Trust

Posted: November 5, 2014 in Business, Helpful Hints

“If people like you, they will listen to you. But if they trust you, they’ll do business with you.” – Zig Ziglar

Business has and always will be based on trust. At the core, business is people transacting and working together who want to be able to trust each other. Lacking trust, relationships fail. There is an intrinsic part of us put there by the Creator that wants and needs relationships so even in business we find ourselves relating to the people and therefore trust is at the core.

With that being said, it is crucial that in construction and contracting there be a high level of trust in order to be successful. And even with two people of integrity who trust each other it’s important to have a written understanding of the relationship and especially the expectations of each other. But you should know that you can’t write enough terms into a contract to replace having a clear understanding and trusting each other. The world of commercial contracting is full of suspicious characters who don’t trust each other and often for good reason. Their contracts form the basis for dispute and not for relationship so all too often the contract ends up in the legal system. If you are going to do business in these circles just make sure you have your legal team warmed up.

The point to this message is that building trust and then entering into an agreement based on trust is important for both the owner and the contractor. This is based on the simple principle that it’s better to work things out than to take the matter to the legal system. You need to start out based on trust so when (and if) the situation gets tense you can both proceed with confidence that in the end you can work things out. If you are not already aware of it, when a matter goes to court the lawyers always win. Other than that, there are no guaranteed winners. So, you are better off finding a solution even if it doesn’t feel good at the moment rather than lawyering up and seeing how much that costs you. If you have a contract based on trust, the terms of the contract become the less crucial to actually finding a solution.

How do I find someone I can trust? First of all, realize that there are two parties and there is as much reason to distrust an owner as there is to distrust a contractor. There are plenty of horror stories on both sides. There are things that you can do to reinforce or build trust in a person but just know that in order for an owner or a contractor to let their guard down and replace it with trust they have to know that when it comes down to it and things go sideways the other party will act with the same consideration and openness that they did when the arrangement started. That is where personal character and integrity become the measurement of whether someone can be trusted or not which is the second point here. The problem is these qualities are not measured. There is no visible scale that shows how trustworthy someone is. You can’t find a source for character ratings on Angie’s list or anywhere on line. And contractors have an even tougher time trying to find out if the owner is trustworthy because they don’t have even an Angie’s list for owners.

There are some sources for information out there that can be helpful. Online sources like Angie’s list can be a good tool but just because a contractor isn’t listed doesn’t mean the contractor isn’t trustworthy and a good choice. And even if you check with all the sources and do a thorough check of a contractor doesn’t mean he’ll work out. But here are some things to consider when looking at an owner or a contractor.

Quality Owners Contractors
Business practices Most owners have a core business. You may be able to ask questions of employees and vendors to find out how the owner conducts his/her business. You can check with the Better Business Bureau (http://www.bbb.org/) to see if any complaints have been filed. Contractors use subcontractors and vendors. Get a list of a few key subs and vendors and ask them for confidential information about how the contractor conducts his/her business. You can check also with the Better Business Bureau (http://www.bbb.org/) to see if any complaints have been filed.
Bank accounts Owners are reluctant to give out banking information. But you can check with Dunn and Bradstreet (http://www.dnb.com/) and get financial information. Contractors should supply you with their financial information so you can check on them. Also, use Dunn and Bradstreet (http://www.dnb.com/) for credit and financial information.
Legal claims Sometimes a simple question like “have you ever been sued before or sued someone else” can give you good information about the owner. Just because they have been to court doesn’t mean they’re a terrible person so try to understand the circumstances before forming an opinion. Contractors have to be licensed so check with the state licensing board (in California http://www.cslb.ca.gov/). You can not only find out the status of their license but also if they have ever had complaint made against their license. However, this does not tell you if the contractor has been sued or not. Just ask him/her directly.
Recent experience If the owner has been involved in construction before, ask for the contact information of the contractor(s) and interview the person(s). A good practice is to ask for the owner’s contact information for the last 5 jobs the contractor did. Chances are that one of them was not a success for some reason. Take the time to interview the owners and get a sense of how the contractor handled problems. Even if they had a bad job as long as they took care of business they may be a good choice for a contractor
References References for an owner may or may not be useful. They usually pertain to the owner’s core business which you may not be familiar with. Concentrate on interviewing some key people connected to the company. References are usually people the contractor has had success with or they are friends. Concentrate on the list of past projects including ones where the contractor didn’t shine and those owners will hopefully tell you a lot about the contractor.

When it’s all said and done, sitting down together and communicating is a big part of building trust. Most people have the same interests as you. They want to be successful, they want to do their business honestly and they want other people to respect and appreciate them. Linking up on those points reinforces trustworthiness to each other. I find that by telling a story of a bad or a good experience I communicate an example of how business should not or should be done. If that rings true for the other party then I know we see eye to eye on how to do business and we build our trust based on that. Understand that these are matters of relationship based on trust and not performance. Establishing your choice of whether to take a job or to award a contractor has many other facets to it. But whatever the other things are that weight your decision you have to be able to trust that person at the core. If there is not trust, then you are probably better off moving on.

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