Stupid Trust COSTS BIG $'s

Paul,

I've been reading your posts here and no offense intended, but it sounds like you're just being too much of a nice guy with this distributor. I'm glad it worked out well, but you should have slammed that guy when he first gave you the price. Regardless of whether he reads this site or not, let him hear from you directly. That thing about nice guys finishing last is especially true in business. I understand you respect this guy, but by trying to gouge you with that price he's got little respect for you. I like dealing with the suppliers and distributors we have here locally, but the reason I like them is because I know they give me a great deal. They also know that I know what a good deal should be because I price out everything. If their price is high, I tell them and they adjust it because they value our business.

Personally if this happened to me, I would just confront him and say "I think you tried to screw me and I'm not happy about it, how are you planning on fixing this so I do business with you again?"

In the future, the first thing out of your mouth should be "How much?" This will resolve any future problems like this from happening.
 
Time for a Devil's Advocate.....

Paul, Lance (i believe that is PressureClean's name) is correct about pricing beforehand. The moral of the story is to always price before buying. But look at it this way:

You value your time at $50 an hour. You bid a job, the homeowner tells you to do it, you buy the materials, and before you start the job they call you and tell you they want to back out, your price was too high. Another contractor, who works for $15 an hour, bid the job 50% less the day before you start.

This guy's hose price was too high. But that is how much money he wanted to make. It is your decision whether or not you allow him to make a lot of money. Maybe his support and service is worth the extra expense of his products.

My point is, you obviously told him you'd buy the hose from him. I probably would have backed out also, but remember this situation because it is going to get reversed on you several times, that i can gurrantee you. It's a lot less fun when you have people backing out on you, especially when you have already bought material and scheduled the work.

Regards,

jon fife
 
Jon,

Do customers back out on you often? We've never had a customer back out of a deal that they didn't get penalized for doing so. When we accept a job, our customer signs a contract with us that specifically includes a 25% cancellation penalty clause. When we schedule the job we've already picked-up a 25% or 50% deposit on the job. So if they decide to cancel they've already lost their 25%. We simply explain that we've allocated time and materials to that job and if they want to back out of an obligation they made then they are going to be penalized for doing so. We've never had a problem with scheduling since we added that clause.

It always surprises me when I hear about guys in our business not getting a deposit when they setup a job. Every contractor out there gets some kind of deposit to cover materials for the job, usually it's at least 1/3. The 25% cancellation clause is another thing people tell me they don't do. They say customers give them a "hard time" about it. That's hogwash. As you stated Jon, your time is worth XX dollars an hour, why would you let a customer control ANY aspect of how you earn YOUR income? You get all kinds of customers, but none of them are experts in YOUR business. So by letting Suzie homemaker think she's being smart by calling other companies AFTER she agrees to hire you, you've actually given her the ability to run how you schedule jobs and ultimately how you run your business. Every company out there has penalty clauses for customers changing their mind about something, you should do the same.

I'm not trying to single you out here Jon, I just get annoyed when I see power washers letting their customers take advantage of them. Too many guys in our industry run their businesses like it's a hobby or something, they need to start thinking like big businesses or they will never get there.
 
Hi Lance,

Great post, i was trying to provide an alternative viewpoint, one that i feel is worth considering in this current situation. No, I have not had a customer back out on me in years. I had one last year, but i was an extinuating circumstance and i allowed her to cancel without penalty.

But when i started out (like Paul is) I did not have the money to have a contract drafted professionally that would gurrantee me money and cover these type of problems. I do get money up front, but i dont charge a cancellation fee. I would if it were a large job out of town, but not for a deck or fence (bulk of my business). Again, my point was merely coming from the standpoint of the devil's advocate, and i think it is something worth considering.

jon
 
INSURANCE

Did anyone get that number for the insurance comp. with the rates for $800.00 a year. Im looking for insurance for my business and getting qotes over $2000.00 can someone help me find something cheaper? Thanks Mark W.
 
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