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Columns

Stupid Do-It-Yourself Projects Where Contractors Should have Hired a Pro

By Monroe Porter
July 1, 2005
Just as there are certain circumstances where consumers should not do it themselves, there are times when contractors should also not try to solve their problem without professional help.

Ever been on a complicated job where a do-it-yourself homeowner is looking to hire someone to help clean-up a mess he or she made? Just as there are certain circumstances where consumers should not do it themselves, there are times when contractors should also not try to solve their problem without professional help. The following is a hit list of examples where a contractor should have hired a pro:

Insurance

Contractors have a tendency to buy insurance from a buddy or friend. In many cases, they just do not pay a lot of attention to the details. When it comes to business insurance, contractors need to look for a competent independent broker rather than a sales-oriented buddy who may be more of a consumer agent. Businesses require risk management expertise and insurance can be quite complicated. Rather than shop for the lowest price or buy from a buddy, you should be hiring a knowledgeable person who will protect your business's interest. Insurance is one of those things you hope to never use and when there is a problem, it is too late to discover you are not adequately covered.

Workers Compensation

Workers compensation insurance is complicated and expensive. Each state has different rules, regulations and policies. When a problem arises, contractors should seek out the best and most competent insurance they can. Workers compensation is a situation where a good offense is better than the best defense. Insurance companies, state agencies, lawyers and other professionals can educate you on the rules and what is in your best interest. Hiring a lawyer to get you out of trouble in an "oh no" situation is always much more expensive than to obtain advice that is "what if" oriented.

Computers and Accounting

I could write an entire article on how to find an accountant. The size of your business may dictate who would do the best job. What I would like to focus on is the issue of setting up your accounting and dealing with accounting software.

Business accounting packages like QuickBooks can be easy to use day-to-day, but setting the system up can be quite complicated. Try to find a qualified professional who can install your system and make sure the books are set up properly. You can generally find a certified person online or possibly your accountant can recommend someone. Most contractors are much better in the field than sitting behind a computer trying to figure out a software package.

Don't waste money doing something you are not good at and that you do not enjoy. I have no problem with your use of accounting software. You should be able to produce a monthly statement in-house. Just make sure it is all set up properly and have a professional monitor that.

Employee Handbooks

Labor law is a complicated subject and state statues can differ. Don't copy some other contractor's handbook and NEVER implement a detailed legal handbook without an attorney's review. It is one thing to break the law, another to break the law and put it in writing. The attorney will not be cheap-but he has some liability. I know a case where an attorney missed something in a handbook and when the company lost a wage and hour claim, the attorney's malpractice insurance had to pay a six-figure claim.

Contractors seem to confuse employee handbooks with management. Employees don't read handbooks and act accordingly; employees act the way employees act. Yes, the purpose of a handbook is to clarify company rules but another purpose is to serve as a legal document to help the company in dispute situations. I am always amazed at how much time and energy contractors put into procedure and employee manuals. Don't get me wrong, such manuals can be terrific but you have to be realistic about their use and in the case of a handbook, realize that it is a legal document.

Financial Planning

Don't confuse a stockbroker, insurance agent, or an accountant with a real financial planning expert. A good financial planner will look at your entire financial situation and offer advice. Understand how that financial planner is paid. I know a contractor who bought a building, has a good business and did all the right things. However, because of poor insurance coverage, he now may lose a lot of equity in the building due to a lawsuit. A good planner will load all your information into a software program, review your financial documents (like insurance and wills) and update the plan regularly.

Consultants

At the risk of sounding a little self-serving, I need to take a moment and talk about consultants. Good industry consultants have a following and are busy. Just like you, much of their work comes from referral and industry contacts. Don't buy consulting from a firm that blindly tele-markets or calls on you. If someone does solicit you, have a clear understanding of the payment terms and check other references. This does not mean a good consultant does not market. You may receive a mailer or hear the person speak at a convention. Be wary of consultants who offer a cheap initial review. A good consultant will be upfront with you and can provide references. Also, don't tell the consultant how to do his job, and pay some money up front so he doesn't have to worry about telling you the truth..

Ok, after all this is said and done, what are some other hiring tips?

Realize that even as a big contractor, you can still be a little fish in some ponds. Try to find a consultant appropriate for your size and who will deal with you one-on-one. When it comes to lawyers, accountants and advertising companies, you may want to avoid the big guys. Yes, they tell you they have all the people to service you, but make sure you are dealing with a company small enough that your business is still important to them.

Look hard to hire the right person and let him do his job. You hate it when people tell you how to do your job, well, so do consultants.

Understand that professionals also are specialists. If you were going to hire someone to build you a boat dock, you would not hire a general contractor who has never built one and does not have the know-how and equipment. The same goes for professionals. If you have a labor problem, find a labor lawyer. For an estate problem, seek out an estate lawyer. If you have a specialized problem, be careful of people who are not qualified.

Don't let the hourly fee bother you; focus on results. One attorney might be $300 an hour but knows what information you need. Another might be $150 an hour but researches for five hours and you end up spending more money.

In summary, professionals are not so much different that your own business. Find the right person and let that person do their job. Trying to do-it-yourself on projects that are outside your expertise will probably end up costing you a lot of money.

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Monroeporter
Monroe Porter is the president of PROOF Management Consultants. He can be reached at 804-267-1688.

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