Renegotiating the Price
By Michael StoneHow should you respond when a client wants to change the price AFTER the job has started?
Changing the Terms of the Contract
By Michael StoneWhy do clients enter a contract and then think they can unilaterally change the terms?
In Construction, Communicate the Details
By Michael StoneAre you giving your clients the information they need to be confident you’re building the job they want?
Residential Construction Quality Standards
By Michael StoneIn residential construction, it’s not unusual for your client to have an unrealistic quality standard. That’s why you need to establish the standard ahead of time.
Liquidated Damages in Construction
By Michael StoneWhen customers start talking about liquidated damages in construction, it’s time to ask why.
Contracts Matter; Collecting Final Payment
By Michael StoneWhen you provide a dishonest client a cost breakdown of their job, things can go wrong.
Rapidly Increasing Material Costs
By Michael StoneQuoting a firm fixed price is riskier when material costs are increasing rapidly, which is why your contract needs to address unexpected material cost increases.
Wrapping Up a Difficult Project
By Michael StoneIt can a challenge to finish a project, especially when it was priced too low for a difficult client and with a weak contract.
Why Do You Need a Written Construction Contract?
By Michael StoneAlmost all conflicts contractors face could be avoided or quickly resolved if there is a clear, detailed construction contract between the parties.
The Skinny on Change Work Orders
By Michael StoneA compendium on change work orders on a new home, remodeling or renovation project; why they matter, how to price them, what to include, and more.
Cost-Plus Contracts
By Michael StoneWhy cost plus and time & material contracts should be avoided, for both contractors and building owners.
Unclear Change Work Orders
By Michael StonePricing changes for a change work order isn’t easy when the scope of work isn’t clear.
Time and Material Woes
By Michael StoneTime and Material contracts are full of risk, especially on larger jobs.
Business or Charity?
By Michael StoneIf you’re a business owner and take on a project out of the goodness of your heart, recognize you might not get paid and will be funding the project.
Payment Methods
By Michael StoneI don’t think writing a check is old fashioned, but there are so many advantages to using a credit or debit card that it’s become the preferred payment method for many.
Protect Your Time
By Michael StoneSome people are used to snapping their fingers and having others jump. It’s irritating, but you have to remember that they’re writing the checks.
Clear Sales Communication; It’s Your Responsibility
By Michael StoneI want to share a recent phone conversation with a contractor concerning a problem they were having with a client.
Protecting Yourself from the Protector
By Michael StoneI’m not a fan of working with government agencies, but some situations are unique.
Final Payments and Guarantees
By Michael StoneWhen clients try to change the terms of the contract, you don’t have to go along.
Contract Language That Puts You at Risk
By Michael StoneOver the years, I’ve seen contract language evolve, shifting more and more responsibility to general and specialty contractors.
Handyman vs Service Agreement
By Michael StoneIs it a good idea to have a service agreement to cover small jobs under a certain amount?
Protect Your Business – Get Paid
By Michael StoneAvoid losing money by recognizing some of the games that building owners play to avoid paying.
Protect Your Business – Change Work Orders
By Michael StoneMichael discusses a ploy some building owners use to not pay for all of their change work orders. It happens in both residential and commercial projects.
Overhead and Profit on Change Orders
By Michael StoneYou shouldn’t sign a contract that stipulates what you can charge, even if it’s just on the change orders.
Protecting Design Work
By Michael StoneA contractor who has designed projects asked how to protect his design work.
Dodging Payment
By Michael StoneThere are things you can and should do when a client tries to dodge making payments.
Pricing Handyman and Service Work
By Michael StoneThere are two schools of thought on pricing handyman projects and service work: T&M or flat rate pricing. They both have advantages and disadvantages.
Dishonest Clients
By Michael StoneWe often hear from contractors dealing with a client who, for whatever reason, has decided to change the terms of their contract. Other professionals have the same problem.
Collecting Payment from a Dishonest Homeowner – Updated
By Michael StoneNot all of your clients are honest. There are even a few who have no intention of paying you for the work you do.
Cost-Plus with a “Not to Exceed”
By Michael StoneA contractor asked for my opinion on a request he recently received. It’s not a win-win proposition.
Let Them Know What to Expect
By Michael StoneIf you’re doing service work, make sure your client knows what to expect before you start.
Cancelled Design Agreements
By Michael StoneA call came in from a friend recently. It seems that a client of his wants to cancel a signed design agreement.
Clients Changing the Contract
By Michael StoneI’ve written before about clients who decide to make changes to a contract. Last week I heard from two different contractors who had to deal with this, and I want to share their stories.
Mediation or Arbitration?
By Michael StoneYour contract should call for arbitration, not mediation, to settle disputes.
Client Causing Job Delays
By Michael StoneIf you want to lose money on a job, agree to let your client do part of the job or provide their own materials without setting clear boundaries.
Right of Rescission
By Michael StoneWhen I’m working with a group of contractors, I often ask how many are providing a Right of Rescission form with their contracts. Many contractors aren’t even aware of the document or realize its importance.
Construction Allowances: What They Are, How to Use Them
By Michael StoneA construction allowance is a dollar amount included in the contract for a particular item. There are two types of construction allowances: material and installed.
Clients Wanting Cost-Plus
By Michael StoneMany building owners want a Cost-Plus contract because they believe they’ll have more control over the total cost of the project. It’s your job to educate them on the downside.
Maintaining Your Right to Lien
By Michael StoneAt least once a week I hear from someone who can’t get paid for work they’ve done.
Documenting Jobs
By Michael StoneThere are two benefits to documenting your jobs. One is protecting yourself in case there is a disagreement about the project. The other is providing information that will help you when you’re promoting your business.
Itemization Woes
By Michael StoneWe’d like to share an email received from an anonymous homeowner. If you believe that it’s smart to provide an itemized invoice, this will make you reconsider.
Payment Schedules on Small Jobs
By Michael StoneIt’s important to manage the payment schedule on your jobs, but not all jobs are the same.
Design Agreement Contract, Letter of Intent
By Michael StoneA design agreement allows you to get paid for your work. Don’t waste your effort or your time.
A Few More Contract Issues
By Michael StoneRetainage clauses, removing the finance charge clause on the last payment, “we’ll pay you when we get paid”.
Contract Language for Client-Caused Damage
By Michael StoneWhat do you do when a client calls about a problem they created? Preventative measures make the difference between a profitable job and losses.
Business Protection for Contractors
By Michael StoneThe popular belief is that contractors are the villains and homeowners are the victims. But if you’ve worked with the public for very long you know there are also dishonest clients.
Final Payments, Emailed Quotes
By Michael StoneNever let your final payment exceed 2% of the sales price. And your contract should include a finance charge clause for payments not made on time.
Progress Payments: Keeping a Positive Cash Flow
By Michael StoneWe used to get three payments on jobs. 1/3, 1/3, 1/3. That’s not a smart business practice.
Money Changing Hands
By Michael StoneIt's easy to ask someone to do something; it's harder to hand over money. Your client isn't committed until they've written the first check.
Getting Paid
By Michael StoneIf the payment schedule is adjusted after you’ve started a job and they aren’t willing to pay what’s owed, file liens. You must protect your right to be paid.
When Clients Do an End Run
By Michael StoneStay ahead of your clients. Write a detailed contract that protects you from as many unpleasant scenarios as possible, and work from written agreements with both your subcontractors and your employees.
Contracts, Change Work Orders, Punch Lists and More
By Michael StoneA selection of issues that should be written into every contract to protect your profitability.
Contracts to Avoid
By Michael StoneIf you are going to deviate from a standard fixed price contract, look at your approach from your client’s point of view. Make sure they know what to expect and what you’ll do.
Contract Commitment Language
By Michael StoneCommitment language in your contracts, payment schedules that help cash flow, right of rescission language. With a few extra comments.
Contracts – Dates, Times, Conferences
By Michael StoneMany construction-related disputes can be avoided with a well written contract. Here are a few of the things that need to be included.
We Want To See Your Receipts
By Michael StoneWhat if you agreed on a price, now customer wants all receipts for material? Without a clearly written fixed price contract, it's a problem waiting to happen.
A Poorly Written Contract Will Cost You Money
By Michael StoneToo many contractors use a poorly-written construction contract, or no contract at all, leading to different interpretations of an issue.
Specifics on Change Work Orders
By Michael StoneLast week we discussed having signed Change Work Orders (or Additional Work Orders). Today we’ll discuss 4 mistakes often made when writing Change Work Orders.
Contract Cancellations
By Michael StoneCancellations happen, even with the best of salespeople. Clients have all kinds of reasons to cancel an agreement, and you need to be prepared.
Payment Schedules for Cash Flow
By Michael StoneA good payment schedule keeps you paid for the work you are doing. If you're using a 1/3, 1/3 and 1/3 schedule, you are financing most of the job out of your pocket.
Cost-Plus – A Homeowner’s View
By Michael StoneA very nice gentleman called me last Friday. He related a story about his home remodeling project. It was done a Cost Plus job, the "plus" was negotiated at 18%.
Use the Right Payment Schedule
By Michael StoneIf you want positive cash flow in your construction business, make sure you're using the right payment schedule on your contracts.
Sending Invoices for Construction or Handyman Work
By Michael StoneInvoicing is one way clients delay paying. "Thanks for doing that work, send me an invoice, okay?" Why do contractors agree? Maybe they believe everyone does it.
Asking for a Lien Release Prior to Payment
By Michael StoneA specialty contractor said, "A general contractor called and asked me to send a lien release. If I do that, he will send a check for what he owes me."
Construction Insurance Repair Job That Could Have Gone Bad
By Michael StoneA friend was doing an insurance job, repairs to an exterior wall. The siding had been improperly installed, and around here, if you don't keep water out you'll see rot.
Do Construction Jobs Have a Life Expectancy?
By Michael StoneDoes a job have a “life expectancy”? I believe it does and you should be aware of the warning signs.
A Homeowner’s Point of View
By Michael StoneIn case you don’t think it’s important to have change work orders signed and paid BEFORE making a change, read this note I received from a homeowner yesterday:
Construction Coach Success Story
By Michael StoneA young couple came to us for coaching in February, just two months ago. While their P & L was not all that bad they could and wanted to do better.
Is It Gouging or a Fair Price?
By Michael StoneAn earlier post of ours is getting a few homeowners riled up. The post discusses homeowners who have contacted us, unhappy about the prices their contractor is charging.
Downpayment on a construction job
By Michael StoneGot a phone call recently from a contractor doing a job in the $150K range. Everything is fine, contract signed, and the job is going great.
Why You Need a Well-Written Contract
By Michael StoneA client decided to change the rules of their contract. She decided not to pay the full amount or on time as the contract specified.
Provide a Service, Make a Profit
By Michael StoneA young businessman called. He was in a state of shock after checking his books over the weekend and found over $11,000 in receivables, much of it over 30 days.
Cost-Plus, Cost+, Time and Materials, T & M
By Michael StoneA coaching client was working with a potential customer who wanted a remodeling job on a cost-plus basis instead of a fixed fee contract.