Keep Your Integrity!

Roger's Rules for Contractors

When I first got into this business, my focus was on solving the problems of the people that called. I would say, “No problem,” and get it fixed ASAP.

But as time went on and I became very busy, I began to try to get them to wait on me by getting them to sympathize with my problems in getting there in a timely fashion.  I talked about too many of the things going on in my life that were negative.

As I was talking one day, I could tell by the man’s face that he really did not want to hear all that.  As I thought about what I was doing, I realized that my focus had dramatically changed from being a problem solver to being a problem teller.

People are looking for problem solvers.  They’re not concerned with your problems. They just want their problems fixed. If you have too many problems, they will find somebody who doesn’t have so many.

So that’s how Rule #6 came about.

Rule#6 Don’t tell people about your problems!

Your business will do better!

Rule# 12 Never work for just one company or client.

My boys were in Boy Scouts several years ago and the Scout Master at the time was an attorney.  He had worked for the same company for about 20 years and had no private practice.  He had a nice home, a son in college, but when the oil company made some cuts, he was out of a job.  Since he had never developed a private practice, he was in bad shape.  He finally went to work for another attorney in the troop that had his own law firm.

It is never good as a contractor to only work for one company or client.  They can really put your feet to the fire at times to get lower prices, their own houses done cheaply or their jobs done for free.

I worked for an acquaintance one time that had just had a new home built by a large builder.  She told me that all the contractors on her home told her that they had just built their foreman a new home with free labor.  They either did his home for free or found another job.  What could they do?  He was their only client.

I have been offered large jobs in the past that may take a year or so.  First, they want it done at a cheaper price because of the volume of the work and the job security it offers.  Then they want to be your only client.  I have always turned those deals down.  What happens at the end of the work?  I would have no business left to go back to.  All my clients will have found other contractors, and I will have to start from scratch building a business.

They may decide in six months they want the price even cheaper.  They have you over a barrel.  They are your only source of income.

What if they decide in six months that Bob can do it even cheaper?  They will drop you in a heartbeat.

Trading your freedom of running your own business for the security of work every day is not worth the risk.

# 24  Don’t stir the pot.

This can cover many different areas.

I used to tell builders things that I saw wrong with their houses that might cause them trouble down the road.  I found they usually took that as criticism.  Now I will tell them if the house is on fire but that is about it.

I used to try to help people get their jobs done under the warranty they had.  That required many phone calls to set it up. I found that the some of the people I had to contact in order to accomplish this did not appreciate it.  As we could not turn in the warranty job ourselves, it required several calls to find out if the responsible entity had turned the job in for the people.  I quit stirring the warranty pot also.

Not stirring the pot is a good principle to live by in your work and in everyday life.  The more you ponder it and watch the better you will understand.

# 25 Keep how much you make to yourself.

This is a great rule.  Each business has its own list of expenses and financial duties and benefits that most outside that business will not understand.

Years ago my mother saw a milk check (proceeds from a dairy farm for the milk they sold that week) that came into my aunt’s books.  Mother said, “Boy, I would like to have that for a week.”  My aunt said, “It looks like a lot, but if you saw the bills I have to pay, it would not seem like very much.”

People will not understand how your business is set up and perhaps what all is involved in the price you set. So it is best to just keep what you make to yourself.

# 41 Keep Your Integrity.

Integrity is a most valuable asset you can have as a business person.  Integrity says you can be trusted:  trusted to tell the truth in situations – trusted to do what is right.

But integrity is often sacrificed on the altar of money.

I have a book that I look at often that has things I pray about in it.  At the top of the page is list of priorities for life that I learned from Jim Rohn (a self development speaker).  It is a very good way of ordering the priorities of your life.

  1. God
  2. Health
  3. Family
  4. Integrity
  5. Career

Many people put their career in the number one position.  That would have to do with the making of money.  If you do this, you will sacrifice your relationship with God, your health, your relationship with your family and your integrity for the sake of your career or in other words, money.

God should always come first.  Then should come the taking care of your health.  Without health you are no good to your family or your career.

Family should come next and always before your career.  Then comes your integrity.  If you sacrifice your integrity for the sake of your career, you may lose your career also.

You may be tempted to lie to benefit a builder or plumber, etc. But once they know you lie, can they ever really rely on your telling the truth in any other situation?  If they really need an honest assessment, they will have to ask someone else.  Because they know you cannot be trusted.

I have lost accounts and friends because I would not change the facts to benefit them.  But if that is what they required for them to be my friend or for me to keep their business, is that what I want to build my life on?  My answer is always the same. NO.   Keep your integrity. It is worth far more than money or position or more jobs.

I was analyzing a job for a hotel one time and told them what they should do.  One partner said to the other, “They told me you may not like what he tells you, but he will tell you the truth.” That is the reputation that you want.

In the long haul, having great integrity and being a person that can be trusted will pay great dividends. Always Keep Your Integrity.

  • Proverbs 14:24 The wise accumulate wisdom; fools get stupider by the day.  (The Message)
  • Proverbs 2:7 He layeth up sound wisdom for the righteous: he is a buckler to them that walk uprightly.

Accumulating rules that govern life are all part of The Prosperous Life.

The Accountant Has My Checkbook!

Roger's Rules #14 #38


Some people just won’t pay until you call them.  Some won’t pay until you call, email or fax several times. So in our business, my wife does the collecting.  (Home owners pay the day the work is done.)  If they have not paid in the time reasonable for their classification, she calls them on the phone and simply asks if they received the invoice. It is usually two weeks for builders, two weeks for plumbers, two months for manufacturers, and two months for wholesalers. Then be quiet and see what they say.  Sometimes it is amazing the excuses they give.

  • My secretary had it in her purse and forgot to mail it for two weeks.
  • The accountant has my check book.
  • We changed our fax number.
  • We changed our email address.
  • We never got that invoice.
  • We decided not to pay.
  • We sent it to the plumber.
  • The homeowner is supposed to pay, and we have not gotten the money yet.
  • I thought we already paid that.
  • And the best one: Plumber, “Well, my guy did that mistake so I am not paying.”  I said, “Well, he works for you!” Response, “Not anymore; he stole my pickup and ran off with my daughter, so I fired him.  If you want your money, talk to him.” (We got the money but it took many calls to the plumber and the builder. Sometimes it is like dealing with small children.  This was also an out of town job, and from then on out of town builders, plumbers and clients have to pay on the spot or we won’t do the work.  It is more difficult to collect on out of town jobs than local jobs.  Just tell the out of town client that it is nothing personal, but on out of town jobs we have to be met with a check or we cannot do the work. I sleep much better that way.  If there is one thing I hate in life, it is not getting paid.)

When my wife emails or faxes an invoice, she writes or types across the face of the invoice the date it was emailed or faxed.  So by the fifth time there are several dates.  (Faxed 2/03/2107; emailed 2/15/17; emailed……)

If she is not successful in collecting the money, she gives it to me.  I am not usually as polite as my wife.  I am successful most all of the time.  I have called some people over 100 times.

In the past, I know they do not answer if they see it is my number, so I will borrow other people’s phones and call.  I reach them eventually.

I called the last one three times before 10:00 AM.

  • The first time I called (7:15 AM) I told him we needed to get these invoices taken care of as they were two months old.
  • The second call I left no message since he will see it is my number.
  • The third call I simply asked him to call me.

He called 30 minutes later.  He apologized and asked how he could take care of it.  I said he could use a credit card, as I have an app on my phone.  In two minutes the bill was paid.  It is amazing how easily people will pay with a credit card.

You just have to accept the fact that confrontation is the name of the game if you want to get paid and your family deserves to have the money you worked for. We are not a charity nor are we donating our labor so others can have their projects done at a lower cost.

We have had this rule of Go Get the Money for 40 years.  It has worked out very well.  It takes some guts, and it uncomfortable, but the feeling of not being paid is sickening.  Thus rule #14:

# 14 Go get the money

In residential jobs where there is a homeowner, a simple way to avoid collections is to settle, up front, how you will be paid.  Ask them if they will be paying with a check or credit card. If they will not be there when the work is done, ask them if they can leave you a check as your company does not bill residential customers.  For instance, has the plumber ever offered to send you a bill in the mail?  No! You pay him on the spot.  You should expect the same.

Get a credit card app for your phone and offer to have them pay by credit card.  It will cost you 2-3.5 %, but that is a small price to pay for not having to call to collect later. We use the Intuit app Go Payment.  You may have to also use QuickBooks to get that app.  Square works also, but they are progressives and many politically incorrect things they do not allow to go through their app.

We have done some jobs where we are paid with a credit card when we are done by calling them on the phone.

# 38 Don’t allow people to make you feel guilty for collecting.

People are great manipulators.  Some will try to make you feel guilty for asking about your money.  Never feel guilty!  Those people are the ones you may want to put on the 20% list that cause you 80% of your grief. Lose them!

I stopped by a builder’s home many years ago on a Saturday morning and asked for a check. This was during a very depressed time in the housing market.  She said “Can you never wait?”  I said, “Hey, I was in the area.”  (I was in the area, TO COLLECT A CHECK!)  She paid, and I learned later that on the following Tuesday the bank turned her down for her last draw.  I was the last person to get paid 100% of their bill.  We made it by one day or less.  The rest of the contractors took 20 cents on the dollar two years later.  I believe God fights for me and gives me the boldness that is required to get paid at times.

The righteous are bold as a lion.  Bold but not rude.  Bold but not pushy or arrogant.

You did the work and deserve to be paid. If the agreement is to be paid the day you are done expect that to happen.

I have been on jobs where the homeowner was there every day all day long until Friday when it was apparent you would be finishing up. Then about 2:00 they are just gone. Now you are finished, and they are not to be found anywhere.

Check with them on the day the job is going to be completed. Ask, “Are you going to be here when I’m done so you can write me a check?”  If they mumble, rephrase what they just said. “Are you saying that you’ll be here this afternoon to give me a check when I’m done?”

The practice of rephrasing works for a good many things to set in stone what was agreed upon.

If they won’t be there, explain you need to be paid before you leave so could they write it just before they go.  Once people give their word many times it changes the situation and they do the right thing.

At many junctions asking whether they want to pay with a check or a credit card is much better than just asking for a check.  “Do you want to pay with a check or a credit card before you leave?” Done properly they will answer with one or the other.  It is a sales technique that works well to close a conversation.

Collecting money is one of the most uncomfortable things about being a contractor.  Sometimes collecting your money involves confrontation, and confrontation is something that most people avoid like the plague.

If you don’t GO GET THE MONEY, it is not fair to you. You did the work. AND it is not fair to your family.  You are working and spending time away from the ones you love and care for — and not getting paid?  NO.  If that has been you in the past on some accounts, you need to change that immediately. So you have to do some thinking about how to so set up your relationship with your customers so that you get paid 999.99% of the time.

Learning how to get paid on every job is an art, and it is all part of The Prosperous Life.

Go Get The Money Part 2!

Roger's Rules for Contractors

Many years ago I was involved in a large job with an interior designer.  She told me up front that she would be paying for the labor of what I was doing. It was quite a large job and I was there for a while.  In talking to the other contractors, I found that this designer was footing the bill for the entire remodel herself with no upfront money from the homeowner. She paid for the remodeling, the carpet, the wallpaper, and all other materials.  All the labor for the trades was going to be paid by her once the job was completed and she got paid.

In talking to the homeowner I learned that he was a workman’s comp attorney.  From what I know of these type of attorneys, all they do is sue people and they are the most likely of all to not pay once the job is complete.

This job was making me nervous, so when I was done, I talked the decorator into letting me bill the homeowner myself.  She finally agreed.  Then I spoke with the attorney.  He said all bills were to go through the decorator.  I told him that yes that was true but that she had told me I could bill him directly myself.  He finally agreed, and I went that night and picked up a check from him. When the job was finally done, the decorator and the attorney had a falling out over the bill and I don’t know if she ever got paid.

She should have required the homeowner to pay one-half of the price of the materials upfront before ordering.  With her markup that should have covered 100% of her cost.  Then the other half should have been paid on delivery – on delivery not installation. As she was making no money off the labor, she should have had the homeowner pay for the labor from each contractor on completion of their work.

Dividing large jobs into small bite size chunks for payment will prevent many problems with collections.

That is where # 44 came from.

# 44 Don’t work for lawyers.

Some lawyers only pay by lawsuits. This week I spoke to a painter that had been burned by a lawyer recently. When you find out it’s a lawyer, bid the job too high or tell them you just don’t have the time at the moment to do the work and let that job slide — even if you are not busy.  Busy without getting paid is a sickening feeling.  Better to go fishing and pray than to deal with the stress of being stiffed.

#45 Ask who is paying for the job.

We ask up front, “Are you paying for this or is someone else?”  By asking this question, I have heard, “I am not paying; this is a new house. The builder, plumber or manufacturer is paying.” Ask for the phone number of the person they said was paying and verify.  I have had several times where the builder said, “I gave them your number to do the work but I am not paying.”

I forgot to ask on one job a few years ago.  In order to have access to the malfunctioning parts, we had the builder take the brick off the outside of the house and then take the sheeting and insulation out.  In the process of repairing the unit, I found out from the wife that the unit had no warranty. I stopped working and called the builder to see if he was paying.  “NO!”  He said the plumber was.  I called the plumber and he said, “NO! I thought I bought a good unit and that the wholesaler was paying.”  Well, the wholesaler said that the manufacturer’s warranty was up two years earlier, and there was no way they were going to pay.

So I leaned a piece of plywood over the hole, called the builder and told him they needed to figure out who was paying since there was no warranty and call me back. Two weeks later the plumber called and said he was paying because the builder threatened to fire him if the plumber did not pay to fix the unit.  (Personally, I would have told the builder to stuff it if I had been the plumber, but a lot people don’t stand up for themselves.)

If I had finished the work then found that out that no one was paying, it would have been very hard to collect. Don’t get caught in that trap.  Always discuss the money issue up front.  Most people have no problem with discussing payments up front.  The people that do have a problem with it are the ones you want to watch.

I have also found that if you are willing and open to discuss the payment issue up front, they have more respect for you and getting paid becomes a far smaller problem than it might have been.  They see and respect your confidence, and may decide to ply their non-payment craft on someone else.

It is always uncomfortable, but the feelings of not getting paid are far worse.

# 22 Tell people up front what the cost is going to be.

This way there are no surprises for them. And they can’t come back with mock surprise at the cost to make you feel bad and reduce the price after the job is finished.  It may be uncomfortable talking about money before the job is started, but if you want to eliminate collection problems, you have to do it.

# 33 We get paid on completion of a commercial job.

Many years ago I was working late one night in a mall and talking to the carpet layer and the subject of getting paid came up.  He said he was getting a check that night when he was done. “How did you do that?” I asked.  He had told them that was the only way he would do the job.  WOW!  I never forgot that.

It took us four months to get paid by that Wisconsin company.

As we started to do more commercial jobs in the business we are in now, I incorporated the same idea.

I tell them up front we can do the job, but we need to be paid the day we are done.  Can they write me a check?  Many times writing a check is difficult for them to do, so I tell them a credit card will work.  I tell them to talk to their boss and let me know.  Many commercial jobs have company credit cards on site. I have never been turned down.

The problem with billing on commercial jobs is that most of the time their offices are out of state.  I have been told, “Well, I send the invoice to Arkansas and the job super signs off on it, then it goes to accounting in Alabama, then the Partner in New York has to review it and write the check but the checks are sent from California, and there is no way for me to tell you what part of the process your invoice is in.”

Meanwhile, the contractor has finished the job and left the state.  The foreman I talked to has changed jobs and works for someone else.  Sometimes you are left with no one to contact and no phone numbers.

I would rather lose the job than go through that to collect the money.

We do the same on any out of town job.  They pay while we are there or we don’t go.  We settle that issue up front.  I tell them all “It is nothing personal, it is just the best way we have found to not have to spend our time chasing money.”  Most understand and will arrange it for you.

Also, I have had local entities where the bills are paid from some out of state company.  We ask them to have a check sent to the local company, and then they give it to us on completion of the job. You just have to have the attitude that I do not want to chase that money down.

This works for small companies with small bills.  If you are a larger contractor, you have to find ways to take care of the problem. Every business will have a way to collect in a timely manner.

Once you adopt the attitude that you will get paid, you will find that you get paid much more often. Even if the amount is small, it is the principle of the thing. You deserve to be paid, so don’t give up.  Be a thorn in their side until they take care of the bill.

One contractor I talked to sends them a final letter stating that they will be turned over to a collection agency in seven days if the bill is not paid.  He states that the collection agency’s fee will be attached to the bill and they may notify the credit bureaus.

Another method I have seen involves a set of letters on this web site:  http://stevensricci.com/collection-letters/.

However you deal with collecting, remember, you deserve to be paid.  Ignore the negative things that people will say and just stick to your course.  You will become less uncomfortable with talking about the money up front over time.  Remember, your family deserves your best effort.

Whatever you do will become a habit.  If you develop the habit of allowing people to not pay, you will lose thousands of dollars that you worked for over your life time.

The first thing I ALWAYS do if my wife gives me an account to collect is pray and ask God to help me resolve the issue.  I firmly believe that God has saved my A** many times over the years where otherwise I would have gone away with an empty sack. Ask me about them sometime, and I will tell you those stories, too.

The righteous are bold as a lion.

Not hateful or arrogant just purposeful and bold.  A mind set like a rock.

The longer you are willing to wait to get paid, the longer they will take to pay!

Learning to stick up for yourself and being bold is all part of The Prosperous Life.