Why you can’t expect your Builder to pay you on time EVERY time, in full…

I’m sure this post will win me some enemies, but here goes.

The reason you can’t expect your builder to pay you on time EVERY time, in full, is because nobody in business, can expect to get paid on time EVERY time, in full.

It just isn’t a commercial reality.

And I’m not just talking about the construction industry here – unless you have a product that people pay for in advance (say for example, donuts) then there is a very real possibility that you won’t get paid on time, every single time, in full.

When I was about 10 years old my Dad took us on a holiday to North Queensland. It was the longest trip I’d ever been on by car. In some tiny country town along the way, while Dad was filling our tank with fuel, my Mum went inside to order coffees. Dad assumed my Mum paid for the fuel and vice versa. It wasn’t until we were 50km further down the road that my parents discovered that neither of them had paid.

Dad did the craziest U-turn on the Bruce Highway and we went back to pay before the fuel station owner called the cops.

That nice guy at the fuel station that day didn’t get paid on time that day.  

Nobody was a criminal.

“Oopsie daisies” happen.

But when it comes to commercial transactions, I would argue that we should be a little more prepared for things to go wrong.

In a business to consumer transaction there is typically only one or a handful of people to worry about.

Business to business is a whole other league.

If you’re a subcontractor and you’re reading this, at some point something inspired you to start a trade business.  Maybe you felt you had something special to share with the world, maybe you saw a commercial opportunity.

Whatever the case may be, you’re risking the biscuit to make the big league, and there’s a price to pay if you don’t cover your bum.

Subbies by and large despise the thought of paperwork. In fact, a lot of you approach it as if it is something someone else is making you do, as opposed to something that can support your business and help you realise your profits.

If you have a systematic approach to all key aspects of your business, you don’t have to mentally keep track of all of the pieces of the puzzle.  

An absolutely essential element of a subbies’ admin system should be an accounts receivable escalation procedure.

It doesn’t have to be the size of the yellow pages, in fact, the more visual you can make it the better. I recommend an over arching flowchart with a more detailed explanation for each step in the flowchart.

More information about this has been discussed in one of my many webinars. To check them out, head over to our website www.tricksofyourtrade.com.au and check out our Webinar Gallery. You’ll find what you’re looking for there.