We were out on a sales call, visiting a homeowner who wanted to build a new pondless water feature. After discussing her desires, we began to talk about access. While doing so, I noticed a large, black stain on her driveway. I asked her what had happened. She exhaled and went on to describe how she had hired a day laborer to clean up and paint the rod iron fence on her hillside. The gentleman doing the work slipped and tumbled down the hillside, falling off the 5-foot block wall and landing on her paved driveway, spilling a gallon of black paint. The worker suffered a broken leg and a concussion, along with lots of scrapes and bruises. Emergency services were called, and an ambulance came to take the worker to the hospital. The worker had a large medical bill, which the homeowner was responsible for. After this event, the homeowner said she would never hire an unlicensed, uninsured worker again, as that incident had cost her thousands of dollars and whole a lot of stress.
As a business owner and contractor in Southern California, I know firsthand that all the licenses and insurances that businesses and contractors must obtain are a pain in the butt and can get very expensive. So, why do we do it? Why do we bother to hire actual employees when we could just hire a day laborer to work for less than we would probably pay in workman’s compensation insurance for one employee? Why is it important for a contractor to have those licenses and insurances? And why is it important for the homeowner to pay a little extra in order to hire a contractor with these items? I find myself answering these questions quite often, and this is what I will discuss in this article.
Through hiring a professional, the homeowner can rest assured that warranty, damages and payments will be handled correctly, legally and professionally. As a legit company, it is important to make sure your vehicles and equipment are properly insured, maintained and in good working order. In California, we are required to have a state landscaping contractor’s license, carry general liability insurance and have workman’s compensation insurance, along with many individual local city business licenses.
Over the years that I have been designing, building and maintaining ponds and landscapes, I have visited hundreds of homes and met even more people, families and probably an equal number of our four-legged friends. Sometimes, we just talk about ponds and what needs to be done. We do the work, and off we go, never to talk to them again. But with most of our clients, we have built a longstanding relationship with them.
Many have seen me grow from a wild, 20-year-old kid to a husband, father and business owner. Some of these longtime clients even came to visit us in the hospital after my first daughter was born. With one of my first clients, I was able to see their 1-year old son — who would come out in his superhero underoos and rain boots to help me clean the pond (Sorry, Max!) — grow up, get his driver’s license, go off to college and prepare to graduate from a major university.
We take pride in our ability to maintain lasting relationships with our clients. I have always wanted to provide our clients with a sense of confidence that we are here to help. I always want the clients to know we have their best interests at heart, something you may not get with “some guy and a pickup.”
For the homeowner, they have trust that we, the contractor, care about the work we do and won’t rip them off. Having a “go-to” contractor makes life easier for the client, but as a contractor, it’s just as beneficial — if not more! It’s common knowledge that it costs about five times as much to attract a new customer than it does to keep an existing one. The first rule of any business is to retain clients and build a loyal relationship with them, thereby avoiding client acquisition costs. If you’re not at least attempting to follow this rule, what does that say about your business?
As an example of the kind of feedback you should be looking for, here’s a testimonial from a recent customer: “Dominic did such an excellent job of really listening to what we wanted and what we needed logistically. Somehow he took all of the guidelines that we conveyed to him and was able to make those come to life in a way that we could never have imagined. He really listened and then was able to put his own creative spin on that in a way that accomplished all of our logistical needs as well. The wonderful part is that he created the whole pond system, and his company is doing all the weekly maintenance. So, they know the system intimately, and it is stress-free for us!”
A Red Flag
Not caring about building a lasting relationship should be a red flag. Why wouldn’t a contractor want to build a relationship with their client? Are they just making as much money as they can before they slip out of town? Are they using cheap products that will only last a few years before falling apart and failing? A reputable company cares about their reputation and image and therefore would do everything in their power to maintain that image and keep their clients happy.
A contractor who cares about their work will ensure that the homeowner feels comfortable with the new edition to their house or water feature. Go over warranty, operating procedures and maintenance, and make sure you give them copies of warranty paperwork to leave the client without worry.
Did you know that in California, if a homeowner hires an unlicensed, uninsured contractor, there is little to no way for them to cover themselves if the contractor skips out on the job (i.e., takes your money and runs) or gets hurt?
When a contractor has adequate liability insurance, the client does not have to worry about covering the costs that might result from such an accident. However, if this contractor does not have coverage and gets hurt on the job, the homeowner could be financially responsible to cover the damages, which might include hospital bills, rehabilitation costs, lost wages, loss of earning capacity, home care and pain and suffering — on an indefinite basis.
A homeowner may think hiring an unlicensed professional just one time isn’t a big risk. However, according to the Occupational Safety and Health Administration (OSHA), one in 10 construction workers is injured every year. One in 10 may not seem like a lot, but imagine you’re sitting at a casino table with a pocket full of chips, with 1:10 odds that you’ll walk away with thousands of dollars. You may consider the odds in your favor. But, flip it around to 1:10 odds that your “day-laborer” is going to get hurt and cost you thousands of dollars — is that a gamble you’re willing to make?
Don’t Risk it
So, is it worth hiring an unlicensed or uninsured contractor to save a couple bucks today? Homeowners, remember to ask for proof of licenses and insurance. And contractors, make sure you are insured and carry all the proper licenses required for your area. If you’re a contractor who hires uninsured day laborers, you should realize that this reflects poorly on your business. In this day and age, there’s little possibility that any sort of incident would not be displayed publicly on social media or local neighborhood pages.
Hiring someone who is not part of a legit company means there is a greater risk that the homeowner, client or general contractor can be taken advantage of, often due to not having a legal contract in place to help outline the scope of work, payment schedules and legal responsibilities.
Hiring a “local guy” probably means that they are not paying the proper taxes and insurances, and therefore may be hiring anybody they can find to work for them. It also means you’re letting random, possibly non-vetted people into your home or yards to perform work while you may not be at home.
Are you a quality builder who wants to make the best product possible? When building a pond or landscape, we should never cut corners or take the cheap way out, as it only hurts the industry as a whole.
Hiring a legit employee means the person you are hiring is legal to work in the United States and pays taxes. The company then pays its fair share of local taxes for improvements to roads, schools and parks. Going by the books essentially helps to build the local economy.
If you are looking to hire a legitimate contractor, make sure you ask for proof of general liability and workman’s compensation insurance. Make sure they are licensed to work in the area and have local reference projects to share with you. Always get a clear idea about the contractor’s warranty.