the Turning Point in Your Business

The economy and the remodeling marketplace finally seem to be improving.  It’s not happening as fast as we all might like, but it is slowly improving in what appears to be a sustainable way.  And, as a result, consumers have been gaining the confidence to once again spend money on and invest in their homes.   If the recession caused your business to downsize or slow down, now might be the time to decide whether you want to and will commit to improving and growing your business.

Indications that contractors and the supply chain are both optimistic

I am still being cautious about making such a statement about the marketplace, but a few key indicators have prompted me to do so.  

First, is the number of contractors not only contacting me for help with their business systems, but actually committing to the investment required to do so.  About a year ago I noticed the inquiries picked up, but after we discussed the typical costs to put business systems in place many contractors decided to hold off, citing concerns about short work backlogs and protecting their cash flow requirements.   Now, with a good backlog of work under contract, both the calls and the commitments have dramatically picked up. 

Second is that the supply chain is finally spending money again on marketing to and investing in their remodeling contractor customers.  Although still not as busy as they used to be, trade shows this past year have grow in size again as more manufacturers and distributors are back participating at the shows.   Also, since about early this past summer, the number of manufacturers, distributors, dealers and trade associations contacting me about speaking at their events has also dramatically picked up.   The supply chain is once again spending money to educate their staff as well as their contractor customers, as a way to grow their businesses as well as their customers’.  The Rhode Island Builders Association Boot CampsThe Rhode Island Builders Association Boot Camps I was involved with is just one example of this trend.

Don’t get left behind

If you’re a contractor thinking about the future opportunities and potential for your business now is the time to act.   As I discussed in a previous blog titled “Generic Contractors Are Fading Away, Brand Names Are Shining”, those contractors who are investing in their business systems and their brand have been capturing good projects with good margins.   Those who have been and continue to protect “their status quo” are going out of business or continue to struggling financially. 

Here’s how I look at it. 

About 75-80% of remodeling consumers buy predominately on price.  Also, my experience tells me, about 75-80% of contractors are generic commodities in their market place.   That means that if you want to capture business from the 20-25% of consumers who select a remodeler for reasons other than lowest price you better get going improving and differentiating your business.  The idea is to build your market share, in your target market, before someone else does.

Here’s a quote by a famous baseball personality that I think sums things up

"There are three types of baseball players: those who make things happen, those who watch it happen, and those who wonder what happens."     

 Tommy Lasorda

Get Ready, Complying With the RRP Rule Will Get Much More Expensive

EPA to raise RRP fees

Businesses complying with the EPA RRP Rule should plan ahead for increased costs.  Because of EPA's mismanagement and lack of accountability regarding the RRP Rule, the actual costs to administer and enforce the rule have so far dramatically exceeded the fees collected from complying firms.   To address the shortfall of funds EPA plans to raise the fees related to the rule.  This will likely mean that the cost of firm certification and firm re-certifications will dramatically increase.  And, because the RRP rule is required to be self funding, it looks like EPA will need to raise the fees high enough to offset their losses since the program began, as well as their ongoing costs going forward.

The increased costs will definitely add to the advantages non-complying firms have been enjoying so far, further punishing legitimate businesses for complying.  I also predict the increased fees will promote more illegal work, therefore more kid will be needlessly poisoned because many in our our government are incompetent.

The amount of the EPA RRP fee increases is not yet known

Because EPA did not do an accurate estimate of program costs and revenues when they set their original fees, money coming in to support rule administration is not coming anywhere close to the actual costs.   If EPA were a for profit business they would already have gone out of business when it comes to RRP.   But, because the EPA and its leadership are not held to the same standards as for-profit businesses and business leaders, not only will they be allowed to continue operations, those at EPA who are responsible for the RRP rule get to keep their jobs and paychecks, despite such dismal performance.   And, rather than concentrate on fixing their business plan to create financial health, EPA can simply charge their customers more money.   The problem is that their customers, those who must comply with the rule, do not have any other options they can choose from to do business with.  

Here is a summary of information to help you understand what has happened and what to expect going forward

Note: Info below is from an EPA Office of Inspector General Report dated 2/20/13 titled "EPA Is Not Recovering All Its Costs of the Lead-Based Paint Fees Program”

• EPA had not conducted a formal cost study to determine its actual program costs before establishing fees.
• According to the report, EPA is losing money on the RRP program.
• Based on the agency’s estimates since the RRP rule went into effect in 2010, the total loss will amount to around $16.4 million by 2014.
• Fiscal year 2010, the first year of the rule, actually netted a profit of $8.9 million, but costs are exceeding fee collections by $25.3 million for 2011 through 2014.
• The report pointed out three issues contributing to the EPA’s unrecovered costs.

1. The agency has not conducted recommended biennial cost reviews to ensure that fees are in line with costs.  (Think WAG: "Wild Ass Guess")
2. The fee structure also does not take into account all the indirect costs needed to recover the cost of administering the RRP program.
3. RRP firm participation is lower than the EPA projected.

• The report says that by not recovering all of its program costs, “the federal government did not collect funds that otherwise could have been available to offset the federal budget deficit.” (In business speak this means they contributed to the deficit by operating beyond their means.) 
• The OIG recommends that the March 2009 fee schedule for the lead-based paint program be adjusted “to reflect the amount of fees necessary for the program to recover the costs of implementing and enforcing the program.”
• The report indicated that the EPA agrees with the recommendation and "intends" to take “corrective actions".  
• According to the report EPA agreed and plans to conduct a biennial cost review of the RRP program in Fiscal Year 2013.

Wrapping this up!

Here is what the EPA Inspector General had to say:

“The President’s Budget Message for FY 2012 states that reducing the long-term federal deficit must be a priority. The federal government is looking for ways to save money and cut unnecessary costs. We believe that EPA could help the federal government in this endeavor by collecting more lead fees to recover more of its costs"

So to save money and cut unnecessary costs, does your business raise its prices too?

Is It Time For A New Way To Professionalize The Remodeling Industry?

Trade associations and even individual remodelers have been trying for years to improve the professionalism of the remodeling industry.  I’ve been involved in this effort myself now for over 20 years.  I definitely think all the effort has been worth it.  Not because I think all the effort has made significant improvements, I really don’t think they have.  Rather I think all the effort has been helpful in preventing the situation from becoming worse.   That’s my opinion from my perspective.  Your opinion may be different.  If it is please feel free to respectfully express it below in the comments area of this blog post.

Unfortunately I think our industry has become excellent at being mediocre.    

And, it appears, the majority of remodeling consumers have even settled on the fact that they will need to accept mediocre performance from their remodeler if they want to get work done on their homes.  Let’s face it; there is even a majority of home owners who literally care about nothing more than total price when they go about selecting a remodeler.  In my opinion most consumers spend more time researching options about the purchase of a television before they choose one than they do before choosing a remodeler.

Maybe we need to think about why consumers spend so little time and effort choosing the right remodeler.  

Has our industry not offered to educated consumers properly so they know how to differentiate between remodelers?  I think it has.  Let’s face it many good remodelers and the trade associations they belong to have been trying to do so for years and although all the effort may have been successful with some consumers, there are still plenty of illegally operating and poor quality contractors working on homes every day.  If consumers were not willing to hire them they wouldn’t be working.

I think it’s time for some radical tactics to change the situation. 

I’ll through a few out here to get the conversation going.  Feel free to offer your opinion on them or to offer your own.

Strategy #1

Unless there is skin in the game for the consumer on this issue why would they change their attitudes and behaviors?   Maybe we should make it mandatory that consumers only hire legal and legitimately licensed contractors for home improvements.  Also, why not make them responsible for the due diligence required to make sure their contractor meets these requirements.  And, if they choose to work with an illegal contractor, leave them on their own.   For example leave them no ability to take the contractor to court.  In fact, why not arrest and fine the home owner for hiring an illegal contractor?

Strategy #2

How about before any real-estate is sold why not require a comprehensive inspection and inventory of the home be done?   By doing so we could document the condition and configuration of that property.  The next time that property is sold, the same inspection should happen again; plus any changes in status should be identified and listed.  Then the property owner should have to provide proof that any work done that required a building permit and final inspection sign-off was actually obtained.  If it’s a pre 1978 home all required RRP paperwork must be provided as well.   If any of this can’t be provided by the seller, the property can’t be sold.  And, if such information cannot be provided the entire property must be brought up to current building code standards and be dust wipe tested for lead paint contamination before it can be sold.

The likelihood of implementation of the two scenarios I offer above is slim to none

I’m sure everyone reading this would have their own reasons why.  Current politicians would never support such strategies because if they did they would never get reelected.   If all home owners had to pay the full legal price of home improvements the majority of Americans could never afford to own a home and homes would probably never become an investment.   I all contractors had to be legal the majority of current contractors wouldn’t do it, many probably couldn’t dfo it.

Reasons or excuses?

To me it seems that all the reasons why we can’t professionalize and legalize the remodeling industry are really just excuses. Because our industry doesn’t have the guts to do it, often for selfish reasons, it will likely never happen.  

If we don’t do it ourselves we may be at the risk that the government will try to do it and force it upon us.   Just think about the RRP rule if you don’t agree. 

And, if this home buyer who bought a flip gone wrong gets his way we might all regret our industry didn’t take our destiny into our own hands…

What say you?

The Marketplace is Improving; Are You Sure You Are Working With The Right Vendors?

The marketplace seems to be picking up for contractors.  Many are reporting increased leads and sales.  With increased demand for the products contractors need to build their projects we will definitely see supply and demand challenges with local lumberyards, the big boxes and specialty product vendors.  This supply and demand challenge is one of the reasons many in the construction industry are predicting as much as a 25% increase in cost on many building products.  Although contractors need to be aware of these increases as they price their projects, I suggest they also need to make sure the vendors and suppliers they purchase their materials and products from will be prepared for the increased demand.

If you are a contractor who has been buying on price from vendors who have been selling on low price to get your business, you might want to think twice.   If that vendor has a good business, low or no debt and is using efficient business systems and technology to keep their costs low, you may be OK.  But if your vendor has very high debt, has cut back on staffing, equipment and service, just so they could sell at low prices, their business may not be prepared for a surge in sales as the economy improves.

Choosing and keeping the right building product dealers for your business and your customers

Here are some things to think about regarding the vendors you are currently using.  This same list can also help you decide which vendor or vendors you should work with going forward:

• Many lumberyards and specialty dealers are short staffed.   To save money and to stay in business many of these businesses have reduced staff during the recession and often times the people they let go were the higher paid employees.   If this is a tactic any of your suppliers used they may have let go many of their most knowledgeable staff.   The remaining staff, often less skilled and far less knowledgeable about building products, construction and contractors, will be challenged to serve contractors as the number of contractors doing work and buying materials picks up.
• Building product suppliers who have high debt may not be able to finance the cost of increasing their inventories to keep up with the predicted supply and demand challenges as the economy improves.   If this happens at your supplier you may find that many products, even common commodities like framing lumber, will be out of stock.  Imagine going to the lumberyard first thing in the morning to get the materials you need to frame a deck or reframe that kitchen, only to find out you can’t get what you need.  To keep working that day you might have to pay for longer lengths than you need, or might even have to drive to a different supplier in the hopes that they will have what you need so you can work that day.  Remember, if you lose two hours chasing materials, in reality you also lost two hours of productive time on the job.   That would mean you lost a total of four hours you could have billed your client for if the materials were already at the jobsite.
• Lumber and building materials dealers who cut back on staff may also be challenged to help you sell to your customers.   If you had a customer who wanted to see the door, cabinets or windows you recommend, will you be able to send them down to your local supplier to see the products they are looking for?  What is the condition of the showroom?  Is there going to be anyone there to make and take the time to meet with and help your customer?   Will the person working at that dealer have the sales skills, product knowledge and knowledge about you and your business to help you make the sale?

The risks of low price

Selling on low price typically puts any business on a path to failure.  Sure, it may seem to help things at first when money gets tight.  However, unless they can ramp up their businesses, and do so before the market place improves, they will be forced to play a game of keep up and catch up as their customers’ needs and demands for products and service increases.   Working with a low price vendor might seem attractive, but can you be confident they will have what you need when you needed it?   If they require a deposit on special order items, are you confident they will still be in business by the time you expect delivery of what you ordered?   What will your customers think of you and your business if their project start date gets delayed and or the completion date gets extended because you can’t get what you need from your vendors to keep their project and your business on schedule?

Summary

Choosing the wrong vendors by saving a few bucks on materials may cost you and your construction business lots of wasted time, money and the valuable referrals your business has enjoyed from what used to be happy customers.  I highly recommend you choose your vendors wisely!

Should You Participate In LinkedIn Discussions If They Are Moderated?

Recently I have noticed that several different discussions in the groups I follow on LinkedIn are now being moderated.   When I submit a comment I get a message that my comment will be reviewed by the moderator before it is posted.   I have decided I will no longer participate in these moderated discussions.  The problem is I haven’t yet figured out how to tell if a discussion is being moderated until I hit the submit button.  Does anyone know if there is a way to tell if a specific discussion or group is moderated?

I understand that some moderators with good intentions may be trying to eliminate the non-professional comments and personal attacks.  If you frequent LinkedIn groups with contractors as members you have probably noticed that there are some members who resort to foul language, unprofessional comments and even personal attacks.  I have also noticed one particular commenter who seems to always find something wrong with someone’s opinion and proceeds to kill the purpose of any discussion simply by participating.

Top two reasons why I have decided not to participate

1. First, my feeling is that they are not discussions if someone can decide whether or not they want my comment to be part of the discussion. I say this because I have noticed both on LinkedIn and on several different national newspaper sites I visited and commented on the moderator limits the comments to only those that support their own opinions and or to control the direction of the conversation.  We live in a free country where our freedom to express our opinions differentiates us from many other countries on this planet.  It pains me to see that some are trying to take that freedom away from us to serve their own purposes and or to purposely mislead readers.
2. My second reason is because unless comments are posted instantly, and someone reading the comment can in turn instantly respond with another comment, it’s not a discussion.  Instead it becomes a collection of thoughts.  Think about it.  Unless the moderator is sitting at his or her computer waiting for the next comment, there will be gaps in time between when the submit button is clicked and the moderator reviews the comment to decide to post it or not.  This being the case I have already noticed that the comments, when eventually approved, become out of order and out of context.   That’s not a discussion.

I think both reasons above are actually starting to reduce the conversations at these sites and is already compromising our industry’s ability to openly share information and help each other.  This is a very bad thing for our industry.

I see and offer three options to address this concern about discussion moderation.

1. LinkedIn could make it obvious to group members which discussions are moderated. I think this should be done in an obvious way right within the discussion’s description at the top of the page.  If every discussion posted to the group will be moderated, I think that needs to be obvious as well.  Also, to avoid wasting time, I think all moderated discussions should somehow be flagged within in the emails we all receive as group members letting us know about new discussions and new comments on existing discussions.  If done this way we can decide for ourselves if we want to participate or not, in a discussion and or a group.
2. If group members are behaving in an inappropriate and or unprofessional manner, there should be a defined way to have their ability to participate in the current discussion instantly terminated.   And, if they have been terminated from a certain number of previous discussions, perhaps they should be permanently removed from the group, maybe even from LinkedIn.
3. The last one I offer is the one I hope doesn’t become the default choice.  With this third option those of you who feel the same way about this as me will have no choice but to discontinue our participation and or membership in a group that allows moderation of comments before they are posted.

We can be frank, but we must remain professional

I hope those of you reading this see my purpose in writing this as a genuine attempt to protect the value we get and enjoy from productive and professional discussions at social media sites and online discussions.  To protect and facilitate discussions where all members can openly share advice and opinions without the risk of attacks and being subjected to foul language.   As one frustrated commenter put it, LinkedIn should be a place where we can safely ask questions and as true professionals safely help each other improve our businesses and our lives.  If you have a suggestion to help accomplish this, I hope you will add it to the list I offered above.

What say you? 

If you agree something must be done about this concern please make others aware of this blog post so they can speak their views as well.  Although I will post this blog to LinkedIn discussion groups, I cannot know for sure or control whether they are being moderated or not.   If you find this article via LinkedIn, rather than post your comment on LinkedIn, post it here.  I promise I won’t moderate the comments you leave here at my blog, every comment will be posted right away.   I have and will however delete inappropriate comments and or comments with foul language.  My blog use policy can be viewed here.