Contractors have a way of giving great deals to customers while they cheat themselves.

Among the many hassles of uprooting one's residence is the need to establish new business relationships with all the people you rely on to keep up the household. When we moved last fall, we regretted leaving behind the plumbing, electrical and automotive repair firms that had earned our confidence over the 16 years we lived in our old community. First, we had to pass through a period of trial and error dealing with businesses we learned the hard way never to patronize again. In our new community, we're back to that uncomfortable stage.

So it was with a sense of dread that I went searching for an electrical contractor last spring to install three ceiling fans and an upgraded light fixture we had purchased for the new condo we've called home since last October. Sorry, all you folks who pay thousands of dollars a month for advertising, but I don't play Yellow Pages roulette. That's the last place I would go shopping for a home service firm. There's no way to separate the wheat from the chaff. Instead, I asked a plumbing contractor friend for a recommendation.

As I've indicated in previous articles, referrals are the only way I do business with home repair firms anymore. Because of my work, I feel fortunate in having a lot of friends in various residential contracting businesses whom I can call on to recommend people in unrelated trades. I've never been steered wrong yet, although as we'll see in a moment, what's good for me does not always turn out to be in sync with this column's "Smart Business" title.

The Trade Mentality

My friend's favorite electrical contractor almost lost my business before it began by taking way too long to return my phone call. Finally, after days of dangling, we connected just hours before I was about to renew my search.

We arranged the work for last May 21, and I was quite pleased with the performance. The electrician turned out to be the owner's son, a personable and mature young man. He showed up on time, worked efficiently, cleaned up after the job, and everything he installed works just dandy. When he was done, I asked him if I could pay with a credit card, and he politely informed me I'd receive a bill in the mail.

It wasn't until June 30 when I finally received an invoice for his services. It was dated June 28, more than five weeks after the work had been done. I had no complaint about the amount of the bill. In fact, I expected to be charged about 50 percent more. (I never inquired about the electrician's rates when I hired him. A friend's recommendation was my guarantee of trustworthiness, as far as I was concerned. If he charged more than most other electrical contractors, that would have been okay with me, as long as the work and service were exceptional as well. If I felt I was being gouged with stratospheric pricing, I might've raised a stink, but that's never happened with anyone recommended to me by someone I know and trust.)

As a homeowner, I got a great deal. Top-notch performance at a price far below what I expected to pay. Yet, as one whose livelihood makes me a soulmate of trade professionals, it's disheartening to experience yet another example of the self-defeating trade mentality.

Here's a contractor who leaves a satisfied customer in his wake, but takes more than five weeks to send a bill for his services, which he undersells by about half. He shuns credit cards no doubt because it galls him to pay the 2-3 percent vigorish, yet fails to realize he's debiting his cash flow by about the same amount through lackadaisical billing along with added paperwork and postage. The invoice doesn't state any due date, and I bet if I were so inclined I could go months without paying before anyone bothered to follow up. (Showing more respect for his business than the contractor himself, I paid the bill a couple of days after receiving it.)

The construction and home repair trades are filled with hard-working, well-meaning, highly skilled contractors and workers who, unfortunately, don't have a clue about how to run a business. We hear a lot about home repair rip-offs, but even more prevalent are contractors so eager to please their customers, they end up cheating themselves. I suspect the electrical contractor who did my work is so used to getting beat up on pricing, he automatically goes low even when he doesn't have to. When it's all added up, I bet the total dollars left on the table by construction companies far surpass the amount gouged out of hapless consumers.

Regular readers of this column probably are familiar with the mantra I regularly sound against job bidding. Contractors who rely on competitive bids for all of their work will have a devil of a time getting the prices and profits needed to earn a decent living for themselves and their employees. The bid marketplace is simply too ruthless to allow it, especially with reverse auctions gaining in popularity.

Telephone Allergy

Shortly after the job described here, my daughter needed some electrical work in her house in an adjacent town. I referred her to the same electrical contractor. She made two phone calls that were never returned, and ended up hiring someone else. Hers is business lost forever. Nor will she ever recommend this firm to anyone else.

Sheesh. What is it that makes so many contractors allergic to telephones? People complain about this more than anything else when it comes to dealing with home repair firms. I understand that one can't expect immediate contact when dealing with small shops staffed by one or two people, but it's these small shops whose competitive edge is supposed to be friendly, personalized service. It's neither friendly nor personal to ignore phone calls or put off returning them for days.

The "too busy" excuse doesn't cut it. There's dead time between jobs or after working hours to get back to people who are interested in spending their hard-earned money with you.

Even if you have more work than you can handle, it's discourteous and shortsighted to ignore people trying to do business with you. The caller could be an influential VIP, or someone with the most lucrative job of a lifetime.

Opportunity always takes a back seat to those too busy chasing their tails.