Contracts?

[Menchhofer]

Do not know if this has been discussed here before but does everyone have a signed contract before beginning work?

 

[TREETX]

Sometimes - depends if cya is needed.

A contract is good though - I just hate treating my clients like I am locking them into something. I try to give them a written proposal so the scope is clear. The demand for a signature is not needed. Unless you have a lawyer draw up your contract and supervise its signing, it is probably not worth the paper it is on.

If you have sneaky, slimy customers where you think you need a contract, find new customers - I do. The thousands you spend on defending a contract negate it's necessity.

I would say $5K+, contract - other than that, it is a waste of emotions.

Get on the same page BEFORE the job and the need to CYA after the job is much smaller.

Nate .02

 

[TREETX]

I could see wanting a faux contract and a minimal ($50) deposit to lock clients in. I have had the problem and know of others where you sell a lot of work, make a calendar, put the client on for 2 weeks out just to show up and find they had another company do the work.

I am not exactly setting the world on fire here, I have a 1.5 - 2 week lead time now so I am usually that other guy who does the work, gets paid, and then winks at the other company when they show up to do the work as I am putting my blower back in the truck.

 

[Stumper]

I guess some of the attitudes about written contracts are regional. I have had signed contracts with people a couple of times (at the customer's request). Frankly it made me a little nervous working for someone so untrusting-I wondered about THEIR honesty. From a legal standpoint a verbal (parole) contract is just as binding as a written one. The catch lies in proving the verbal one.
I do usually submit a written bid but not a detailed one.(Written on the back of my business card. Something like: Remove Sm Maple and grind stump $150, Prune Ash in front $85 ,Includes clean up. and sign it.) Personally I am glad that things don't need to be any more complicated. If people start demanding sighned paperwork in triplicate for small jobs the costs are going to shoot up. I do explain what sort of pruning is being discussed etc. when I submit the bid. I have very few misunderstandings.

 

[Ryan Willock]

In chapel hill I won't work without a signed contract, on top of that I require a 20% deposite and the balance paid within 10 working days of completion. And no I have not had so much as ONE person refuse to sign!!!

 

[kf_tree]

20% deposit? how do you justify it?

there is no way that would fly up north.....too many guys would take the deposit and never show up to do the work. it's not like you need to lay out money for materials to do the job. i could see a roofer, painter etc asking for a deposit since they need to purchase materials to start the job. but what does a tree man need to start a job other than fuel for the trucks and saws?

 

[WillClimb]

I write a proposal, have it signed, and I require a 50% deposit prior to starting any job. I read in TCI that you should do this, and it has saved my butt a couple of times. I have been burned in the past before I started having proposals signed.
I have never had a problem with the proposals. In fact, customers seem happy to do it. As if they respect you a little more. And the cash flow is a lot better. If the job goes a couple of extra days, due to weather or who knows what, well at least you've got 1/2 the bills in the bank.

Tree work usually costs a pretty penny. We use some of the coolest tools out there, and they're not cheap! Most of us have some serious $ tied up in this business. Chip truck, chipper, saws, ropes, saddles, spikes, stump grinders, etc. Not to mention that our work is inherently dangerous. So, our service is expensive. When someone buys anything from Sears for over $1K (and usually less than that), you better bet they'll be signing some contracts.

Now, my 1/2 down policy doesn't seem to work so well with contractors. But you no what? They've been the biggest pain in the rump for me since I can remember! I do fine with strictly residential. So, unless someone can tell me why I should put out a $1000 to rent equip., pay employees, gas, oil, and the works...and then wait a month to get any money, I'll stick with my current plan. Speaking of which, I plan to start a thread soon about contractors!

I'll have to agree 100% though...if a customer is the slightest bit slimy, lose 'em. You're just asking for a conflict, you'll probably lose them anyway, and then they'll be telling rumors about you.

Sorry about getting on the soapbox but y'all struck a chord here.

 

[John Paul Sanborn]

I beleive in a small amount of "ernest money" for large scheduled jobs.

Any contract I have signed, i will inform them that it is non binding until we show up to work. I expalain it as ensuring that we are all on the same page and each will have a copy of the description of work.

For large deatialed jobs I have typed up detailed descriptions with maps.

One of my favorite clauses is " the work shall not exceed the above list, additions to the above listed work may be negotiated before or during the work period and added in writing" when i feel that the customer will be the type to drag worker around the yard to "get just a few more while you're here".

I've met guys who have work stoppage clauses in the contracts, so that if they show and it is done, a car cannot be moved or any reason they cannot perform the work, they can demand a fee for showing.

If you take ernest mioney, you must have an escrow account, by law you cannot comingle these monies with fees paid for work done.

The same with taking a seasons lump sum payment for doing lawn or spray work accounts. You escrow the prepayment then remove it from escrow as the work gets completed.

 

[kf_tree]

"unless someone can tell me why I should put out a $1000 to rent equip., pay employees, gas, oil, and the works...and then wait a month to get any money,"


what equipment do you need to rent? other than the occasional crane job. seems to me a reputable tree svc should own all their own equipment.

my view is if the company can't afford to carry payroll and expense's a bit then their a fly by night company. there is no way management companies, insurance co, schools, etc will pay 50% up front. so what if you have to wait 30 or 60 days for the check to come in, it's money in the bank. your residental work will carry you through. it's nice knowing those checks are coming in. plan on them to buy new equipment.

i know this seems like i'm attacking you but i just disagree with your game plan big time. what ever works for ya i guess. but i would never pay a tree svc 50% before the job was even started. if you can't afford to show up with equipment and crew and get paid upon completion then you got a problem in my eyes and i'd look elsewhere.

if i came to you for a job interview and things sounded good and you hired me. then i said well i need half a weeks pay up front or i can't show up in the morning. what would your answer be?

 

[John Paul Sanborn]

I agree with 50% being a bit steep, but earnest money is good to keep people who shop around from getting 3 companies signed on to see which will show first.

If they call and cancel then they shoudl get the money back, but if you show and it is done, then you keep it to cover the travel times.

Just enought to lock them into the sale, one i just did that way was storm damamge that I left a rope in as a temporary cable. We shuffled the schedule, ran the lead on tue, did the job on Fri. 1150 for the tree and stump, under 5 hours to get it down and bucked, 3 men, and another 2 or so for 2 guys to haul wood.

Got $100 down to schedule it ASAP.

 

[Menchhofer]

From my experience, people want a written description of what is to be done. They want and expect to sign a document. It ads to your credibility as a professional.

I write down every detail so I will be able to remember EXACTLY what to do and so the client sees what will actually be done.


I also live by the rule I have made to myself...ALWAYS DO MORE THAN EXPECTED. By this I mean if it takes removing a few extra small limbs higher up in the tree not mentioned in the contract to clear the roof or service lines for a longer period of time...I do it. Clean up, we get EVERY leaf.

Sometimes it takes additional time removing deadwood in an oak to really make it look good. People do appreciate it.

However, if the customer (or neighbor) wants additional work involving more a just a few minutes work, I will and do charge extra. They normally expect to pay for the additional work.

I used to believe contracts were not necessary ( only for people who did not trust each other) but it only takes a couple times of being jacked around and screwed out of a few hundred dollars of hard earned money before learning the importance of a written agreement.

 

[Stumper]

I find it interesting that (apparently) Willclimb gets 50% down but then will wait 30-60 days for the balance. I want nothing down (rarely, I do if I have to purchase a bunch of trees for planting or something similar) but I want MY money, ALL of MY money upon completion.

 

[John Paul Sanborn]

Often it is not willfull on the clients part, it is just poor comunication on ours. We did not make sure they understood what we wer saying. Anyone who has done the work for a few years has had a few who get upset on a prune when they cannot see much has been done.

 

[NickfromWI]

Contracts

One thing that bothers me is when the boss sends me out with a bill that says, "Trim one tree, $100.00." I get there and I prune the thing, then we get sent back because something like, they were planning to put in a basketball hoop and the branches are in the way. The contract can be a good thing for the workers, too. But also, so could good ol' communication!

There's nothing better than a good written work-order.

love
nick

 

[WillClimb]

kf_tree:
no attack taken. I'd like to ask one thing, though: do you own your own company? Are you working for another company? My present equipment is: 1 Ford F700 chip truck, 1 Bandit 200+ XP Chipper, 1 Fert Rig, John Deere tractor with trailer, 3 saddles, scads of ropes, rigging equipment, 'biners, saws, etc. No stump grinder (I currently rent), no lifts (I currently rent), no cranes (I currently rent/hire). My wife stays home with daughter and this business totally pays the bills, which includes Gen. Liability ($1,000,000), commercial vehicle insurance, property insurance on equipment, and licenses.

Do you feel that I am undercapitalized? Should I have gotten a huge loan and purchased more large equipment and then kill myself paying it back? Or do you think playing it slow is the smarter move?

Every thing that I have done as far as policy, has been at the suggestion of my CPA and from our industry magazine, TCI. I get the 50% deposit only on my arrival at the job. Not days or weeks before, except at a client's request due to a scheduling conflict. And I agree, 50% sounded steep to me, but I trust my sources and have liked the results.

 

[NickfromWI]

Willclimb-
I think you got it right. It might sound wierd to others, but the answer is easy. You've found something that works well for you. If in the future, you find that you're losing job, this might be one thing to look at, but until then, you might be on to something!

Everywhere in the country, and each neighborhood in each city has different levels of tolerance/acceptance for certain things. You seem to be not pushing those levels, so there's no reason to change, right?

love
nick

 

[WillClimb]

Nick,
That's the way I see it. Always assess the current state of the company and make changes accordingly.
I appreciate yours, and everyone's, input.

 

[WillClimb]

Stumper,
My fault for the misunderstanding. I am saying that I will not wait 30-60 for the payment. That's why I am very apprehensive to do work for most contractors. They have been some of the most sketchy and verbally abusive characters that I've ever dealt with.
Attorneys are tricky to work for as well. I will usually try working with an uncertain client once, and if my my apprehensions seem to be justified, then I cut the ties.

Will Allen

 

[Ryan Willock]

I get my 20% AT the signing of the contract, BEFORE the work is scheduled!!!

 

[John Paul Sanborn]

Brian, that is what ernest money is, a jesture of the customer to the contractor to show they are commited to working with them.

It is a well accepted buisness practice; make an offer on a home, car or even sofa, you put money down. It also can be used by the client to ensure timely arrival of the the contractor. The contract is deliverd to the customer and the initial payment is delivered to the contractor. Delivery is a legal term that locks in the agreement in contract law, after that you may need lawyers to exit the agrreement.

After a relationship is built and the customer becomes a client, then it is acceptable to forgo the use of ernest money. It is all about how you sell the action, "I ask for $100 down to show that you want to work with me, and I will guarentee completion in X number of days, weather permitting."

Of course the best selling tool is showing up for the estimate ASAP and actually talking to the prospective client.