In our role as a supplier, we get a view into several thousand of our customers’ businesses. We have the privilege of seeing what works—and the lessons of what doesn’t. Please be careful: in times of political and economic uncertainty, the pieces of our jobs don’t always fit together as easily as we’d like. It’s only human to want to relax our grip on the wheel and sit back. Just don’t let go altogether.
In his lumber market article in this issue, Paul Rogers talks about the origin of the word contractor. A contractor is one who works by contract—an agreement (preferably written) between client and contractor—so contracts have been a cornerstone of our industry since its inception. Handshakes are nice, but contracts are better.
Your job is to keep your business on solid footing. The number one area where we see avoidable problems is with poorly written—or never written—contracts. Too often, what wasn’t clearly spelled out at the beginning of a job becomes what derails the job later and leads to an unhappy ending. When a job goes bad, the vast majority of the time it’s due to mismatched expectations between builder and client.
Let’s face it: to some extent, we all hear what we want to hear. Spelling out the scope of work, completion date, job cost, payment terms, and change orders is essential to a successful job. Remember, we do this every day—a homeowner, on average, only undertakes a building project every 7.2 years (according to the National Association of Home Builders). To them, it can feel like a foreign language. Just because someone is nodding "yes" doesn’t mean they understand or agree. They might be overwhelmed, worried about budget, or too embarrassed to admit they’re confused. These are all elements of human nature—and it’s our job to prevent the disconnect.
After all, as W. Edwards Deming, the famous management and production consultant, said: “We get what we inspect, not what we expect.”
Think of setting expectations as one of the most important tools in your kit. Your contract is the framework for everything that follows. It’s what keeps the job on track—and ultimately, what helps ensure you get paid. If you track and document job progress with change orders and credits, you leave much less up to interpretation.
If you ever end up in court without a proper contract, it becomes your word against your client’s—and as the professional, more is expected of you. Worse yet, a judge might view the absence of a clear contract as a deliberate attempt to mislead a “poor, innocent” homeowner.
A solid contract removes excuses not to pay. Set yourself up for success and make sure you’re compensated for the work you do. You work too hard not to! Use your contract to protect both yourself and your customer. And if someone refuses to sign one? That’s your warning sign. With a proper signed contract, you also have the ability to protect your interests by filing a lien, if necessary.
Here’s an image to remember: we often reference the story of parachute packing to drive this point home. In the military, parachute packers are sometimes told to grab a chute off the line and jump with it—without knowing if it’s one they packed themselves or not. Either way, it better work. That’s how strong their quality control and procedures must be.
So ask yourself: how good is your contract? You want to make sure it works when you need it.
Take the advice of comedian Jonathan Winters, who once said: “I couldn’t wait for success, so I went ahead without it.” Don’t go ahead without your contract.