# asking for more money



## joethepainter

All of it, from start to finish, as best as you can remember in the first post would have been great !


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## thom

First, you used the word "estimate". An estimate is just that, it is not a firm price and means little more than "I think it will cost you about.....". Estimates are what is used when jobs are time and material. The customer pays the actual costs (plus agreed markup) not a fixed price. 

Most of us use fixed price contracts. These are not estimates. For this to work the contract must be very clear what you are responsible for and how much and when you get paid. 

From reading your OP, neither of these apply. You seem to have no real agreement. 

It is quite unlikely you will work yourself out of this mess. Your best bet is to complete it and eat it if you are contractually required or else walk away. If the contract requires you to complete for a fixed amount and the HO provided some materials, it is your job to find the very cheapest materials that could have been used (like a $60 toilet) and make that adjustment. 

It would be insane to fix price a contract then allow the HO to buy whatever they want for installation and charge that amount against the contract. It would also be insane to allow the HO to just backcharge for unsupported theft and casualty losses. You should have put your foot down a long time ago. 

You screwed yourself already, looks as though you are asking to get screwed again. No, you won't get kissed.


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## elbud433

Starting with the signing of the contract. The homeowners sign a contract stating contractor will provide all materials and labor for the scope of work attached to this agreement. I began the project out of my own pocket providing materials and labor for the foundation and masonry work. After the foundation was complete. I received my first draw you according to the contract and the amount of 20 K. Then Framing began. Framing started and basically took about three weeks to get everything up. The trusses came two weeks late. So the roof was not on until five weeks after the foundation. The homeowner stated that she wanted to get into her house as fast as possible as they always do. She then stockpiled her house with materials such as toilets bathtubs showers Sanks flooring etc. Which one was breach of contract from buying the material. Number two it made it almost impossible to work inside the house. After she had purchased them I told her that many of those items were not according to the budget. I told her that if she wanted those items I would have to reassess The estimate. For instance the budget included linoleum flooring, and she showed up with ceramic tile. Cruciate and stated that she was going to withhold some of the next draw to compensate for what she had purchased. I told her that we could sit down and talk about it. And maybe we could come up with something. I explained to her that there was many price increases due to this and Then she began stating that we broke things in her house. And we unplugged her freezer which damaged all of her food. And damage the freezer. And that we owed her for that also. I Astor for receipts. And she said that she did not have any. She would try to get them. It is been two months since that and I have not seen any receipts. Although I ask for them. She withheld approximately $10,000 from the draws stating that it was due to things that were broken in her house. And the material she bought. She then moved back into her house was unfinished with her family. Which made it extremely difficult workaround. Production started becoming very slow and we are now almost finished with the inside. What's Lee's siting and a partial roof to be done and then minor things to finish on the inside. I think approximately 8k to finish the job pretty easily


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## Warren

Why was there no deposit at the contract signing?
Who's fault was the late truss delivery? Certainly not the homeowners.


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## elbud433

The bank wante to see progress before issuing the loan to the homeowner. Which the homeowner didn't have the start up funds. I told them as long as I was reimbursed I would fund the start up cost


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## jhark123

elbud433 said:


> Starting with the signing of the contract. The homeowners sign a contract stating contractor will provide all materials and labor for the scope of work attached to this agreement. I began the project out of my own pocket providing materials and labor for the foundation and masonry work. After the foundation was complete. I received my first draw you according to the contract and the amount of 20 K. Then Framing began. Framing started and basically took about three weeks to get everything up. The trusses came two weeks late. So the roof was not on until five weeks after the foundation. The homeowner stated that she wanted to get into her house as fast as possible as they always do. She then stockpiled her house with materials such as toilets bathtubs showers Sanks flooring etc. Which one was breach of contract from buying the material. Number two it made it almost impossible to work inside the house. After she had purchased them I told her that many of those items were not according to the budget. I told her that if she wanted those items I would have to reassess The estimate. For instance the budget included linoleum flooring, and she showed up with ceramic tile. Cruciate and stated that she was going to withhold some of the next draw to compensate for what she had purchased. I told her that we could sit down and talk about it. And maybe we could come up with something. I explained to her that there was many price increases due to this and Then she began stating that we broke things in her house. And we unplugged her freezer which damaged all of her food. And damage the freezer. And that we owed her for that also. I Astor for receipts. And she said that she did not have any. She would try to get them. It is been two months since that and I have not seen any receipts. Although I ask for them. She withheld approximately $10,000 from the draws stating that it was due to things that were broken in her house. And the material she bought. She then moved back into her house was unfinished with her family. Which made it extremely difficult workaround. Production started becoming very slow and we are now almost finished with the inside. What's Lee's siting and a partial roof to be done and then minor things to finish on the inside. I think approximately 8k to finish the job pretty easily


Paragraphs are taught in 1st grade.


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## elbud433

Sorry for the mass. I am on a smart phone


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## GO Remodeling

You might have to lawyer up for this mess.


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## Cuda

Sounds like the trusses stalled out the completion and bumped out her move in date, so you had to let her move in or she might have charged you a hotel fee. Now with all the stuff there I imagine it is hard to work. These things happen though everyone has dad to work for "That lady"


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## EthanB

I'd sit down with a lawyer and explain EXACTLY what has happened so far with as many supporting documents and photos as possible. It'll cost you at least a few hundred.

With only your side of the story it sounds like they would have breached my contract in a few areas. You should have addressed them right up front but withholding money from the contract is a HUGE no-no. I'd talk to a lawyer before I talked to the HO.


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## elbud433

Thank u


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## duburban

the quoting of linoleum and arrival of ceramic tile just made me shiver. good luck to you, and def just sit down with the lawyer. it'll pay for itself now and in your future too. 

hope this goes well.


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## KAP

Based on your explanation post, I have to agree with others, that at this juncture, consult a lawyer at a minimum before discussing with the client... 

BUT do not put this off, as it will just exacerbate the problem, so get it done tomorrow... Best of luck... 8^)


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## Anti-wingnut

elbud433 said:


> I really was just trying to make her a happy homeowner.


She is probably just looking for a real man


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## BlueRidgeGreen

You just learned some great things that will carry you forward in this business.

Iron clad contracts and timely change orders.

AND....being TOO NICE (permissive) is good for no one, not the client or you in the long run. You need to be confident and disciplined. Create an efficient plan/schedule (incl. payments), and then stick to it.....and require your client to do the same.
This is the "foundation" of what we do. A clearly defined process and a disciplined approach to achieving the shared goals of quality and value are the fundamental starting point for everything. 

Might cost you a bit, but the lessons are well worth it.....and ones that we all have had to pay for.

Document everyting, call your lawyer, GOOD LUCK.


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## CompleteW&D

BlueRidgeGreen said:


> You just learned some great things that will carry you forward in this business.
> 
> Iron clad contracts and timely change orders.
> 
> AND....being TOO NICE (permissive) is good for no one, not the client or you in the long run. You need to be confident and disciplined. Create an efficient plan/schedule (incl. payments), and then stick to it.....and require your client to do the same.
> This is the "foundation" of what we do. A clearly defined process and a disciplined approach to achieving the shared goals of quality and value are the fundamental starting point for everything.
> 
> Might cost you a bit, but the lessons are well worth it.....and ones that we all have had to pay for.
> 
> *Document everyting, call your lawyer*, GOOD LUCK.


One of the best posts ever here on CT.... WELL said!

:thumbsup:


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## GO Remodeling

A kitchen contractor that I sub with will have maybe 6 payouts for the job unlike some others that have only 2 or 3. He's never chasing money. If they don't pay that portion's invoice then one shows up. He explains that the subs have schedules and their job ( homeowners) is scheduled for only this particular moment.

Also, any delays in material delivery should be covered in your contract and extend the time frame.


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## elbud433

Thank you for your advice everyone. Update., I spoke with the homeowner today. I explained her that we are running short of money and need approximately 10% more. I'm surprised how She reacted to it. Calmly, She said that the bank would not give her any more money. Which I did confirm that with the bank. She said that she did not have any money in your savings. She did mention me doing extra work for her for free. Which she would buy the materials for to help absorb the cost . i did catch her lying to me about a few things. The bank gave her a draw schedule. That she never introduced to me. I am just finding this out. I told her I would brainstorm tonight. And she should brainstorm also so that we can come up with a meet in the middle decision. That's where I am left right now


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## Leo G

brainstorm with a lawyer.


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## Mavis Leonard

elbud433 said:


> Thank you for your advice everyone. Update., I spoke with the homeowner today. I explained her that we are running short of money and need approximately 10% more. I'm surprised how She reacted to it. Calmly, She said that the bank would not give her any more money. Which I did confirm that with the bank. She said that she did not have any money in your savings. She did mention me doing extra work for her for free. Which she would buy the materials for to help absorb the cost . i did catch her lying to me about a few things. The bank gave her a draw schedule. That she never introduced to me. I am just finding this out. I told her I would brainstorm tonight. And she should brainstorm also so that we can come up with a meet in the middle decision. That's where I am left right now





everthing al wron here tak yor beating on ths one finish somhow the thingained here is that meny lesson to be lerned if you analiz mistkae corrcly and no repeat again


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## GO Remodeling

If she doesn't have the money for the extras but wants them free? What store/company can do that?

Perhaps getting whatever money put into escrow that some independent party will payout upon completed steps can be arranged. Otherwise, I think your being played even and will eventually have spent even more time/money and THEN will get a lawyer.


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## KAP

elbud433 said:


> Thank you for your advice everyone. Update., I spoke with the homeowner today. I explained her that we are running short of money and need approximately 10% more. I'm surprised how She reacted to it. Calmly, She said that the bank would not give her any more money. Which I did confirm that with the bank. She said that she did not have any money in your savings. She did mention me doing extra work for her for free. Which she would buy the materials for to help absorb the cost . i did catch her lying to me about a few things. The bank gave her a draw schedule. That she never introduced to me. I am just finding this out. I told her I would brainstorm tonight. And she should brainstorm also so that we can come up with a meet in the middle decision. That's where I am left right now



It doesn't sound like you consulted the lawyer....


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## elbud433

I did consult a lawyer. The lawyer advised me to try and work it out with her first.do You have any other advice?


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## Leo G

Get a new lawyer.


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## elbud433

How do you think it should be handled?


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## Ninjaframer

Leo G said:


> Get a new lawyer.


Lol


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## BlueRidgeGreen

Do the Ben Franklin on it.

What will you gain or lose by going to court vs. working it out?

Sounds like her way of "working it out", is just digging a deeper hole to bury you in.

I wouldn't turn another screw for that lady until she coughed up 50% and signed off on at least another 25% of what you're owed.

P.S. Lawyers are expensive.

P.S.S. And they love things to be contentious. Sounds like yours isn't that bad. 

Does she have a small, expensive, yippy little dog she adores, that you could kidnap for ransom? That would be my next move.


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## duburban

what did the lawyer say about the point in the story when the HO came home with a bunch of material that was included in your scope of work?


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## elbud433

Actually yes she does have a dog small and yippie


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## elbud433

The lawyer stated that a judge would probably only award me markup and overhead costs on top of her material anyway. So he said it might not be that big of a contract breach


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## Ninjaframer

I almost walked away from a job that was going the way you described- had it out, I said things I regretted. After the dust settled they just wanted there project finished and it was my fault there was confusion- it was my job to set the terms, contract, etc and explain it till they understood. I ended up finishing for way less than the job was worth but I learned a lesson- don't let misconceptions or misunderstandings go on hoping they will work themselves out- they don't.


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## elbud433

So your advice would be to continue to work it out?


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## Osito

Has anyone used the "L" word. LIEN. That will get the banks attention.


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## TimelessQuality

Sounds like she took your draws from the bank and blew it...


Maybe hide the dog at the banker's house


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## elbud433

No I haven't used that word. . Should I use that work with the bank? Or the homeowner?


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## Ninjaframer

elbud433 said:


> So your advice would be to continue to work it out?


That depends- do they have the $ to get done? If they can cover the material and bare min labor than ya work it out- its better to lose some $ than have someone out there telling everyone they meet how bad you suck.


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## elbud433

She claims that she has no money.


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## Ninjaframer

elbud433 said:


> She claims that she has no money.


Than your F'd


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## TimelessQuality

Take credit cards...


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## BlueRidgeGreen

Lein.......lean is what he will be if he keeps this up.:jester:



I knew it......the yippy dog.

That does it for me. She has YOUR money somewhere.

Seriously though. If the only legal leg you have to stand on is markup on 10k of materials......you should try and work it out.

If I can guess what happened......there were conditions you let go without charges/amendments, change orders that never got written (verbal), and a host of other non-actionable missteps and allowances.

Work it out only if you think you can recoup some of your losses.......but for goodness sake, don't let it get worse.


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## Ninjaframer

And you suck- sorry but that's what she's gonna say every time someone even turns the TV to a home improvement show, every time she passes a home depot, every time she looks at a tool, you get the idea.


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## ryanshull

The Job should have never started. I don't even start a $5,000 job without enough money to cover my direct costs, let alone an $80,000 job.

How long have you been contracting?


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## Mavis Leonard

are you ablle to by remain materil to finish

mabe you need tosee bankr or sel somthin got any toys boats motrcycl xtra truck 

yu need to finish maybe not evrythin custom want jus finish an get cussomr to sin off 


or else you need tomov away in middl of night go to anothr stat


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## Calidecks

Always, always, did I say always? Negotiate the money before you do the work. If you try after the work is done you've lost all your leverage.


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## Mavis Leonard

Californiadecks said:


> Always, always, did I say always? Negotiate the money before you do the work. If you try after the work is done you've lost all your leverage.


 

he wa pass that now he need to bring ths to conculsion and considr it tuition in hard school of nocks


pay stupidtax


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## KAP

elbud433 said:


> Thank you for your advice everyone. Update., I spoke with the homeowner today. I explained her that we are running short of money and need approximately 10% more. I'm surprised how She reacted to it. Calmly, She said that the bank would not give her any more money. Which I did confirm that with the bank. She said that she did not have any money in your savings. She did mention me doing extra work for her for free. Which she would buy the materials for to help absorb the cost . i did catch her lying to me about a few things. The bank gave her a draw schedule. That she never introduced to me. I am just finding this out. I told her I would brainstorm tonight. And she should brainstorm also so that we can come up with a meet in the middle decision. That's where I am left right now


I don't get this... so you are shy $8K of which includes items that were above and beyond your contract and for which there should be Change Orders, but now you think she is somehow doing you a favor by getting MORE, as in EXTRA, work done for FREE where she is buying the materials to "absorb the cost", even though she "has no money"? So she has no money to give you towards the $8K but she DOES have money for the materials for EXTRA work?

Work it out does not mean bend over a barrel... 

If you want to work MORE for FREE that of course is your prerogative, but that should not even BE a consideration unless she cough's up the $8K. Your immediate response to her offering to buy materials while you work EXTRA for FREE should have been - *"I am confused, I thought you said you did not have money for the $8K in overages but you DO have money for materials for EXTRA work that you want me to do for FREE?"*... Her only response to that would be that she would have to use a credit card... and your response would be then she needs to take a cash advance to satisfy the $8K before you agree to give her *MORE OF YOUR LIFE* for *FREE*...

_*Banks don't give $80K loans to people with no savings and maxed out or no credit cards... *_ 

People who get approved for $80K loans especially in this financial climate DO have access to money, and to be frank where she gets it is NOT your problem...

You said your contract states - *"if costs are too low for unseen factors or events than both parties will make a good faith effort to modify the change."*

So *"good faith" *to you means that you provide MORE work for FREE while she doesn't satisfy the $8K she already owes you? That's certainly a GREAT modification for her... 

You asked me what would I do... with the limited information I have and the weak hand you are playing on this I would tell her the following... This is based on the assumption that they are happy with the work itself, just not the schedule and costs...

*"Mary, let me start off by saying that I appreciate your business and my sole goal here is to bring this project to a close for both of us. Straight to the point, we contracted together for a project totaling $80K, of which I did not require any money from you upfront and in fact ABSORBED $20K upfront moving your project forward in good faith. As projects of this size most often do, and for which we talked about this potential in the beginning, we ran into some delays and modifications to the schedule that were beyond our control (like the trusses). The schedule was also modified by the discovery of rotted joist, plumbing, etc... Once again, I put out the money for these costs upfront, but they contributed to the $8K in overages we discussed yesterday. Changes are addressed in our agreement and the costs are above and beyond the original agreement. Additionally, because of the modifications to the schedule, we were trying to be accommodating by letting you move back in before we were finished, but in hindsight, this just added more time to the schedule as we both had to work around one another which I think added to both our stress loads. 

One of the reasons we place in the agreement that we supply the materials is also for scheduling purposes so we are not working around the materials and to avoid damage and in that, there is also a mark-up that we are now also short on because you bought the materials instead of letting us do so as it states in the agreement.

Now all that said, what's important here is how we bring this project to a close so we both can move forward. We discussed yesterday me providing EXTRA FREE labor for you for additional work that you would like for which you would buy materials. I am willing to entertain that only because I recognize that in a business relationship we need to work with each other and there were some extraneous circumstances on this project. But I can't do that AND ignore a portion of the $8K in overages that are due. As I did from the beginning, I've already put that money out in good faith and I need the $8K to be reimbursed to finish the project. I don't know your personal finances, as I took on the project based on trust, and didn't require any credit checks, etc.. but what I do know, and which was one of the reasons why I put out $20K upfront before asking any money from you, is that banks don't give out $80K loans to people without assets, credit cards, etc.. in this financial climate... So I will leave how you come up with the $8K in your hands as your personal finances are none of my business except how it affects being reimbursed for the money I already put out and the money needed to complete the project. Remember, part of the $8K is also needed to finish the job which is both our goals. The more we delay in getting this $8K satisfied, the longer it will take to get the project finished and what I don't want to happen is a delay in getting this money which can lead to me having to start our next project and then finishing yours piece meal, but I have to earn a living and feed my family. I need to be clear, I cannot move forward to complete this without the $8K..." *

Now, it is EXTREMELY important that no matter what they say you keep your cool, do not raise your voice, and keep reiterating that you already put the money out in good faith and that it needs to be reimbursed and that part of the money is also needed to finish the project.

Remember, they wouldn't be asking you to do EXTRA work for FREE if they weren't happy with your work... remember that if it ends up in court...

Best of luck... 8^)


.
P.S. - I agree with LEO, get a different lawyer... All he said was try to work it out first? No suggestions of how using your agreement? Hope it was a "free" consultation... but at least you followed through and actually contacted one...


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## elbud433

Thank you for that. It does make a lot of sense Use exactly what you stated because that is pretty much what is going on. I will let u know how it turns out


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## Shellbuilder

Mavis Leonard said:


> are you ablle to by remain materil to finish
> 
> mabe you need tosee bankr or sel somthin got any toys boats motrcycl xtra truck
> 
> yu need to finish maybe not evrythin custom want jus finish an get cussomr to sin off
> 
> 
> or else you need tomov away in middl of night go to anothr stat


http://www.iespell.com/


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## Leo G

That's what you get with iSpell if you know how the word is spelled.



> maybe you need to see banker or sell something got any toys boats motorcycle extra truck
> 
> you need to finish maybe not everything custom want just finish an get customer to sin off
> 
> or else you need Molotov away in middle of night go to another stat


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## PrestigeR&D

.........











B,


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## elbud433

Dustine the contract that it is possible if they're on for seen circumstances or events in that were not originally foreseen it could be a price increase in both parties will try to make an agreement on the price. With that being said, the homeowners know from day one that there was a possibility for price increase and is that my fault that they claim to have no money? When from since day one the contract states that There can be added costs


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## PrestigeR&D

B,


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## Warren

elbud433 said:


> Dustine the contract that it is possible if they're on for seen circumstances or events in that were not originally foreseen it could be a price increase in both parties will try to make an agreement on the price. With that being said, the homeowners know from day one that there was a possibility for price increase and is that my fault that they claim to have no money? When from since day one the contract states that There can be added costs


So, the contract states that there may be added costs, but you never verified if the homeowner had the money or proper financing, nor did you get a deposit, nor did you set up a proper draw schedule.:blink:


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## Shellbuilder

Post your contract elbud and you'll get a lot more info.


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## EthanB

Leo G said:


> That's what you get with iSpell if you know how the word is spelled.
> 
> 
> "maybe you need to see banker or sell something got any toys boats motorcycle extra truck
> 
> you need to finish maybe not everything custom want just finish an get customer to sin off
> 
> or else *you need Molotov away in middle of night* go to another stat"



Wow, iSpell is harsh. Maybe it was programmed by ex-Mafia.:laughing:


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## Mavis Leonard

EthanB said:


> Wow, iSpell is harsh. Maybe it was programmed by ex-Mafia.:laughing:




my cognitive therapist forbid me to us aids fr spellin an stuff

that is what he need todo burn her dam hous down problem solve:thumbsup:


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## sledhead54

I feel bad for anyone in this kind of a predicament but the drama is better than cable. It's like watching a show called "Worst Case Scenario" which means even if all of this works out somehow, it's still going to be bad. Wallets, egos, bank accounts, reputations etc. etc. etc. are going to be hurting. I just hope the employees aren't getting the short end because the boss made a few mistakes.:no:


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## Warren

sledhead54 said:


> I feel bad for anyone in this kind of a predicament but the drama is better than cable. It's like watching a show called "Worst Case Scenario" which means even if all of this works out somehow, it's still going to be bad. Wallets, egos, bank accounts, etc. etc. etc. are going to be hurting. I just hope the employees aren't getting the short end because the boss made a few mistakes.:no:


Employees?

Yeah, right!


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## elbud433

Ya. "Subs"


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## Mavis Leonard

damn i cant take mysel frm this thread watching it is like trainwreck who will survive who will beparalyze or braindead ordisfigure


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## TimelessQuality

Mavis Leonard said:


> that is what he need todo burn her dam hous down problem solve:thumbsup:


You crack me up Mavis


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## Mavis Leonard

TimelessQuality said:


> You crack me up Mavis




thnks maybe funny butit would solv his problems


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## Mavis Leonard

sledhead54 said:


> I feel bad for anyone in this kind of a predicament but the drama is better than cable. It's like watching a show called "Worst Case Scenario" which means even if all of this works out somehow, it's still going to be bad. Wallets, egos, bank accounts, reputations etc. etc. etc. are going to be hurting. I just hope the employees aren't getting the short end because the boss made a few mistakes.:no:




it a catch 23 sitation the bad decisions are alreadydon way pas th point of salvagin this unless op come up with some mone and call it a learn experienc

best 3 if no money be had

1 op pack up an leav town in dead off nitght

2 he burn th whole dam thing down

4 kill th bit#$

3 fake his own deth


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## elbud433

Will post contract. With names and dates blacked out tomorrow.


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## Mavis Leonard

elbud433 said:


> Will post contract. With names and dates blacked out tomorrow.


anyway yo can asborb the loss and move on? talk to yourbanker mabe or sell somethin to raise th mony get this behind you and moveon to anothr job make mony on nex one


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## elbud433

Not possible. My only options are homeowner pay or move on without completion.


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## Mavis Leonard

elbud433 said:


> Not possible. My only options are homeowner pay or move on without completion.




anyway you can gether too sign off that she will not sue you fr noncomplete i kid som but feel bad for you myboss uncl lost some big money early on but always complete jobs an says it was wrthever penny paid make him much wiser an more profitbl in the end


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## Mavis Leonard

elbud433 said:


> Not possible. My only options are homeowner pay or move on without completion.




ar you shrt material what about her return tile buy vinal for floor use differenc for som othr matrieals


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## elbud433

She won't have it. She said she's a "material girl" and my choices of material we junk. And I told her I can't put 20lbs in a 10lb box


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## Mavis Leonard

elbud433 said:


> She won't have it. She said she's a "material girl" and my choices of material we junk. And I told her I can't put 20lbs in a 10lb box


 

she ageed to your material choices rite damn this look mor lik a cntrct issure regard materials you may hav to walk away an wait for sherrif deputy to serv a summons if she is a bit$$h princess godzilla bit^% wol


mabe she wont hav mony for attrony anyway if she hav mony for lwyer she hav money to pay for hr upgraded materialsf


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## PrestigeR&D

B,


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## Mavis Leonard

tisa soap oprah cant wait too heer how it work out


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## Tom Struble

Mavis Leonard said:


> my cognitive therapist forbid me to us aids fr spellin an stuff


well whats your therapist recommend we do?:blink:


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## Mavis Leonard

Tom Struble said:


> well whats your therapist recommend we do?:blink:




ifyou wan ignore me i trying mybest rihgt now i aprrciat thos who ar tolrant of my problem


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## KAP

Mavis Leonard said:


> ifyou wan ignore me i trying mybest rihgt now i aprrciat thos who ar tolrant of my problem


Mavis, don't sweat it... I'm actually getting used to it... actually, as long as you get the first and last letter, the words actually present themselves...


.
elbud433,

How did it go? Were you able to work it out?


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## Mavis Leonard

KAP said:


> Mavis, don't sweat it... I'm actually getting used to it... actually, as long as you get the first and last letter, the words actually present themselves...
> 
> 
> .
> elbud433,
> 
> How did it go? Were you able to work it out?


 thnk you

this a valubla thred for learnin i do feelbad for op he make a lot mistakes i hope he wrk out or can walk away with out being sue i thnk customr sound lik a bi&^% but he mabe scrw up with unspecific contrct language

i thnk maybe op need to abandn an giv reasn as breech pof contrct wors can happen is she sue if he speck vinyl an sh wan til too bad small part but if sh pull tht on evrthin it addedup

damn op is in bad plac mus be his fisrt big job

she breech conract but you deeal with when it happen no afer it ruin buget

op if yu abandon job do yu hav any toool an equipmen on sit mak nic for while an when sh is nt there or not kookin at load it al up an drive off into th sunshine



that my be all u can do


abram lincoln say this to shall pass


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## ryanshull

So, when I need a foundation poured, can I come to the credit union of Elbud?


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## Mavis Leonard

i rethink som hathis contrac say? estimate? I thnk mabe he shoul walk away iff he is evn as afr as bin paiid especail if he behin maybe she screw him?


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## Unger.const

I think you should tell her not to worry about any more money. And that you would go and get a loan from somewhere and put up your own assets as collateral. And that you will work nightshift somewhere to help pay for her car payments to help her out of her financial burdens. Well better yet you will hire your competitor to finish the work while you sell your tools on Craig's list to pay him.

SHE IS PLAYING YOU LIKE A FIDDLE!!!!!!

I understand that you have a passion to swing a hammer and build things and your happiness comes from people that are happy with your work. But why are you giving water to the weeds and spraying weed killer on the flowers? Its time to stop giving her more water!!! Get thru this and focus on your other customers that bloom with joy when you do what you do for them. 

Now lawyers cost money that you don't have (but don't be afraid of that path if you must go that way) and I have a feeling she is use to getting her way when she steps on good people. And it pains you to try to push people around. 

Here is what I would do/say.......... well ma'am we are both in a bind financially and I always want to finish what I start and I will finish your home. However after improving your homes value out of my own pocket I have used all the money I have and since some of the scope of work that we had originally agreed to has cost more due to some of your decisions to upgrade to or want things that are more labor intensive then the original estimate we started out with and I don't want to begrudge you nice things. So I will finish your house as soon as I can. And in order to help out with financial bind that I'm in until you can get caught up on what you owe me I will have to take other jobs on other homes........ say three days a week perhaps even four days per week depending on those tasks. So I WILL WORK ON YOUR HOME EVERY WEEK probably two days a week sometimes one day a week but I will be there. And I would understand if you would like to get some quotes from other contractors to work on the your home on the three days a week that I won't be able to that would be ok. Just let me know who it is so we can work out who's warranty would cover what. And I don't want to get you in trouble with your bank so if you could find out how a lien on the property would effect your loan before or after the project is completed and how would it effect payments to the other contractor you may get to work on the house when I'm not there. Oh and if you need me to explain things to the other contractor just give me his/her phone number and I can explain the technical stuff (like how you don't have any money to square up with me for all my hard work)anyways I hope we can all get thru this soon so for the next couple days I will be out working on other projects and I'll see you on Wednesday!

I am not kidding you about the previous paragraph. And I am betting that you are a nice guy and are not confrontationally guy this the pickle you are in.......and she is confronting........ thus the pickle you are in..........so either type the previous paragraph out on paper or in an email and once she gets it........FOR CRYING OUT LOUD DON'T ANSWER YOUR PHONE/VOICEMAIL/EMAIL FOR THREE YES THREE DAYS.........A control freak like her will panic and only after three days she will figure out that no one else will do the work for free or almost free..........her banker will say it would not help her to have a lien against her and would be a nightmare for her deal with and that the easiest way to get out of the pickle she is in is to square up with you. And she will need the banker to tell her fix it with you and other contractors tell her that it would cost double or triple to do what you are doing. And if she calls a lawyer he is pretty limited with what he can do since your not walking away from the work. and he would talk about how she has improved property that has increased in value and that you can lien her property and that it would take as much or more money to fight it then to just pay you.

Turn the tables on her........right now you are the one stressed about it........let her read your note and stress about how she is going to square up with you and save face.........but let her throw a tantrum not get her way throw a bigger tantrum and again not get her way. Then sweat it. Then sweat it more than let her worry and stress how she will make this right with you.

Trust me on this because I use to be you and still am. I figured this out about women like this because of being in your shoes. And I have learned that in dealing with those type of customers I stopped doing what I use to do by letting them walk on me..........I stopped watering the weeds in the garden and gave that water to the flowers. It will surprise you how humble the weeds become without your attention.


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## Warren

This appears to be a classic case of the cheap homeowner with expensive taste, versus the unprepared, inexperienced, over his head, dollars in his eyes, fly by night contractor. We all know how this ends. 

I am surprised at all the love and support that is being shown here. We are only hearing one side of the story.


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## elbud433

Update. Untold her i can not financially support the work. So she called the code inspector I haven't spoke to the code inspector twt


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## Unger.const

WWWWHHHHHAAAATTTTTTTTTTTT? that's has to be cruel and unusual punishment! We haven't heard from ebud in like a week and the suspense is killing us. And then he updates us with almost two sentences. How did you tell her? What did she say? Why is the code inspector called? Was this all unpermitted? If so why? Was it at her request for no permit? Or yours? Do you have a license to build or not?............will little Timmy make it out of the well? .............can Lassie get help in time before its too late? Will many more contractors stumble upon this post and add more in site to the conversation?......... stay tuned to the next instalment of "asking for more money"


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## elbud433

I spoke with the woman on the phone. It's nice one over the contract with her. And explain to her that I need more money to complete the project due to unforeseen circumstances in added costs as well as her preaching the contract. I told her that the breach of contract where she bought materials undercut my Markup And while she stockpiled the materials inside the house they were not coordinated with what we needed to do. Therefore we constantly had to work around the materials caught adding more time to the project. 
She told me that she had no money. And that she still want me to complete the work. I told her I was not financially stable enough to complete her project without her supplying the money. And I explained that I had Fronted the cost of the start of the project and I have not yet be being reimbursed for that. Explained her that the contract stated that it was a possibility for cost increase from the beginning of the project. And that her excuse for no money was not a good one. I told her To let's try and come up with something. And we ended the conversation like that. Before the conversation depended she did state that she would sue me if she had to. And press charges. I told her I can't do anymore work without her going me money.
I did pull permits for this job I have been in contact with the cold officer throughout the entirety of this project. The homeowner called the code officer. The code officer showed up to another job site that I have going on, However I was not present when he showed up. The code officer explained to one of my subcontractors who was present that I cannot just walk off the job. And they didn't want I get the attorney general involved. My subcontractor explained that she did not have anymore money and that I cannot financially support the job. So the code officer left him with a message for me to call him. Which I did several times but no answer


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## Unger.const

I believe the code officer is on your side as much as they can be on a side. So for her to use the code Dept. Is weak at best. As for a lawsuit goes if she has money for an attorney then she has the money to finish the job. Not to mention a lawyer would have a hard time to justify most or all of it.

Since she is the one changing the intended agreement. (Tile instead of vinyl flooring). You see she can't go into a restaurant order a "beef hamburger" and when it shows up to the table say "where the F' is my steak?" Argue about the order and say well I did want "beef steak" (to her its the same thing since they both are beef! And that tile and vinyl flooring are both flooring! However in our kitchen analogy here the cook knows that preparing the two are done differently as well as the cost of materials) and then after she eats the entire steak and has dessert and a few more glasses of wine and the bill shows up she says

"you can't charge me for the steak, dessert and wine because I only brought enough money for a hamburger"

Now in this scenario the restaurant can legally charge her for everything and the hamburger too. Refusal to pay is known as theft of services. In the restaurant biz you can survive a couple of unpaid orders. But when we are in the contractor biz the financial leverage is too large to turn away from. If she had given you a bunch of money up front and walked away you would need to panic. But any judge would see that you started and carried the money to do so out of your own pocket . And her refusal to pay is known as "theft of services" in court it she would be forced to pay since she has financially gained through her real estate. (Thus the reason for liens to reimburse that owed to people from the home owners.)

Food for thought to help your case and not put the code officer in the mix any longer is to ask him in an email that "everything on that project to date has met or exceeded code levels so far' and nothing else (this is only a factual statement that keeps them out of the fight. And let's her know she can't use that threat anymore)

You need to be her hero. But in order to do that she will need to realize that she has fallen off the cliff and you are the only person that owns a rope. You can offer for her to return things like the the tile and the gold plated toilets and give you the money and you will go get the materials in the original scope if work after she gets you the money.

Also if you have her email I would urge to communicate that way and that will give you a paper trail of what you actually said and her responses back. It will speed up the facts of your case and save your butt to award your money to you. Also if you know who the bank is that has loaned her the money. And no joke here talk with them asap.........now they may not be aloud to tell you anything and that is fine. But there is no law that says they can't listen to your side of the deal. And if they find that they have loaned a money on real estate and its not going there they may write any further checks to both of you and she can't party with the money anymore as well as tell her to pay you pronto! Your ass is on the line here as well as your biz. Don't let some idiot run it into the ground and by idiot I mean YOU! Do what you need to whether you like it or not. Lots of other professionals on here are pulling for you as well as your family is too. But no one is going to make you fight your own fights. But don't let us down. 


(Unger Construction Eats popcorn on the edge seat waiting for more episodes to arrive)


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## sledhead54

I don't see it going well in court to leave someone's house unfinished. I'm just looking at it objectively that if a homeowner enters into a $100k addition/remodel but only has 25K to work with (whether knowingly or not), a contractor can't just removed the living room and kitchen exterior walls and say they can't proceed without more money. As a contractor, you'll be forced to close the house up at the very least so that the house can be occupied, even if it's doing so with YOUR money and all that you can do is put a lien on the property. All this does is cover you and make you look as good as you possible can to a judge. If the contract was only 10% off, odds are that the house is closed off and livable, you're just forced to wait on money, wait on a court date, or wait until you have no choice to put a lien on the property. 

It's a tough spot to be in and I do feel bad for you, but this is the learning experience that books get written about.


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## elbud433

I need enough money to put a new roof on. And she is in a livable situation. Everything else that needs to be done is only cosmetic. However I don't have the money for the roof


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## ryanshull

In my little town, the inspector also works as a mediator to help folks stay out of court, I don't know about Elbuds town.

You might as well get your bankruptsy papers written up, because that is where this is headed. Sorry, bro.


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## elbud433

Do you think my corporation status will save personal assets


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## ryanshull

elbud433 said:


> Do you think my corporation status will save personal assets


Lol, yeah. I was being sarcastic about the bankruptsy, but yeah.

Best thing you could do for your own self and reputation is to eat it for the next year and work other projects overtime to pay for that one.

I personally would want to pack up and leave town, but that solves nothing.

Keep us posted as things progress. Wish you the best.


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## elbud433

Thanks


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## Osito

Contact the bank.. If she got a loan they need a lein release, If she used funds that are yours then she MUST be held to task.


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## Inner10

If you are actually as broke as you say you are then who cares if you're going to be sued. Can't get blood from a stone. :thumbup:


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## FrankSmith

I need some feedback on the thought I have. The contract spells out payment milestones. The first of these is a deposit or initial payment. You then take the project to a set point of completion at which point the next scheduled payment it due. This back and forth is set up so that neither party is fronting all the risk or all the money. If the customer is not paying as agreed in the proposal, shouldn't the contractor be able to tell the customer that work will not continue until the customer is current with the agreed payments. I have never had to do this but as I work out my payment milestones I have always thought this is how the process works. I agree you cant tell some one you are not going to finish the project but you should be able to tell them you are going to have to put there project on hold because they have failed to pay as agreed. This happens in every industry. As a read this I keep wondering if the op is not telling the full story because this isn't what happened. I could just be that uniformed on this subject. If that is the case I would like to know right away. I envision myself fronting little risk because of the back and forth structure of the payments. If I am actually locked in to continuing each project regardless of my customers actions, I would want to do credit checks before I start working for some one on any larger project.


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## Timo

FrankSmith said:


> I need some feedback on the thought I have. The contract spells out payment milestones. The first of these is a deposit or initial payment. You then take the project to a set point of completion at which point the next scheduled payment it due. This back and forth is set up so that neither party is fronting all the risk or all the money. If the customer is not paying as agreed in the proposal, shouldn't the contractor be able to tell the customer that work will not continue until the customer is current with the agreed payments. I have never had to do this but as I work out my payment milestones I have always thought this is how the process works. I agree you cant tell some one you are not going to finish the project but you should be able to tell them you are going to have to put there project on hold because they have failed to pay as agreed. This happens in every industry. As a read this I keep wondering if the op is not telling the full story because this isn't what happened. I could just be that uniformed on this subject. If that is the case I would like to know right away. I envision myself fronting little risk because of the back and forth structure of the payments. If I am actually locked in to continuing each project regardless of my customers actions, I would want to do credit checks before I start working for some one on any larger project.


What you suggest does make some sense. 

In the current case, it is safe to say that this situation would not have developed if the contractor was a more seasoned business pro. I'm not saying that the contractor is wrong, but his bull chyt detector will hereby get reprogrammed and this scenario is much less likely to ever happen again. Been there, done that.

For the new guys reading this, these customers exist. It is your job to recognize them and not allow yourself to do business with them until such point you are a good enough business man to manage the risks.

It's not all about the sticks and bricks. 

PS, in my jurisdiction, receiving goods or services from someone with no intent to pay for them is a criminal offense. Theft of services is against the law.


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## Unger.const

TALK TO THE BANKER!!!!!!!!!!!!!!!!!

Why are you screwing up you biz.......your life........your reputation,,,,,,,,,,your family????? All because this chic is screwy?

I just built a small house for my neighbor (the husbands sister wanted a 600s.f. House to live in by herself) and it was a little rough at times for a few reasons but it got built.......and finished (fun little house) well long story short here most of the problems came from him wanting to take short cuts on things and pull stupid moves for no logical reason......after a while I saw his pattern got thru to the end of the project. Then they asked for a bid to build a new privacy fence around the back half of the property to enclose behind the main house and surround the sisters little house. I tried to be nice about being too busy to even work on a bid. But the wife kept asking and wanted to describe the layout..........the short version was that the property line between us has been used to go around there house and over our property to walk around (they have a corner lot with public streets on two side as well as plenty of access not on our side) and she wanted to put a gate on the new fence to keep things private between us and yet have a gate that would open to our property so they could walk through our yard as they pleased. I might it nicely known that a gate on the property line would be not so good of an idea. Then several days later the husband put out several stakes and a string that went clearly into our yard and carved out a chunk of land from us. My wife asked him why was there string in our yard and he eventually yelled at her saying that that is the new property line (there was a survey stake from last summer showing where the property line was when the new house was built) and thats where he thinks it should go now and the survey was wrong and that we can't just cut off access to his property like that.

So just like with the lady that is jerking you around.............I had it and sent them a long email warning to never talk to my wife like that again or things will be not good for anyone and that he had 24hrs to remove the string or else blah blah blah. I don't think they left the house for three days The point is I had enough of people who think that they can walk all over us either personal or work and if being the nice guy for too long isn't working then do something else....do ANYTHING else!!!!!!!


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## TimberlineMD

FrankSmith said:


> If the customer is not paying as agreed in the proposal, shouldn't the contractor be able to tell the customer that work will not continue until the customer is current with the agreed payments.


My lawyer says that the contract has to have a 'stop work notice' if the contractor wants to stop work because of a customers failure to make progress payments. If no clause exists, a contractor cannot stop work without breaching the contract. 

Apparently, there is legal precedence for a customer to recover damages from a contractor that stops work for non payment, without a 'stop work' clause in the contract.


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## Calidecks

TimberlineMD said:


> My lawyer says that the contract has to have a 'stop work notice' if the contractor wants to stop work because of a customers failure to make progress payments. If no clause exists, a contractor cannot stop work without breaching the contract.
> 
> Apparently, there is legal precedence for a customer to recover damages from a contractor that stops work for non payment, without a 'stop work' clause in the contract.


Yea but all you have to do is send a guy there for 10 minutes a day


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## elbud433

I have a Saftey hazard clause that says if a Saftey issue exists then work may hault at any time until the issue is fixed. And if the issue is not proven to be caused by the contractor then the home owner must pay for such issues. So there is a stop work clause. Only for Saftey/ health hazards


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## Calidecks

elbud433 said:


> I have a Saftey hazard clause that says if a Saftey issue exists then work may hault at any time until the issue is fixed. And if the issue is not proven to be caused by the contractor then the home owner must pay for such issues. So there is a stop work clause. Only for Saftey/ health hazards


All jobs have them, easy to find safty hazards


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## A-1 Interiors

Good luck brother 
I have to say I am learning more about customers like this as well 
I try to please My customer's and tend to not like confrontation , Unfortunately people like this can sense this and proceed to take advantage .
I hope this works out for you and I am sure you will learn from this lesson 
Personally I just learned a 1400 dollar lesson myself because i was not specific enough about what was not included in my scope and by not getting a signed and agreed upon change order amount as soon as the words left the customers mouth about a couple changes 
I wont make that mistake again


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## Warren

pibe said:


> 8k more? The way i understand it is he fronted the 8k himself in good faith which they have refused to reimburse him. Doesnt sound like there is any "more" to it at this point. Maybe i missed some things.


You got some reading to do.

He claims the homeowners bought some of the flooring and other materials themselves. Many of these were upgrades over what he was suppose to provide. He also had a few other issues (late truss delivery, other job delays, etc) which caused his costs to rise. His contract appears to be full of holes and he did not require them to make an initial deposit.


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## FrankSmith

KAP said:


> $500 cost
> $400 overhead (includes your pay)
> $100 GROSS profit
> 
> If your costs were $501 but your $400 overhead and $100 profit remained in tact, then your costs would now be $501, your overhead $400 and your profit $99...
> 
> Your costs and overhead are what they are... the profit is there for a variety of reasons, but one is absorbing loss among the first two if you cannot get them reimbursed... the opposite is also true, if you SAVED money on materials, and finished the job in less time that you accounted for, your GROSS profit INCREASES as well...
> 
> The challenge is most guys do not distinguish what they pay themselves versus company profit... they think they are one in the same, they are not... then there is GROSS profit versus NET profit...
> 
> Here's an indicator... If you are not paying your company at the end of every job, you are not charging enough, and will constantly find yourself in robbing Peter to pay Paul cycles...
> 
> BTW, the "real men" comment was directed back at the one who introduced it to the conversation...


It seems you would say the job lost money only if it exceeds the planed budget by $101 and then cuts into overhead. You are also saying that EVERY job should pay the business which would make me think that if the job exceeds the planed $500 you would call it a loss (granted you did say that one of the functions of profit is to cover such an overage) So lets get to the bottom of this. The example has been given. At what dollar amount does that job become a looser?


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## Inner10

KAP said:


> $500 cost
> $400 overhead (includes your pay)
> $100 GROSS profit
> 
> If your costs were $501 but your $400 overhead and $100 profit remained in tact, then your costs would now be $501, your overhead $400 and your profit $99...
> 
> Your costs and overhead are what they are... the profit is there for a variety of reasons, but one is absorbing loss among the first two if you cannot get them reimbursed... the opposite is also true, if you SAVED money on materials, and finished the job in less time that you accounted for, your GROSS profit INCREASES as well...
> 
> The challenge is most guys do not distinguish what they pay themselves versus company profit... they think they are one in the same, they are not... then there is GROSS profit versus NET profit...
> 
> Here's an indicator... If you are not paying your company at the end of every job, you are not charging enough, and will constantly find yourself in robbing Peter to pay Paul cycles...
> 
> BTW, the "real men" comment was directed back at the one who introduced it to the conversation...


Gross profit is the amount before deducting overhead, payroll, tax, etc. So 100 isn't a gross profit it's net. (although it's an oversimplified model).



FrankSmith said:


> It is not cut and dry. You just made a comment that it is cut and dry and I can not even guess if you would say the job lost money at $501, $601 or $1001. Which would it be?


Frank read my post again...not every second word.

500 C, 400 OH, 100 NP

Total Cost is 900, money left in the bank is 100.

Therefore if your costs rise beyond that $100 margin you are in the red (red meaning negative balance).

Therefore if your costs go to 601...601 + 400 OH = 1001. You got 1000, you spend 1001 that ends up with a negative balance of 1. You are now taking money out of your account to pay for this job.

That is what we call loosing money.

Let's try a different example. If Johnny starts the day with 5 apples, he is offered 1 apple to shine your shoes, he takes the job but has to spend two apples on expenses he is left with 4 apples. Less than before he did the work...hence "losing".

When you lose something...you have fewer of said somethings than when you started.


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## BamBamm5144

Well let me tell you I just lost my shirt on a job and it is MY fault.

I had $30 left over at the end of this job. It took three days and I target for $750 a day. So I lost $2200 at the end of this job. I got no pay. My company made zero money.

I hear all the time about guys who say they made $500 on a job and I say that's good, what did the company make and they say " huh, $500."

That's the problem with this business. I would say only a select few actually get it.


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## ohiohomedoctor

KAP said:


> The first paragraph was primarily for you... meaning, eating it and paying for it on your dime doesn't stop them from "redding you all over the internet"...
> 
> No offense, but since you "loose money on jobs several times a year,"and you think... "its just the way it goes", you might want to read the rest of it...
> 
> Losing money is not how real men role... learning how NOT to lose money is how real men role... :thumbsup:


In the interest of my new quest of not getting so butt hurt and going all postal in a self destructive spiral of bannedness Ill just say that anyone who is committed to customer service and a good reputation will loose money on a job from time to time. Now perhaps you are more perfect than I which wouldn't be hard, but I doubt highly you always make money.

I am also not interested in a financial lesson. I understand to xs and os, it is what it is.


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## FrankSmith

Inner10 said:


> Gross profit is the amount before deducting overhead, payroll, tax, etc. So 100 isn't a gross profit it's net. (although it's an oversimplified model).
> 
> 
> 
> Frank read my post again...not every second word.
> 
> 500 C, 400 OH, 100 NP
> 
> Total Cost is 900, money left in the bank is 100.
> 
> Therefore if your costs rise beyond that $100 margin you are in the red (red meaning negative balance).
> 
> Therefore if your costs go to 601...601 + 400 OH = 1001. You got 1000, you spend 1001 that ends up with a negative balance of 1. You are now taking money out of your account to pay for this job.
> 
> That is what we call loosing money.
> 
> Let's try a different example. If Johnny starts the day with 5 apples, he is offered 1 apple to shine your shoes, he takes the job but has to spend two apples on expenses he is left with 4 apples. Less than before he did the work...hence "losing".
> 
> When you lose something...you have fewer of said somethings than when you started.


You can make numbers say anything you want them to. Overhead is not fixed either. Its a target. I have seen a lot of business with large overhead budget who where having a bad year and I they did not keep to the budget. They cut it in half right in the middle of the year. Now the jobs that "cut into overhead" magically turned green. 

That overhead pays our salaries and maybe even pays our wives (or husbands). It pays us rent for our shops we personally own. It pays for the vehicles we drive. There are probably guys on this site who visits the red a lot and makes a lot of money and is doing very well for themselves. 

If you budget to do 1,000 jobs in a year that are all $1,000 jobs with the number break down described you would have a $400,000 overhead budget. If every job all year cost you $505 (five dollars above the line on every job) but you increased your volume and actually completed 1,100 jobs you end up with $44,500 extras at the end of the year. This means that every job all year went over budget but because you increased your volume you end ahead. 

Its not as black and white as you want it to be and that is why I made you speak for yourself rather then assume. I don't care if every job is a winner. I care if every year is a winner. Even years get harry on paper because of how cash flow works with large projects as the years switch. 

The greater point here is that you can't assume some one needs to here you talk because they have some jobs in the red. For all you know his business is making more money then yours and paying him more then yours pays you. The fact that he isn't stressed about a little red ink tells me he might be doing very well.


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## Inner10

FrankSmith said:


> You can make numbers say anything you want them to. Overhead is not fixed either. Its a target. I have seen a lot of business with large overhead budget who where having a bad year and I they did not keep to the budget. They cut it in half right in the middle of the year. Now the jobs that "cut into overhead" magically turned green.
> 
> That overhead pays our salaries and maybe even pays our wives (or husbands). It pays us rent for our shops we personally own. It pays for the vehicles we drive. There are probably guys on this site who visits the red a lot and makes a lot of money and is doing very well for themselves.
> 
> If you budget to do 1,000 jobs in a year that are all $1,000 jobs with the number break down described you would have a $400,000 overhead budget. If every job all year cost you $505 (five dollars above the line on every job) but you increased your volume and actually completed 1,100 jobs you end up with $44,500 extras at the end of the year. This means that every job all year went over budget but because you increased your volume you end ahead.
> 
> Its not as black and white as you want it to be and that is why I made you speak for yourself rather then assume. I don't care if every job is a winner. I care if every year is a winner. Even years get harry on paper because of how cash flow works with large projects as the years switch.
> 
> The greater point here is that you can't assume some one needs to here you talk because they have some jobs in the red. For all you know his business is making more money then yours and paying him more then yours pays you. The fact that he isn't stressed about a little red ink tells me he might be doing very well.


You were the one who provided the hard numbers and asked the question...I didn't make up the numbers, you did.

Obviously he could be making infinity more money than I do but my point stands, if you are loosing money on SEVERAL jobs a YEAR something has to change.

Everyone's business has areas that need improvement...and if mine involved thinking it was perfectly fine to loose money on multiple jobs per annum...I'd focus on that first.


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## KAP

ohiohomedoctor said:


> In the interest of my new quest of not getting so butt hurt and going all postal in a self destructive spiral of bannedness Ill just say that anyone who is committed to customer service and a good reputation will loose money on a job from time to time. Now perhaps you are more perfect than I which wouldn't be hard, but I doubt highly you always make money.
> 
> I am also not interested in a financial lesson. I understand to xs and os, it is what it is.


Dude I used to be you (your thinking that is)... Being committed to customer service and not losing money are not two mutually exclusive things... 

The reason I think it is important in your case, is that you made the comment that you lose money several times per year... that is NOT a good thing. So that means you are either not charging enough (or estimating for labor is off or you are guesstimating materials) or you are giving away to much in freebies under the banner of "customer service" or some other reasnon... the best customer service is under promising and over delivering... but that doesn't mean losing money. Learn to extract money from your business...

But if you are not finding yourself in the middle of robbing Peter to pay Paul cycles, and paying your company with profit is not a foreign concept to you, who am I to say what you are doing is right or wrong? If you are however, there is a better way of operating so you don't have to experience those ups and downs...

Most of my jobs come from referrals, the rest from home/street shows... so customer service is VERY important to me... but so is not losing money, which affects not just me but my family...


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## ohiohomedoctor

I make a decent living. I go on vacation several times a year, I spend a lot of time with my kids, and I have a business which will grow as fast as I want it to. Most of my work is from refferals too.

Bidding remodeling is not an exact science. We usually have several nice projects going at one time so taking a small loss to gain future work on a few projects a year doesn't affect my family at all. Getting all indignant and throwing around menial change orders might though. 

Like I said, most will likely not agree.


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## Inner10

ohiohomedoctor said:


> I make a decent living. I go on vacation several times a year, I spend a lot of time with my kids, and I have a business which will grow as fast as I want it to. Most of my work is from refferals too.
> 
> Bidding remodeling is not an exact science. We usually have several nice projects going at one time so taking a small loss to gain future work on a few projects a year doesn't affect my family at all. Getting all indignant and throwing around menial change orders might though.
> 
> Like I said, most will likely not agree.


Sure you just aren't exaggerating any trying to sound all high and mighty about loosing money?:whistling


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## ohiohomedoctor

Inner10 said:


> Sure you just aren't exaggerating any trying to sound all high and mighty about loosing money?:whistling


I need not exaggerate and didn't intend to come off high and mighty so if I did I'm sorry. I am just supporting my stance. 

I have as much to learn as the next guy, I'm just sharing some of what I have gathered so far. 

Btw, today is my 30th b day so I'm a little depressed about loosing my 20's and entering middle age so if I am coming across a little tudey again I'm sorry..


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## KAP

FrankSmith said:


> You can make numbers say anything you want them to. Overhead is not fixed either. Its a target. I have seen a lot of business with large overhead budget who where having a bad year and I they did not keep to the budget. They cut it in half right in the middle of the year. Now the jobs that "cut into overhead" magically turned green.


Now imagine if they cut the OH in half in the beginning of the year... :thumbsup:




FrankSmith said:


> That overhead pays our salaries and maybe even pays our wives (or husbands). It pays us rent for our shops we personally own. It pays for the vehicles we drive. There are probably guys on this site who visits the red a lot and makes a lot of money and is doing very well for themselves.


LOMP...




FrankSmith said:


> If you budget to do 1,000 jobs in a year that are all $1,000 jobs with the number break down described you would have a $400,000 overhead budget. If every job all year cost you $505 (five dollars above the line on every job) but you increased your volume and actually completed 1,100 jobs you end up with $44,500 extras at the end of the year. This means that every job all year went over budget but because you increased your volume you end ahead.


That again, is an oversimplification... with an increase of 10% of the amount of jobs you complete, comes another set of circumstances which can directly affect your budget model...




FrankSmith said:


> I don't care if every job is a winner. I care if every year is a winner.


The former has a lot to do with the latter... 




FrankSmith said:


> The greater point here is that you can't assume some one needs to here you talk because they have some jobs in the red. For all you know his business is making more money then yours and paying him more then yours pays you. The fact that he isn't stressed about a little red ink tells me he might be doing very well.


No-one said anything in a malicious way so I don't understand your angst here...

Not saying he is one of them, but I know lots of guys who outwardly aren't stressed about money but struggle every month...


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## TimelessQuality

Happy bday doc!


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## KAP

ohiohomedoctor said:


> I need not exaggerate and didn't intend to come off high and mighty so if I did I'm sorry. I am just supporting my stance.
> 
> I have as much to learn as the next guy, I'm just sharing some of what I have gathered so far.
> 
> Btw, today is my 30th b day so I'm a little depressed about loosing my 20's and entering middle age so if I am coming across a little tudey again I'm sorry..


Happy Birthday... :happybday: :drink:


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## Inner10

ohiohomedoctor said:


> I need not exaggerate and didn't intend to come off high and mighty so if I did I'm sorry. I am just supporting my stance.
> 
> I have as much to learn as the next guy, I'm just sharing some of what I have gathered so far.
> 
> Btw, today is my 30th b day so I'm a little depressed about loosing my 20's and entering middle age so if I am coming across a little tudey again I'm sorry..


Well happy birthday! You aren't middle aged yet unless you plan on keeling over dead at the age of 60.


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## KAP

ohiohomedoctor said:


> I make a decent living. I go on vacation several times a year, I spend a lot of time with my kids, and I have a business which will grow as fast as I want it to. Most of my work is from refferals too.
> 
> Bidding remodeling is not an exact science. We usually have several nice projects going at one time so taking a small loss to gain future work on a few projects a year doesn't affect my family at all. Getting all indignant and throwing around menial change orders might though.
> 
> Like I said, most will likely not agree.


All that said, don't you think it would better to work reducing your instances of losing money several times per year to just a couple and then none?

It absolutely can be done... we do it, I believe Leo says he does it, and I am sure there are others...

A Change Order is simply something that wasn't accounted for in the original project... we all have customers we do extra's for... BUT, it should be to the point where you are LOSING money... 

The OP's guy was not only not a customer but threatening him with a lawsuit...


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## MattK

ohiohomedoctor said:


> I need not exaggerate and didn't intend to come off high and mighty so if I did I'm sorry. I am just supporting my stance.
> 
> I have as much to learn as the next guy, I'm just sharing some of what I have gathered so far.
> 
> Btw, today is my 30th b day so I'm a little depressed about loosing my 20's and entering middle age so if I am coming across a little tudey again I'm sorry..


No sweat Doctor...you're not on trial here! If your operation works for you that's all that matters. Guys on here can't possibly have all the details without shadowing you in the office and on site to see every little detail and change about the way you run your business. If you're doing 500k in sales annually and on 6 out of 30 jobs you lose a few hundred bucks, but those 6 lead to 180k worth of work next year...well most on here would say that was a win! Without all the info, everyone is speculating and probably comparing losing money to THEIR own situations and how it would affect them if it happened. 

Happy Birthday man!:thumbsup:


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## EthanB

ohiohomedoctor said:


> Btw, today is my 30th b day so I'm a little depressed about loosing my 20's and entering middle age so if I am coming across a little tudey again I'm sorry..


If I understand Inner10's earlier post correctly Matt, you aren't losing your 20's because you still have them but you are gaining your thirties. So it looks like it's been a fairly profitable day for you.:jester:

Happy B-Day!


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## Unger.const

How did this post go from homeowner wants remodel upgrades and labor for free to who has the best O&P ratio to happy birthday (happy bday ohiohomedoc by the way)

Did anyone notice if elbud is still alive?

I think we are all glued to his story because on some level we've been in his shoes.


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## elbud433

I'm still here. Waiting to hear back from the homeowners bank. Their banker contacted me and left a message, asking me to call him back which I did however he was out of the office yesterday


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## KAP

elbud433 said:


> I'm still here. Waiting to hear back from the homeowners bank. Their banker contacted me and left a message, asking me to call him back which I did however he was out of the office yesterday


That's actually potentially good news for you...


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## elbud433

Good


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## Inner10

Unger.const said:


> How did this post go from homeowner wants remodel upgrades and labor for free to who has the best O&P ratio to happy birthday (happy bday ohiohomedoc by the way)
> 
> Did anyone notice if elbud is still alive?
> 
> I think we are all glued to his story because on some level we've been in his shoes.


Welcome to CT. :laughing:


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## Driftweed

Were just killing time as we wait on updates.

Happy birthday ohiohomedoctor. Btw you now have more than you did before (years old) so that counts as profit!


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## FrankSmith

Inner10 said:


> Obviously he could be making infinity more money than I do but my point stands, if you are loosing money on SEVERAL jobs a YEAR something has to change.
> 
> .


I just am not going to agree to this. Say I go $1,000 in the red on five jobs a year but come in $2,000 good on twenty jobs all using the same system of bidding. Whats the big deal. I just can't get myself to see how your side of this. It is the over health of my business that concerns me.


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## FrankSmith

KAP said:


> No-one said anything in a malicious way so I don't understand your angst here...


Probably true. I just don't think inner10 has enough information to justify telling homedoctor what areas of business he needs to work on. It came off to me like inner10 thought he could teach Donald Trump a thing about business because Trump has lost money on so many business ventures.


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## KAP

FrankSmith said:


> I just am not going to agree to this. Say I go $1,000 in the red on five jobs a year but come in $2,000 good on twenty jobs all using the same system of bidding. Whats the big deal. I just can't get myself to see how your side of this. It is the over health of my business that concerns me.


Oh, I don't know... $5K?... really? 

Frank, you can lose as much money on as many jobs as you want... you seem to regard it as part of doing business rather than something to be eliminated as part of doing business... I honestly don't understand that thinking... 

Got company reserves? Company Emergency Fund? Personal Emergency Fund? All loans paid off? Credit Cards? Retirement funded? Kids college fund taken care of, Etc...

Think about that $5K the next robbing Peter to pay Paul cycle you are in and consider whether you would be in it at all...

Whole industry's have sprung up on capital preservation and process improvement...

Following your line of thinking, what do I need an accountant for? I guess as long as I can show myself in the black at the end of the year, it's all good... of course, coulda' had more black... but, what's the big deal?...

Consider, if you are using the same system that makes you going to the red $5K on 25% of your jobs, there is an implementation problem or a system problem...

The scary thing is you think it's just $5K... it's actually more...


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## KAP

FrankSmith said:


> Probably true. I just don't think inner10 has enough information to justify telling homedoctor what areas of business he needs to work on.


If someone tells you they lose business several times a year and you don't, do you think you might has some insight? If someone doesn't want to hear ideas and/or solutions they are free to ignore..





FrankSmith said:


> It came off to me like inner10 thought he could teach Donald Trump a thing about business because Trump has lost money on so many business ventures.


I didn't get that impression, and honestly think that's an exaggeration, but I think even Donald Trump would tell you that he doesn't just look at losing money as the way to do business rather finding ways to avoid it...


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## FrankSmith

Why are you lumping your businesses budget and household budget together? 

We look at it different. If I cover all the cost for my jobs for a year. Cover all of my overhead including my salary and end up with my target profit or better then I met my goal. I may have gotten there in a manner that was a bit different then I planned. If I can do this year after year while hitting my goals for growth then my systems are working and I will thank my team for their success DESPITE the fact that some jobs look bad on paper.


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## KAP

FrankSmith said:


> Why are you lumping your businesses budget and household budget together?


I only listed them in context of "what's the big deal" over losing $5K...



FrankSmith said:


> We look at it different. If I cover all the cost for my jobs for a year. Cover all of my overhead including my salary and end up with my target profit or better then I met my goal. I may have gotten there in a manner that was a bit different then I planned. If I can do this year after year while hitting my goals for growth then my systems are working and I will thank my team for their success DESPITE the fact that some jobs look bad on paper.


Look bad on paper? They either are bad or they are not... You are making them "look good" and is an example of you making the numbers say what you want them to say by doing it the way you are stating...

Frank how do you hit your target you set at the beginning of the year using the same system for all your others sales when you are losing money on 25% of the jobs? 

What you are not seeing is that the $1K LOSS is not only $1K, but $1k PLUS the gross profit you would have had on the job... 

So your other jobs have to make up not only the LOSS of $5K that was above and beyond your contract, but they ALSO have to make up the LOSS of gross profit...

How you make that up is of course to you, but the NET EFFECT is that it is still lost money because the actions you took to make up that LOSS could've been taken anyway to garner you an INCREASED PROFIT... and that's really the point...

So like I said, you are welcome to lose as much money on as many jobs as you want, but until you are at the point of learning to EXTRACT profit from your company, you will always look at the $5K loss as only a $5K loss and no big deal... when in reality, it is and creates a snowball effect until you get caught in a rob Peter to pay Paul cycle...

Example: (simple numbers using your sample numbers examples in an attempt to avoid confusion)

$10K job
$1K GROSS profit 
$1K LOSS above contract

That means you now have $2K to make up... the gross PROFIT and the LOSS... if you plan on hitting your profit target set at the beginning of the year, the $2K has to be made up somewhere else... EVEN IF you were able to get $1K more for the same $10K job (making it $11K), you would need TWO of them just to BREAK EVEN or find some other way (process improvement, working quicker to get job done, reducing material costs, etc.)... now if you had 5 other jobs where you lost the same $1K, how many jobs would you have to do to make the lost profit up just to break even?

Your job as a business owner is to protect the profit margin because this directly affects your business... and as we can see from the above simple example, that IS a big deal...


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## MCCarpentry

Happy birthday ohio! Frank, glad to hear you are meeting you're goals. 

Just read through this puppy, cant wait for the next episode. I would probably have to agree with having a lawyer handle this while you start putting in some extra sales and closing hours. But then again it may not even come to that. Just keep your cool and dont give up! Do you have a mediation clause? 
I was subbing my crew to a gc who ran into a few tough customers in a row. I learned from his problems and added a bunch of articles to my contract (im always thinking about ways to improve it). Biggest thing i got out of it was to be very specific!

Good luck!


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## FrankSmith

KAP, When you sell a job you put your markup on your cost. That job has the opportunity to pay for a set amount of your business expenses based on that. When the job goes over budget it still covers business expenses, just not the amount you planed it to. You have three opportunities to fix this. Increase your volume, lower your overhead, or maintain your volume and cover it with jobs that came in under budget. 

You can come in under on every job all year and if you never hit your target volume you still lost money. 

You can go over on every job all year and if you kill your volume you not only make money you make more money then you where going to originally. 

If the weather is obviously going to cause your crew to loose productivity on a job what do you do. They can work the job and it will only bring in $2,500 above the line when it was supposed to bring in $3,000. Do you allow them to bring in some money to cover operating expenses and keep volume up or do you wait tell the weather allows the job to operate when the weather clears. I will always choose to bring in some money to cover operating expenses on a given day rather then $0. I am not going to sell every job high to make sure the ones completed in bad weather come in good. It is okay if some jobs come in behind if the overhead and profit are paid for at the end of the year.


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## Inner10

FrankSmith said:


> I just am not going to agree to this. Say I go $1,000 in the red on five jobs a year but come in $2,000 good on twenty jobs all using the same system of bidding. Whats the big deal. I just can't get myself to see how your side of this. It is the over health of my business that concerns me.


Frank I don't care how you much money you lose. With that example I'd say your bidding system is far too rigid if you lose that often.

I lost money in my first couple years but since then I've only taken it in the shorts a couple times...like when an employee steps through the ceiling from the attic space. Or when a manufacturer screws me on a non warranty repair.

If you were an estimator and you screwed up that often you would be fired.


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## FrankSmith

Inner10 said:


> Frank I don't care how you much money you lose. With that example I'd say your bidding system is far too rigid if you lose that often.
> 
> I lost money in my first couple years but since then I've only taken it in the shorts a couple times...like when an employee steps through the ceiling from the attic space. Or when a manufacturer screws me on a non warranty repair.
> 
> If you were an estimator and you screwed up that often you would be fired.


Even if the only variable is the weather?


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## Inner10

FrankSmith said:


> Even if the only variable is the weather?


Why you made out of sugar?


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## FrankSmith

Now we are getting to the bottom of it. We disagree on how big of an impact jobs that loose money have on our businesses because I am made of sugar. Because I am made of sugar I get sticky and melt in the rain and don't get very much work done. My crew can no longer produce because they are so busy laughing at my sticky self and I have to rob Peter to pay Paul every time this happens. Thanks for the help. 

http://www.windycitynovelties.com/2...e&adtype=pla&gclid=CJLQtOSL2rYCFSJlMgodHykAZA

I will order one of these and all should be good.


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## Inner10

FrankSmith said:


> Now we are getting to the bottom of it. We disagree on how big of an impact jobs that loose money have on our businesses because I am made of sugar. Because I am made of sugar I get sticky and melt in the rain and don't get very much work done. My crew can no longer produce because they are so busy laughing at my sticky self and I have to rob Peter to pay Paul every time this happens. Thanks for the help.
> 
> http://www.windycitynovelties.com/240027p/umbrella-hat.html?utm_medium=shoppingengine&utm_source=googlebase&adtype=pla&gclid=CJLQtOSL2rYCFSJlMgodHykAZA
> 
> I will order one of these and all should be good.


Should keep them in the truck for any employee that complains about working in the rain.


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## MTN REMODEL LLC

MCCarpentry said:


> Happy birthday ohio! Frank, glad to hear you are meeting you're goals.
> 
> Just read through this puppy, cant wait for the next episode. I would probably have to agree with having a lawyer handle this while you start putting in some extra sales and closing hours. But then again it may not even come to that. Just keep your cool and dont give up! Do you have a mediation clause?
> I was subbing my crew to a gc who ran into a few tough customers in a row. I learned from his problems and added a bunch of articles to my contract (im always thinking about ways to improve it). Biggest thing i got out of it was to be very specific!
> 
> Good luck!


Didn't McCarpentry really hit the OP's issue here. His Contract... First it seems it should be his contract (assuming he doesn't have the experience to evaluate someone else's contract).

He needs specifity in the contract and a factor for "unknowns". If he is weak in estimating, or the job is expected to be complex/indeterminate, maybe he should not do firm-price and only do CM for awhile.

He needs someone to build him a decent/fair contract... apparently he does not have one.

Without getting into CPA accounting nomenclature, there are times to take a loss on a job... viewed as either a reduction in his hourly rate or his contribution to company overhead/profit.

If he has no better opportunity at present, then any wages or any contribution to overhead/profit is beneficial. Assuming he has some fixed overhead, a technical loss on one job can minimize his company's hard loss by contributing to his fixed costs (personel that can't be laid off, a backhoe lease etc)

I suppose that there are sometimes an absolute loss (materials and subs exceeding the contract price) might/could be beneficial, or necessary, (maybe when it is tied to a subsequent profitable job.)

However, isn't the OP's issue really focused around developing a good standard contract that fits his and the jobs circumstances.??


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## ubcguy89

if you lost it paying your subs hourly then you need to get your foreman or yourself to learn how to push guys


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## MTN REMODEL LLC

ubcguy89 said:


> if you lost it paying your subs hourly then you need to get your foreman or yourself to learn how to push guys


...or you miss bid/contracted the job.... everyone else can't always make up for your own mistakes


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