If so, are you owed money from previous jobs that you completed in good faith expecting to be paid at the end of the work, but are still waiting for part or all of the payment?
My Brother in law is builder and this was one of his biggest problems, I helped him implement a simple yet effective series of techniques to improve his cash flow, I have listed these below and tried to explain how to implement them into your customer facing routine.
We all know the building game has a bad reputation for cowboys and rip off merchants, so it is important to gain your potential customers confidence early on in the process. Simple things can help, be on time for meetings, don't give quick off the cuff prices out, and leave behind a professionally printed business card with your name contact number and ADDRESS on it.
For sizable jobs take time to cost them correctly be diligent and thorough, get it wrong here and that profit you deserve will be out of the window. Provide your prospective customer a typed breakdown of the work they have requested, clearly pointing out your understanding of the work you will undertake and with itemised costs associated to that work. You can use this as the order confirmation once you are given the go ahead, this quotation should be printed on a matching letterhead to your cards maintaining the continuity and professionalism of your image will pay dividends in the end.
As well as stating the work and cost clearly, here is where you must state the payment terms, you must also offer to provide references in this letter from previously satisfied customers. All of these things go a long way to creating a professional trustworthy image and as you are about to ask for money up front this is important.
Assess your potential clients ability to pay by asking questions, and if you have doubts load the terms in your favour, do not assume that if you are dealing with a professional business person that your money is cast iron, be fair and reasoned when it comes to payment terms but also be firm. I would suggest a three stage payment plan similar to this:
A third with the order, a third when significant materials are delivered to site, and a third when the job is complete, state this clearly on your quotation, print out two copies one for you and one for them, make a space for both you and your customer to sign it.
The acceptance signature from both of you offers a tangible agreement between both parties as to what was agreed at the outset of the project and therefore becomes a clear reference point in the event of a disagreement. People conveniently forget what was in the original quotation and what constitutes additional work so again it is a good reminder of what you agreed at the outset. Once work has begun and you are asked to do additional or extra work whilst make sure you write it down on your letterheads, cost it and have the customer sign it again, with a stated agreed payment method. This is so important to ensure there are no disagreements at the end of the project over what was included and what was not, I am sure you have all been in that position.
I know this all sounds very formal and you may believe that it is too much trouble, but my experience in business tells me that this is a sound series of methods developed over time and if followed will improve your customer payments and reduce disagreements related to those payments. Yes it does take a bit of effort on your part but it will become easier and just part of the way you do things once you get into a routine with it. I mentioned earlier about professional looking business cards and matching letterheads well here's a good site to buy them from www.betterprint.co.uk they have many professional designs linked to your industry and offer great prices, check them out.
If you use the techniques above you will improve your cash flow, let me know how you get on.
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