fired a customer today...it was akward

[huggytree]

had a new customer who generals commercial jobs...i did 2 projects for him

payment on project 1 took 4 months
payment on project 2 is somewhat on time, but still late

always asking to do extra's for free
always asking for extra trips for free just to double check odd things

when his guys make mistakes and damage my work im told to move on and let it go

a general attitude of arrogance and being annoyed at my questions

when other trades are 3 weeks late on their task he needs me to accomplish my task within 1-2 days of being notified(which i always did for him)



called me today for a 3rd project for the same client who was the 4 month payer.i said NO THANKS...he ask why...i told him directly it was because of the late payment, but decided not to bring up the rest since he still owes me $4,000 (5 days late so far)



it didnt really feel good to say 'no thanks' like i thought it would....he's very aggressive and over all i just hate the guy as a person.

im somewhat slow and the market around here is extremely slow....i felt bad giving up a $30,000 project.....but this way my wife wont have to listen to me complain and i wont have to worry daily about getting paid $30,000

anyone else fire a customer lately?

i tried to expand my business from residential work into commercial.....that expansion ended today.....im happy doing residential only

[Steve B]

No, but I'm considering it. It's on a much smaller scale however. A guy called me to repair his fence. Luckily, his name rang a bell and I remembered that he accused us of cutting his irrigation system the last time we did a repair for him. It's possible that we did, but no way either of us could know for sure. Regardless, he sent me a letter from his company letterheard (he happens to be a lawyer) expecting that we would pay for it. I did. But, now I think I'm going to tell him we can't do the work unless he gets his irrigation company to mark where all of their pipes are and that he signs a waiver that we can't be responsible for unmarked lines and wire. It will cost him more to mark his system than it will to get the repair, so I'm sure he won't do it.

I think you did the right thing. Not so much because of the late payment, but because of your general feelings toward the guy.

[SteveM]

Firing customers is never fun or easy, but what "price" do you put on morals and sanity?

Steve B, I like the way you put the burden of insulation from damages back on the customer. For known pains-in-the-butt, that's a great technique to let them know you'd be happy to do the job for them, provided they save their B.S. damage claims for someone else!

[huggytree]

i have individual homeowners that i refuse to work for....one was mentally ill and another liked to get free info from me and admitted she had no money....i punch their names into my phone as 'bad'....so when it rings i can see not to answer

ive fired builders before, but ive always just avoided their calls and never returned their msg's.....its typically been for payment problems/ bad attitudes


Steve B,
your doing the right thing on the lawyer job....you need to cover all costs and cant keep repairing his sprinkler lines....you could have him sign a waiver that your not responsible for his sprinkler? but since he's a lawyer i wouldnt bother.....your method is correct

[tmerrill]

Do you guys use the 80/20 rule when you are thinking about firing a customer?

[huggytree]

if i fired every customer that was unorganized and difficult id have 1 or 2 contractors instead of 20 contractors...........they are all horribly unorganized

the one i fired was extra demanding though....

my customers all have 1 thing in common now...they all pay on time and they all win most of their jobs (not much wasted bid time)

by firing this customer i lost 10% of my income.....it looks like a new customer i picked up now will most likely exceed that though

[huggytree]

i went back the the jobsite today for a final task....the builder actually ran to my truck as i was leaving....he told me what a great job i did and that he would like to work with me further....he said he would continue to send me opportunities to bid and i could accept or decline them as i wish

it got me thinking that i may bid on his projects again....but this time add $1,000+ for his B.S.

his final payment is now due...we will see how quickly this one comes

here i thought the guy didnt like me and thats why he was being such a pri@k

[KristineS]

I think firing customers is necessary sometimes. In this case it may have made the guy look at how he was treating you and realize that you were more valuable to him than he had thought. It will be interesting to see if his behavior continues to be different. Sometimes simply standing up to the PITAs of the world makes them change their tune.

[huggytree]

i didnt stand up to him.....i just said 'no thanks' to his latest project

i cant stand up to him when he still owes me $4500

it did put him in a passive roll for the first time.....i felt in control........i view the prime contractors i work with as partners...ultimately they are in charge, but its more of a 51/49 relationship....were equal, but when it comes down to it they are really the final say when we dissagree

this contractor wants 80% control and doesnt want to listen to anything from me....

he schedules all the trades to work on the same project on the same day....when i told an electrician he couldnt put his wires in a wall yet i was yelled at by the builder...'you dont tell my subs what they can and cant do'.....concrete repair guys had to repair a floor in the next room and the only way in was through the studs in the wall with their wheel barrow's......if they had installed the wires the concrete guys would have to cut the wires to get in....i was right and the builder should have thanked me for thinking ahead....instead he yelled at me

my typical customer keeps using me BECAUSE i see these things ahead of time....im looking out for them.....

[KristineS]

Could be that say "no thanks" was standing up to him, in the sense that it let him know you didn't need him.

If he doesn't value the work you do or the fact that you're proactive and looking out for his interests then you are better off without him as a customer.

[BNB]

I'd take a late payment over no payment at all.

I don't think you did the right thing, personally. To me it's similar to when a customer calls and is rude to my customer service agents. The customer may be totally unreasonable, but it doesn't matter. My employees are very well trained to keep a good attitude, help them with their order, and do whatever it takes to get the job done and try and satisfy the customer. You have to see the bigger picture sometimes. Don't take things personal. Some people are difficult, some people aren't.

[huggytree]

all my customers pay within 30 days

120 days is unacceptable to me......i am not a bank and its not my job to finance a construction project....the customer needs to take out a loan and pay me promptly

ive only accepted ONE customer ever who paid late...they were always 60 days and were my main customer (20% of my sales)....i would typically be doing the finish plumbing and had not been paid for the rough yet....it bugged me every time.........they are no longer a customer of mine and i miss them sometimes, but then i remember always having to beg for my money at 60 days....id most likely take them back as a customer still....just because they did always pay at 60 and they brought me $50,000+ a year

you can build your business with crap customers or you can take the hard road and build it up with quality customers....long term i would rather have quality customers.....its how ive always done business and it works well...i have many customers that pay in 10 days

doing the job well is the most important thing.....getting paid on time is a close 2nd....

this time he paid in 120 days....what if next time i dont get paid??? thats where a customer like this is going

[DeniseTaylor]

Hey huggytree

Been there/done that. One of the top problems (IMO) with being self-employed is not getting paid when you're supposed to. Nothing is worse than giving something your best and not being compensated or having to chase it up or deal with being raked over the coals. The only other problem that's worse are employees who work to cause you problems. :(

$30K seems like a lot of money, but losing it will probably cause you to work harder at replacing it. Find another way to make the money. Go get another customer. Do what you have to do. But don't let the guy get you down.

[MyITGuy]

Out of curiosity, and something for you to think about:
1 - Do you charge/asses interest on unpaid invoices that go X days beyond their due date?
2 - Do your contracts allow for collection efforts to be initiated (And their associated costs to be assessed to your client)?
3 - Does your jurisdiction allow for liens to be placed on the property where the work takes place if the bill goes unpaid?

To answer your question - I'm on the brink of firing a client I contract for...but I'm waiting on a few things to fall in place first before I proceed...but in general it's not an action I'm taking due to late payments.

[huggytree]

1. i do have a interest charge in my contract, but ive never charged it...no customer would pay it....its there in case things go to court
2. they all pay when i threaten to go to homeowners or start liens....on residential the window for liens is shorter than commercial...so i typically collect all residential within 60 days because of it...
3. i always protect my lien rights....i never miss a deadline on any projects over $5,000.......most of my late payers end up being for a $350 job....i end up making 10 phone calls and stressing for weeks over $350(or less)....

ive already found a new customer who more than makes up for him...they fit nicely into my niche market for high end remodeling and could bring me $100,000 a year+

[Steve B]

1. I"m not sure why you don't think they would pay it. I charge a $5 late fee with the pet food business and people have paid it every single time.

2. Back to the customer I was going to put the burden on to mark his water pipes. I dragged my feet on returning his call for so long, that when I did I felt bad for leaving him hanging so I went out there intending to fix his wire - but only after I had him sign off on my disclaimer about underground wires and pipes. Before I could ask him to sign it - he asked me if I ever heard from his son who was wanting a dog fence. That disarmed me, so I didn't make him sign off (it's the kind of thing I always get signed before a full installation, but not for a minor repair). As it turned out, when I found the broken wire I also found two broken water pipes. I took a picture and had my employee witness that they were already broke. I made the homeonwer come look at them. It was a good thing because he didn't know they were broken. I never even used our shovel - although he may not have witnessed that fact. Anyway, his son called me the next day and I signed him up. It's a good thing I wasn't as "tough" as I was planning on being.

[huggytree]

as tough as i am on collections im afraid to charge 1.5% late fee per month....im not dealing with a normal homeowner type customer...im dealing with builders and remodelers...they are in a class all their own....i assume id piss them off adding $25 onto their bill and they wouldnt use me again

but like ive said before...i dont really have any customers who pay me late anymore....only the new ones that use me once and never again(some have gone under right afterwards....)

[BMonkey]

Yup, had to fire clients before and it's never fun as you might anticipate. However, when they do not pay, or abuse your staff, or take up ridiculous amounts of time requesting free services, it might be time to consider severing ties.

It's never easy to pass up on revenue, but you have to think about at what cost are you willing to keep a bad client. How much are you really making off of the client with unrealistic expectations of your services....

[huggytree]

he's now 30 days late on his last project (60 days since i finished my work)

this time its only $3,500...but its annoying to have to make the phone call 'when should i expect my payment?'

my work load has dropped off to 1/2 this month...i will have worked less than 80 hours in June.....but im still glad i turned down his $15k-20k project.....that statement may be stupid to some, but to me it makes sense.........his latest late payment just makes me double down on my decision

[Blessed]

he's now 30 days late on his last project (60 days since i finished my work)

this time its only $3,500...but its annoying to have to make the phone call 'when should i expect my payment?'

Why don't you just send a statement with the invoice and the late fee on it? That's what I do and it works. No phone call, just another emailed or snail-mailed invoice/statement. Once a client gets to 90 days I call - that rarely happens.

I do have a corporate client who always pays 60-90 days after the date on the invoice. I simply plan for that with that particular client, saves me the frustration! I asked my contact at the company about the late payments and he asked me to start dating my invoices to the start of the project instead of the end of the project - that way I get paid faster, even though I send the invoice at the same time I would otherwise. Projects typically take 30-45 days with them and now I receive my payment in a fairly timely manner!

One other random thought - Many, many years ago when I worked as a bookkeeper my boss was notorious for refusing to sign off on a bill until we received a statement with a late fee on it - that fee kinda kicked him in the rear to go ahead and pay the bill.

[huggytree]

i may test late fee's on new customers...i dont want to change my policy for existing ones