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Cost-Plus, Cost+, Time and Materials, T & M

By Michael Stone

A coaching client was working with a potential customer who wanted a remodeling job on a cost-plus basis instead of a fixed fee contract.


Contracts, Change Work Orders, Punch Lists and More

By Michael Stone

A selection of issues that should be written into every contract to protect your profitability.


Mediation or Arbitration?

By Michael Stone

Your contract should call for arbitration, not mediation, to settle disputes.


Time and Material Woes

By Michael Stone

Time and Material contracts are full of risk, especially on larger jobs.


Provide a Service, Make a Profit

By Michael Stone

A 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.


Things That Cause Problems, or, How to Upset Your Clients

By Michael Stone

Seven issues that upset clients. And when clients are upset, either you won’t make the sale or you might not get paid.


Clients Changing the Contract

By Michael Stone

I’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.


Why Do You Need a Written Construction Contract?

By Michael Stone

Almost all conflicts contractors face could be avoided or quickly resolved if there is a clear, detailed construction contract between the parties.


Business Education and Construction – Willing to Learn

By Michael Stone

At a recent class, I was covering the basics of getting paid for additional work orders. I gave an example to emphasize the necessity of getting paid for your work.


Surprises Aren’t

By Michael Stone

Estimate your jobs properly so surprises don’t happen.


Cancelled Design Agreements

By Michael Stone

A call came in from a friend recently. It seems that a client of his wants to cancel a signed design agreement.


Rapidly Increasing Material Costs

By Michael Stone

Quoting a firm fixed price is riskier when material costs are increasing rapidly, which is why your contract needs to address unexpected material cost increases.


Why You Need a Well-Written Contract

By Michael Stone

A client decided to change the rules of their contract. She decided not to pay the full amount or on time as the contract specified.


Money Changing Hands

By Michael Stone

It'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.


Let Them Know What to Expect

By Michael Stone

If you’re doing service work, make sure your client knows what to expect before you start.


Price Proposal Deadlines

By Michael Stone

All price proposals need a deadline because you never know when material and labor costs will increase rapidly.


Downpayment on a construction job

By Michael Stone

Got 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.


Progress Payments: Keeping a Positive Cash Flow

By Michael Stone

We used to get three payments on jobs. 1/3, 1/3, 1/3. That’s not a smart business practice.


Cost-Plus with a “Not to Exceed”

By Michael Stone

A contractor asked for my opinion on a request he recently received. It’s not a win-win proposition.


Contracts Matter; Collecting Final Payment

By Michael Stone

When you provide a dishonest client a cost breakdown of their job, things can go wrong.


Sending Invoices for Construction or Handyman Work

By Michael Stone

Invoicing 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.


Final Payments, Emailed Quotes

By Michael Stone

Never 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.


Collecting Payment from a Dishonest Homeowner – Updated

By Michael Stone

Not all of your clients are honest. There are even a few who have no intention of paying you for the work you do.


Liquidated Damages in Construction

By Michael Stone

When customers start talking about liquidated damages in construction, it’s time to ask why.


Use the Right Payment Schedule

By Michael Stone

If you want positive cash flow in your construction business, make sure you're using the right payment schedule on your contracts.


Business Protection for Contractors

By Michael Stone

The 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.


Dishonest Clients

By Michael Stone

We 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.


Doing Things Wrong

By Michael Stone

It’s painful to see people who don’t know better get taken advantage of by those who do or should know better.


Cost-Plus – A Homeowner’s View

By Michael Stone

A 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%.


Contract Language for Client-Caused Damage

By Michael Stone

What do you do when a client calls about a problem they created? Preventative measures make the difference between a profitable job and losses.


Pricing Handyman and Service Work

By Michael Stone

There are two schools of thought on pricing handyman projects and service work: T&M or flat rate pricing. They both have advantages and disadvantages.


Residential Construction Quality Standards

By Michael Stone

In 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.


Payment Schedules for Cash Flow

By Michael Stone

A 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.


A Few More Contract Issues

By Michael Stone

Retainage clauses, removing the finance charge clause on the last payment, “we’ll pay you when we get paid”.  


Dodging Payment

By Michael Stone

There are things you can and should do when a client tries to dodge making payments.


In Construction, Communicate the Details

By Michael Stone

Are you giving your clients the information they need to be confident you’re building the job they want?


Contract Cancellations

By Michael Stone

Cancellations happen, even with the best of salespeople. Clients have all kinds of reasons to cancel an agreement, and you need to be prepared.


Dishonest Clients; Collecting the Final Payment

By Michael Stone

How do you deal with a dishonest client? I recently corresponded with a contractor concerning this issue.


Protecting Design Work

By Michael Stone

A contractor who has designed projects asked how to protect his design work.


Changing the Terms of the Contract

By Michael Stone

Why do clients enter a contract and then think they can unilaterally change the terms?


Making Selections for Their Project

By Michael Stone

If you're a remodeling or new home contractor, how can you get clients to make their selections before you write the contract?  Make it easy for your client.


Itemization Woes

By Michael Stone

We’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.


Protect Your Business – Get Paid

By Michael Stone

Avoid losing money by recognizing some of the games that building owners play to avoid paying.


Renegotiating the Price

By Michael Stone

How should you respond when a client wants to change the price AFTER the job has started?


A Poorly Written Contract Will Cost You Money

By Michael Stone

Too many contractors use a poorly-written construction contract, or no contract at all, leading to different interpretations of an issue.


Documenting Jobs

By Michael Stone

There 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.


Handyman vs Service Agreement

By Michael Stone

Is it a good idea to have a service agreement to cover small jobs under a certain amount?


Don’t Negotiate Your Price

By Michael Stone

Don’t let your clients dictate or negotiate the price of your work.


Cost-Plus Contracts

By Michael Stone

Why cost plus and time & material contracts should be avoided, for both contractors and building owners.


We Want To See Your Receipts

By Michael Stone

What 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.


Maintaining Your Right to Lien

By Michael Stone

At least once a week I hear from someone who can’t get paid for work they’ve done.


Contract Language That Puts You at Risk

By Michael Stone

Over the years, I’ve seen contract language evolve, shifting more and more responsibility to general and specialty contractors.


Guidelines for Success

By Michael Stone

Guidelines to a more successful construction-related business.


Contracts – Dates, Times, Conferences

By Michael Stone

Many construction-related disputes can be avoided with a well written contract. Here are a few of the things that need to be included.


Clients Wanting Cost-Plus

By Michael Stone

Many 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.


Final Payments and Guarantees

By Michael Stone

When clients try to change the terms of the contract, you don’t have to go along.


There is No Industry Standard

By Michael Stone

Don’t take any job where the client tells you how much you can charge for your work.


Contract Commitment Language

By Michael Stone

Commitment language in your contracts, payment schedules that help cash flow, right of rescission language. With a few extra comments.


Construction Allowances: What They Are, How to Use Them

By Michael Stone

A construction allowance is a dollar amount included in the contract for a particular item. There are two types of construction allowances: material and installed.


Protecting Yourself from the Protector

By Michael Stone

I’m not a fan of working with government agencies, but some situations are unique.


Do Construction Jobs Have a Life Expectancy?

By Michael Stone

Does a job have a “life expectancy”? I believe it does and you should be aware of the warning signs.


Contracts to Avoid

By Michael Stone

If 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.


Right of Rescission

By Michael Stone

When 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.


Protect Your Time

By Michael Stone

Some 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.


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