When to Say No to Projects for Your Contracting Business

In an industry that is dictated largely by season and often unpredictable, it’s hard to imagine a time when you’d ever want to decline bidding on a project. However, there are cases when you might get in over your head on a project that has major flaws. When you’re first starting out, you don’t want to be too selective in the kind of work you’ll do related to your business. But there are definitely a handful of red flags you should watch for so you know when to pass. Here’s what they are, and how you can decline projects professionally.

Client Doesn’t Know What They Want
Sometimes, you may get a client who could be good, but they’re too far up the sales funnel. Many people start reaching out to contractors before they have a fully-developed sense of what they want from the project. This can be a problem if you try to push them to commit to details too early. They may decide that they want something smaller, or fail to have the budget necessary for the project they have in mind. Instead, give them a few resources they can use to ideate and get a sense for the total cost, as well as your contact information.

Client Won’t Commit to a Bid or Estimate
There’s a reason everyone in business recommends getting the details in writing. Without them, it’s just your word against your client’s. Clients who push away the idea of a signed contract in favor of a verbal conversation can create big issues for the project. They may fail to understand the details and therefore underestimate costs. They may deliberately confuse the issue in an attempt to get you to do more work than you agreed to do. They could even expect you to change the project halfway through. Make it a regular process to get a signed contract before you start doing any work.

You’re Unsure if the Client Can Pay
Making sure the client can pay applies to big and small projects. When you’re working with property owners who have little experience in construction, get a firm number on their budget before you start planning. If your bid is coming near the top, make sure you put enough in your estimate to cover all costs. Clients may not be able to pay more than their listed budget, and you might have to fight to get what’s owed. For larger projects, ask for evidence that they have the funds to pay you at the right times. If they can’t, tell them that you’ll be willing to start work once they can prove they have funds in place.

Client Asks for Unreasonable or Illegal Terms
There’s a difference between making a stretch to meet the client’s terms and completely blowing away all your boundaries. You want to set a clear threshold between these two so you don’t end up in a situation you can’t manage. Some clients want a rush job that simply can’t be done in the time allotted. Others may ask you to skip getting permits or other required items to save money or time. These requests are not just unrealistic–they also put you at risk. Explain that your processes include adherence to local guidelines, and that you can’t change them without risking liability.

Trust Your Gut Instincts
When you’re trying to get established or you’re stuck in the middle of a slow season, it’s tempting to take any work for the sake of income. But there are instances in which the work is going to cost you more in effort and frustration than the benefit of payment. If the red flags are piling up and every instinct tells you to decline, it’s often best to respect it. Sticking to reasonable business operations will help preserve your abilities for the next project.

Running your own contracting business involves learning when to take new projects, and when to let them go. It begins with a solid grounding in the rules and standards of the construction industry. To start your education, visit CSLS today!

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