For the Homeowner,  hiring an unlicensed, (and often uninsured), contractor or "Handi-Man" is a gamble the Homeowner is willing to take in times of economic strife.

For the Licenced/Insured Contractor,  it usually means troubling slow times,  as the competition becomes tough. It's a terrible feeling to know that unqualified people are in the mix for work which you've spent years training and licensing for.

The solution is not an easy one, and I feel it must start with the Homeowner.   The Homeowner must be made to realize the potential hazards of a job which is poorly performed as it pertains to electricity.  The notion of "it's only two wires"  and "if it works, it's good"  must be corrected in the minds of the Homeowner,  but it must be done by an unbiased source.

Secondary to Homeowner education,  the Townships must not allow unqualified people to perform electrical work.  The county of Dutchess NY, has no Licensing requirement.  Although Dutchess County requires that people doing electrical work carry insurance and ultimately, get their work inspected by a qualified agency, the mere lack of licensing requirements makes the whole system much too easy to abuse.  There are too many homeowners and handimen doing electrical work which they don't have the skills to do,  and this work is rarely checked/corrected until is simply stops working, or until it burns..... needlessly  risking life and property.
          

Unfortunately, few clients ask about licensing and insurance.  However, I take the time to explain that both provide additional layers of protection for the client. The insurancee is self-explanatory. In Maryland, the Home Improvement Commission has a procedure in place for clients to complain and get restitution before having to go to court if they feel they have been wronged by a licensed contractor.

On the topic of "fly by night" operators.  I treat that slightly differently.  I tell my clients that while the uninsured, unlicensed contractor may charge a lower hourly rate, they aren't committed enough to their business to invest in it properly and thus aren't likely to be motivated to do a good job.  In addition, since they don't take their business seriously enough to be licensed or insured they may not intend to be around very long.  Not a good prospect if anything should go wrong down the road.  

Nick B. 
          

One thing I find that helps, prepare a presentation package to include a copy of insurance, your profile (samples of work included) and qualifications and even a few references and do not forget business cards! Keep these packets updated, clean and always available to hand out. Service Magic has project sheets available on the tools for contractors. Print and fill in the client area with lead information (when possible) before the appointment and include them as a worksheet when approaching clients. Keep a clipboard and a clean set of clothes within reach in your vehicle and carry the packet and clipboard with you. (clothes should not be over elaborate or too dressy)but clean clothing and organization skills do impress clients. It doesn't always sway the prospect, but if the "shade tree" contractor fails them, they will remember you. Always arrive on time and keep your vehicle clean and organized. 
          

jim, i fully agree!! there are tons of unlicensed/uninsured businesses here, and i know because we compete against them every day. whether they be a retired guy just looking for something to do or a drug addict (true story) just trying to get paid for a few days, we have to explain to potential clients the value of what we do and why we have been around for 15 years with the same phone number. its harder now than ever though on how to explain value, when the "chuck in the truck" with his home depot special products are so much lower than a legit business'. of course they are, he doesnt pay insurance!!!
          

My approach to dealing with unlicensed, uninsured contractors in our profession has been to go after the government agency that is supposed to be overseeing our operations.  I encourage every legitimate contractor to take the time, frustrating as it may be, to contact the governing agencies and your worthless congressmen and representatives and raise hell.  As a group we can accomplish things.  I also encourage customers who have had bad experiences to file complaints with these same agencies and representatives, often, doing the paperwork for them if they want help.  Citizens, voters need to take a stand and do more than just whine and complain among themselves.  Corrupt elected officials will never give up their power and money willingly.  We have to take it away from them that play the game so well, replace them with fresh, proactive minds, and insist on term limits.  Every government agency should be expected to prove its worth to the people it serves and be accountable for  its failures and have a plan for correcting what is not working.  Make a call or write a letter, today, demanding fair play for all.
          

As the secratary to my boss, I am the first line of communication with the customer. I have heard SO MANY times over the past few months that our prices are really high, and they are getting estimates for half of what we offer....Its so frustrating!
I let customers know how established we are, that we have several referrals available, and we are well known in the area!  I also let them know to be SURE the company/companies they are considering are licensed, bonded and insured....Sometimes, I go as far as letting the consumer know about issues in the industry, such as materials being stolen from other companies.  This has happened!!!  
The economy is so terrible these days, a girl has to pull a few tricks out of her sleeve to earn that job!!
          

Never stooping to the level of bad-mouthing our competitors, friendly customer service, and a professional attitude keep our heads above water.  Often, we are told that our bids are much higher than our competitor's, but more times than none, we are still the first choice.  In situations like that, the customer always refers to our professional facade and the friendly phone time that's spend discussing everything.

It really costs a lot more to know that you're completely legal, while crack-head Kenny down the way runs his business out of the back of his truck.  We keep the line of thinking that they may go with him now, but they'll be calling us in a few months when Kenny's no where to be found and the homeowner needs the job done right.  
          

 i road down a main street in my town and by the time i got four blocks i seen three different pickup trucks with covered beds with tailgates down packed with tools and supplies, i was amazed, no commercial plates,no business signs,no llc,no business accounts,no accountants,no health insurance,no insurance, get sued nothin to lose, what a life, anyone with a hammer and a station wagon can call himself a carpenter...ive been in business for 10yrs, have a high school diploma and i sell and sold to customers with job titles that take up a whole business card, live in houses that makes mine look like the garage, but listen to what they have to say, answer all the questions,be available when they call you if you can, give them what they want, go over the job when your done, and always remember, they have friends and relatives that are just as wealthy as they are  
          

So you're licensed and well insured been in busines for xx years, yet the so-called "fly by night" businesses are cutting into your bottom line. How sad for you. You were once So called "fly by night". I'm here. I'm not leaving. I solve problems for my clients, somtimes your price is a problem for them.
          

Its extremely tough out there. Now more than ever business is becoming watered-down due to those operating with no license and no insurance. People really don't care about quality, they just want to choose the option that is the least expensive. Our quality of products through the last I would say 20 years has really gone down. People just assume they will have to replace or buy something new ALWAYS, instead of having it last. Its definitely becoming tougher to compete and usually that means the good guys making less so those other non legal guys working out the back of their trunk making money and sending it to their country of origin. Those people who were stupid enough to accept work from those guys will get what's coming to them when the "company" that completed their work for them is no where to be found when something goes wrong. Honestly the government has to intervene somehow by cracking down on those who do operate without licenses and insurances
          

Small town legitimate contractors should go to a city coucil meeting and ask them to pass a city ordinance  that a contractor be required to show proof of insurances (work comp and product and completion liability) By doing so they could make money off of city licence and make sure that they have knowledge of wherer they are working and if any digging to be done close to under ground around utilities or building to close to some one elses proporty line. 
          

For the past couple years, probably 2% of all our residential customers inquire about insurances & obtaining the proper permits. The other 98% could care less.  Whether its service or new installations, its about who is the cheapest.  We can prove over and over again that the product is better, we are better - they do not care.  And they all want a price over the phone.  The fact that their system is over 20 years old and with all the new regulations, they don't want to take the time to have the job looked at properly, even though its a free estimate.  I have found that's how most of the referrals are from this site.  WHEN they actually answer the phone or return our calls/emails - its about if we can beat the price they were given from the previous 2 or 3 contractors that called them seconds before we did.  Yesterday, one referral said the previous company quoted her a price that was half the cost of ours.  I inquired about their experience, background, licenses, etc.  We talked for about 10 minutes.  She did not know a thing about this other company, except their price.  She admitted that she enjoyed our conversation and really liked my friendly personality and was comfortable with me.  Then said that she was still going with the other company, hoping that it works out well.  Because the money that she will be hopefully saving has to go into her gas tank.  And that was more important to her at this time.  It was shocking that I actually came in contact with a referral that we paid for, from servicemagic.  But at the same time, its refreshing that it was an honest customer who didn't blow me off.  And yes, the occasional homeowner ends up calling back down the road to say it did not work out with this cheaper company and now need a repair.  Of course, they are looking for the cheapest price on the repair.  Figures.  Thank goodness for word-of-mouth.  Majority of those customers have no issues with hiring us and understand what is involved in running a solid business.

Commercial work is easier to obtain than residential.  They know they need to hire a licensed professional to get it right the first time.

And as far as the city helping out with fly-by-night companies.  They used to be good about keeping an eye out.  Everyday, inspectors would drive up and down streets looking for marked/unmarked vehicles or signs that new work was performed and investigate.  Now, cities have down sized & laid off half their staff.  The full time inspectors are now part time - and only work 3 days a week.  And inspecting permitted jobs on those 3 days, leave them no time to drive & look around.  Now its up to us to keep an eye out.  
          

It is very frustrating bidding against illegals.  Not only do they not have insurance or else are using some legal friends insurance which is bogus, they also don't pay taxes.  I always tell my clients up front, I wont be the cheapest quoted but I want to have you as a lifelong customer.  I am not going anywhere.   You also have to remind them of the old saying,  "You get what you pay for."  That seems to get there attention as everyone has experienced the truth of that statement.
          

It is well said by many that have commented on this subject.  It is frustrating trying to compete with Joe Blow and his truck with tools/equipment because he has lower rates!  of course he does he has no insurance, no liability and can not be reached when his work is not completed or completed properly.  Often in my case I am contacted to repair/complete Joe Blows' work but because they have already paid him they want me for LESS THAN what they paid him!  It is like a no win situation in this particular area.  The homeowner in most cases do not want to pay much and yes I understand grudge spending but they want it manicured and professional but at the shade tree fly by night guys prices.  Yes the crack head guy with the push mower and tools in his trunk with no intention of building a business and trying to upgrade but is there to make a few dollars and keep on moving.  He might show back up when he needs more money but he didn't do the job right the first time as is often the case.  How do you overcome these types?  Wanting prime rib and tuna fish in the can prices!  Aghhhh!
          

I started my business back in the early 90's and have seen it all. I have had people show up with just a hammer and look for a job. Some could not even read a tape, inches plus 3 little lines. They called themselves carpenters. It seems that the first requirement to be a contractor is not to speak English. We have maintained all licensing and insurances and at time very difficult to do. We have had to re-invent our ways of doing business several times to adapt to these changes but have never let go of or compromised our values or integrity. We lose a lot of work to the fly-by-nights but in time gain a lifelong customer after having to go in a repair or redo their work. Explaining to the customer about certifications and licensing & insurance is a big part of the sale. Our biggest selling point is value. Lots of photos, references and testimonials with the emphasis on value. What will they get for their money. Spending the little extra time with them gives them a level of trust and makes for lasting relationships. Our retention of repeat customers is 100% and they actually don't trust anyone else in their homes. It is a crying shame that their are so many out their that just don't care and just want to get paid. We all want to get paid for our work, but it is nice to know that the same person wants to pay again and again. Setting yourself apart from the rest is what makes the difference. I generate all my estimates on a computer, preformatted for such purposes and present a packet to the homeowner with all the necessary information included. (Professional) No handwritten estimates. One last comment is posture, get to know your prospective customer, listen to what they want and need and help to guide them. If you can't answer a question or are unfamiliar with a product than don't answer simply let them know the truth and say good question but I am not totally familiar with that but will do some research. If they have done it than let the educate you. People have a natural tendency to brag about their knowledge. Assure them you have the skills to do the job but let them talk. I personally close about 99% of my sales with this approach and do not worry about the fly-by-nights as they will be gone tomorrow and you will have a customer as long as you have communication and trust. The other 1% are just kicking tires but eventually become clients at some point. Hang in and stay legal and committed and we will persevere. A fellow contractor
          

This is a problem we all face every day and in these tough economic time it seems more prevalent. I like the approach of educating the client, one of the things I usually tell them is, "Quality is like buying Oats, if you want good clean oats that come at a fair price, however if you are prepared to settle for Oats that has passed through the Horse then that come for a lot less"
          

It is important to focus in one claim at the time to build net work of loyalty, It is hard in our market with all the gost companies,We build Our business Name 14 years ago, focus in quality of service management  build and design 10/09/2010 
          

I feel as a pro contractor it is all of our duety to fiercly inform and inforce with our clients about these so called fly by nighters thay are making it hard for skilled tradesmen to nail down work and have a trusting relationship with our clients because of thier shoty craftmenship and take the mony and run attiude. My point is we as pros have to work together and keep our clients well informd about these hacks. do what i do tell the to watch homes on home and they will see what im talking about
          

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