If you’re a residential or light commercial contractor, you’ve probably heard one of these statements:
→ “My brother-in-law is a carpenter and says you’re charging double what it should cost.”
→ “I talked to seven contractors and none of them know what they’re doing.”
→ “We can’t pay the deposit, but will pay in full when the work is done.”
Every construction business will face dealing with difficult clients at some point. Beyond stressing you out, working with a tough client has other unwanted side effects, including:
- Profit loss
- Client service delays
- Dinged reputation
- Health-impacting stress
- Business closure
Fortunately, there are several red flags that can indicate someone might turn into a problem client during the project. When someone displays one or more red flags, consider passing on the job, or charging a premium price to make the inevitable hassles worth your time.
Here are seven red flags to watch for:
An arrogant client believes the job is so easy they could do it themselves if they had the tools and time. They might claim someone told them what the job should cost and how long it should take to complete.
When you present your estimate outlining the actual amount of time and money it will take to do the job, this client is shocked. They might even threaten to write bad reviews about your company, or tell the Better Business Bureau (BBB) you’re overcharging clients. (Note: The BBB has published advice on what to do if this happens to you.)
This person’s unrealistic expectations and know-it-all attitude causes them to undervalue your expertise. And a client that doesn’t trust you is a difficult one indeed.
It’s usually best to pass on work for arrogant clients.
#2 Horror Stories of Contractors Past
This client lists off how many other contractors who didn’t seem to know what they were doing. Or, they might brag about firing a contractor for shoddy work.
Bad contractors do exist and people do have terrible experiences working with them. So, a client telling you about a bad experience with another company is not an immediate red flag.
But, past problems are a sign to dig deeper. Ask questions about the incident to determine if it was a one-time problem caused by an inexperienced contractor, or if there is a pattern of failure caused by unrealistic client expectations.
If it’s a trend, that person could turn into your next problem client.
#3 Extreme Haggling
It’s okay for clients to ask for a discount. It’s also okay to budget for discounts in estimates so you can still profit when you reduce prices.
These requests enter problem territory when a client haggles over small items, or expects you to throw in non-scoped work and upgrades for free. The client might argue about $15 here and $7 dollars there, or ask you to explain why you’re choosing one material over another when the difference is only 4 cents per unit.
Besides being annoying, discussing line items at depth eats up time.
One way to stop an extreme haggler is to set a discount policy. Offer a percentage or dollar amount off the total project cost and refuse to engage in lengthy discussion over line items.
Good clients accept this type of boundary. Problem clients don’t.
#4 Ignores Permit and Code Standards
Filing for permits is no fun and takes time. But you’re running an ethical business and want to be hired because people trust you do good work.
Some clients aren’t as ethical and look for shortcuts.
Real estate agent Ginny Gorman describes a homeowner who refused to follow building regulations: “He challenged the state and town in court [and the] million dollar plus home was never given a Certificate of Occupancy… never has it been for sale and never [was the issue] resolved satisfactorily. The word is, it really needs to be torn down because it was not built to hurricane standard codes.”
If a client insists on skirting permit or code requirements to save money or speed a project along, it’s a cue to walk away with your integrity intact.
#5 Demand for Contract Revisions
Asking for contract revisions is another demand that is sometimes okay, but can become a problem. If someone wants you to change or remove clauses related to payments and arbitration, it’s a red flag they will be a problem client.
Payment and arbitration clauses are in place to protect both you and the client. If someone wants to change the language in such a way that your company takes on more risk, it may be a sign the prospective client plans to withhold payment or file a claim against your business.
If you don’t know how a proposed change could impact your business, consult an attorney. Otherwise, clients should agree to the terms of your contract.
Indecisive people who aren’t sure about what they want are the polar opposite of arrogant types who will tell you exactly how to do your job. Unfortunately, they can be just as difficult to work for.
Clients need to provide feedback so the end result is something they love—especially on new build and remodel projects. If a client doesn’t communicate their desires or requirements, it’s nearly impossible to figure out how to please them.
This is risky because you could deliver something they don’t like. The indecisive client will become a dissatisfied client, who can cause financial problems and hurt your reputation.
Indecision without the presence of other red flags isn’t a reason to pass on a job, but it does mean the client might need you to spend more time explaining things and guiding them toward decisions. So, budget for that extra time in your estimate.
As always, careful estimating, planning and documentation of every agreement can help if issues arise.
#7 Your Gut Senses a Problem
Maybe you can’t put your finger on it, but have a feeling that someone will be difficult to work for. It’s okay to use that gut instinct to make a decision.
There’s a saying that you don’t lose any money on jobs you don’t take. Turn it down without regret if you’re uncomfortable taking the job, especially if you notice other red flags.
If you ignore the uneasiness and accept the job anyway, just make sure the estimate and contract details are in writing so you can refer to it if the client becomes difficult.
Despite best efforts, problems with clients can still occur. When that happens, refer to the estimate, contract and other documentation to remind the client (and yourself) what both parties agreed to.
No matter the size of your company, you can use cost estimating software to generate estimates more quickly and consistently. This type of software also stores estimates and other documents, so you can easily find and review them as needed.
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