📨 Contractor’s Digest – Daily Rundown (March 21, 2025)

📨 Contractor’s Digest – Daily Rundown

📅 Friday, March 21, 2025
🛠 Helping Contractors Win More Jobs, Increase Profits & Avoid Costly Mistakes

🚧 Today’s Rundown

🔹 The Hidden Costs of Hiring the Wrong Subcontractor
🔹 Business Tip: How to Protect Your Business From Payment Disputes
🔹 Tool Spotlight: Best Jobsite Speaker for 2025

🏗️ Feature Story: The Hidden Costs of Hiring the Wrong Subcontractor

📉 What’s Happening?
A bad subcontractor doesn’t just slow down your project—they can damage your reputation, drain your profits, and even cause legal issues.

📌 The True Cost of a Bad Sub:
✔️ Delays & Rework – Missed deadlines lead to penalties, overtime costs, and lost future business.
✔️ Legal & Compliance Issues – A sub who cuts corners can leave you liable for safety violations or warranty claims.
✔️ Payment Nightmares – If a sub walks off the job or does shoddy work, you might still be on the hook for payment.

📌 How to Protect Yourself:
✅ Use detailed contracts – Define scope, deadlines, and quality expectations.
✅ Vet your subs thoroughly – Check references, past projects, and licensing before hiring.
✅ Hold retention payments – Don’t pay in full until the work is inspected and approved.

🚀 Pro Tip: A cheap sub can cost you more in the long run. Always balance price with reliability, reputation, and quality.

 📌 Business Tip: How to Protect Your Business From Payment Disputes

One of the most significant risks for contractors is not getting paid on time—or at all. Whether it’s a slow-paying client, a project that goes over budget, or a dispute over work quality, payment issues can cripple your cash flow and put your business at risk.O

The best way to protect yourself is to lock down your contracts, payment structure, and legal options before you pick up a tool.

📉 The Problem: Why Contractors Lose Money on Payment Disputes

🚩 No Written Agreement – A handshake deal may feel like a sign of trust, but in a legal dispute, if it’s not in writing, it doesn’t exist.

🚩 Unclear Payment Terms – Clients will take advantage if your contract doesn’t define payment schedules, deadlines, and late fees.

🚩 Client Stalling or Changing Scope – Some clients delay payments by claiming work isn’t complete or demanding extra work before paying what they owe.

🚩 No Legal Recourse – Without a lien right or structured payment agreement, a contractor may end up eating costs for labor, materials, and overhead.

🚀 The Fix? A Strong Contract, Clear Payment Terms & Legal Protections.

✅ The 3-Step Solution to Avoid Payment Disputes

1️⃣ Get Every Agreement in Writing—No Handshake Deals

📌 Why It Matters:

💡 How to Implement:
✔️ Include specific deliverables and payment milestones.
✔️ State who is responsible for materials, permits, and unforeseen costs.
✔️ Require signatures before starting any work.

🚀 Pro Tip: If a client hesitates to sign a contract, that’s a red flag—they might try to avoid paying later.

2️⃣ Set Clear Payment Terms—Include Progress Payments & Late Fees

📌 Why It Matters:

💡 How to Implement:
✔️ Require a deposit upfront (typically 20-50% of total job cost).
✔️ Set milestone-based progress payments (e.g., 30% after framing, 30% after drywall, balance due upon completion).
✔️ Include a late payment clause (e.g., "Invoices not paid within 10 days will incur a 5% late fee per month.").

🚀 Pro Tip: For larger projects, consider offering early payment discounts (e.g., 2% off if paid within 7 days). Clients love savings, and you get paid faster.

3️⃣ File Preliminary Liens on Larger Jobs—It Gives You Leverage if Clients Stall

📌 Why It Matters:

💡 How to Implement:
✔️ File a preliminary notice at the start of the project (varies by state).
✔️ If payment is delayed, send a formal notice of intent to file a lien before taking legal action.
✔️ Document all work (photos, receipts, client approvals) to support your claim.

🚀 Pro Tip: Liens work differently by state—know your local lien laws and file properly to keep your rights intact.

🚀 Bonus Tip: Require an Upfront Deposit to Avoid Financing the Project Out of Your Pocket

What is the biggest mistake many contractors make? Starting work without a deposit.

📌 Why It Matters:
✔️ A deposit secures client commitment and prevents them from walking away.
✔️ Covers initial labor & material costs, so you’re not financing the project.
✔️ Filters out clients who may not have the funds to pay in full.

💡 Industry Standard Deposits:
🔹 Small jobs: 25-50% upfront
🔹 Larger projects: 20% deposit + progress payments
🔹 Custom work: 50% deposit (especially if materials must be pre-ordered)

🚀 Pro Tip: If a client refuses to pay a deposit, they may refuse to pay the final invoice. Always secure funds before starting work.

📌 Take Action This Week

✅ Review your contracts—are your payment terms strong enough?
✅ Implement progress payments & deposits on all jobs.
✅ Research your state’s lien rights and file preliminary notices on high-value projects.
✅ Train your team to never start work without a signed contract & deposit.

📢 Bottom Line: Contractors who set clear payment rules, secure deposits, and use legal tools like liens get paid on time, in full, and without disputes.

Would you like a free payment contract template for your next job? 💰 Respond to this email, and I will send you one!

⚡ Tool Spotlight: Best Jobsite Speaker for 2025

🔹 DEWALT DCR028B Bluetooth Speaker – Rugged, loud, and built for the job site—because good music improves long days.

😂 Contractor Humor: "Why did the contractor bring a ladder to the bar? Because he wanted to raise the roof!"

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👷‍♂️ Stay safe, keep building smarter!
— Benjamin Patton