We received an interesting question from a contractor:
We have a customer (our local Commonwealth Attorney) who is asking us to do handyman type work for him on a consistent basis. We like to stay in his good graces, especially for referrals. It gets a bit tedious to prepare a contract each time. Is it ever a good idea to have a “service agreement” for the entire year, to review annually, that will cover small jobs under a certain amount? That way we could do his work and invoice him as needed? He is the only customer we have like this. Any thoughts are always appreciated.
There are a number of approaches that can be taken. I’ll offer one solution, but I’m open to suggestions.
I think using an annual service agreement may be a bit risky, especially when your client is an attorney. You never know what you’ll find in a home or building, and trying to use one broad document to cover whatever might happen makes me nervous. Even if you restrict it to small jobs under a certain dollar amount, that leaves you open to a discussion of how that amount is determined if it’s close, or whether you should break a large job into smaller jobs to stay within the agreement.
There’s a two-page handyman contract in Chapter 7 of Markup and Profit Revisited. It’s specific but simple. You can fill it out in the office and email it to the client, or carry a blank copy with spaces to fill in by hand at the jobsite. Either way will take less than five minutes, and the agreement addresses most if not all misunderstandings on a small job.
Like all paperwork, this agreement should be reviewed and updated if needed at least once a year. Those updates would be to add any details that make it stronger, based on the situations you encounter.
It’s understandable wanting to simplify the paperwork side of business. However, working in someone’s home or building is full of unknowns, and it’s wise and prudent to take the time to protect yourself with the correct agreement before you start any project.
The knowledge and experience Michael Stone gained in his 60+ years in construction has helped thousands of contractors improve their businesses and their lives. He is the author of the books Markup & Profit Revisited, Profitable Sales, and Estimating Construction Profitably, and is available for one-on-one consultations as needed.