Just stop doing this!!
Are You Accidentally Moonlighting as a Bank? Stop It Right Now!
Hey there, fellow construction business owners! It's your mate Robin here, and I've got a burning issue to chat about that's been driving me up the wall lately. Grab a cuppa and let's dive in, shall we?
You're Not a Bank, Mate!
First things first: You. Are. Not. A. Bank. Got that? Good. Now, let me tell you why this is so blooming important.I've been chatting with a few folks in the industry, and I keep hearing the same story. Contractors, especially you essential ones out there, are making a massive mistake that could sink your business faster than a lead balloon. What's this cardinal sin, you ask? Giving your clients payment plans when they can't afford variations or can't pay you on time.Listen up, because this is crucial: If your clients can't cough up the dough, they need to toddle off to a real bank and borrow the money. It's not your job to finance their project!
The Variation Trap
Now, let's talk about variations. Oh boy, where do I even start? If you're still accepting verbal instructions for variations, you need to have a serious word with yourself. There are people out there who will take the mickey out of you, and before you know it, you're out of pocket and out of luck.Here's the deal: Variations should be instructed in writing, full stop. No ifs, buts, or maybes. And here's another nugget of wisdom for you – try to avoid variations altogether if you can. Everything's a negotiation, right? Wrong! You're in this game to make a profit, not to do anyone any favours.
Cash Flow is King
Let's get one thing straight: you want a positive cash flow. That means you're raking in the profits as you go along. So, make sure you're getting paid for variations as they happen, or even better, upfront. If someone wants you to order steel for them, get paid upfront for it. It's not just good business sense; it's only fair.
When to Walk Away
Now, here's where it gets tricky. If you've got a client who starts whinging about not being able to afford this or that, or they're trying to push you into a cash-negative situation, it might be time to consider walking away. I know it's tough, especially when you're just starting out and hungry for work. But trust me, it's not worth the headache.
The People-Pleaser Trap
I get it, I really do. When you're new to the game, you want to bend over backwards to keep everyone happy. But here's the thing: you're not in business to be a people-pleaser; you're in business to make a profit. If people want your services, they need to pay for them. End of story.
Lessons to Learn
So, what's the takeaway from all this? Here are the golden rules:
Get it in writing: Any variation, no matter how small, needs a written instruction before you start the work. No exceptions!
You're not a bank: Don't allow payment plans that put you in a negative cash flow situation. Your cash shouldn't be funding their job.
Know your worth: You're a business owner now, not just a carpenter or plumber. Act like it!
Wake-Up Call
Look, I know this might sound a bit harsh, but consider it a wake-up call. I've seen too many good people get burnt by these mistakes, and I don't want you to be next. You're in this to succeed, right?So, the next time a client tries to sweet-talk you into a dodgy payment plan or a verbal variation, just remember: You're a business owner, not a bank. Stick to your guns, get everything in writing, and keep that cash flow positive.Now, go out there and show 'em how it's done!
