Mastering business ownership is a never-ending journey. You always have more to learn and more to work on. However, some of the best tactics you can employ to protect your business are as easy as building a simple new habit and making a small investment of time and effort. In my line of work, I see many construction business owners lose work, money, and even their businesses simply because they haven't prepared and protected their companies. In this blog, I'll discuss some easy ways to keep your company from facing the same fate. With a relatively small amount of effort, these simple changes can significantly protect your business.
Develop a Paper Trail
Building a paper trail is one of the most essential and easiest ways to protect your company. If I could give you only one piece of advice, it would be this: always respond in writing. Any time you interact with your client, always follow up in text or email to ensure you build a paper trail. Any time an issue is brought up to you, or you receive a letter in the mail that affects the job, follow up in writing. In doing this, you provide extensive protection for any miscommunications and mishaps that could come about on a construction project, and you make it easier for a construction lawyer to defend you should an issue be taken to court.
Another way to build a paper trail is by implementing daily reports. Even if they aren't required, it's a huge benefit to all parties working on the project to write and submit daily reports. This practice acts as a consistent means of communication between you, your team, any hiring parties, and the client. Everyone stays informed about progress, milestones, and any issues that arise while the work happens. This kind of consistent check-in makes it less likely that you run into misunderstandings and allows you to have a documented trail of evidence should something go wrong. Communicating more never hurts anybody and building a paper trail is a great way to up communication for your benefit.
Prepare on the Front End
A sure way to keep yourself protected is by preparing on the front end. What I mean by this is that you need to be ready for the worst-case scenario before it comes. Having a written contract before you start work is an essential piece of this puzzle. Your contract is built to keep you out of harm's way and manage you and your client's expectations before a project begins. By managing expectations and protecting yourself preemptively, you greatly minimize the number of issues you might run into in the long run. The best way to do this is by having a custom-built construction contract crafted for your company by a construction attorney.
Getting paid what you are owed is essential. Part of being prepared is having a collection strategy in place before you are in a position where you need to enforce it. The best way to ensure that you get your money every time is by having a plan of action for when somebody neglects to pay you for your work. Know your state's lien laws, have your invoices on hand, keep a record of when you send your client said invoices, and know who to call and/or what to do if you don't hear back. A great way to build an air-tight collection strategy is by speaking with experienced lien professionals to build a plan for your business! Prepare now and win later.
In Conclusion
If you are prepared on the front end and implement habits that put your business first, you are far less likely to run into an issue. Putting in the extra time and effort it takes to develop these great habits and skills can literally make or break your business. Is a little time and effort worth seeing your business not only survive but thrive as well? I'm willing to bet it is. Take steps to build a paper trail, ensure you have a construction contract before you begin work, and have a collection strategy figured out before it becomes an issue. Do these simple things, and you and your business will be on the road to success!
About the Author:
A published author, award-winning lawyer, devoted wife and mother to three girls, Owner and seasoned Managing Partner of The Cromeens Law Firm (TCLF), Karalynn Cromeens is a true jack of all trades. She has firsthand knowledge of the construction industry and understands the different obstacles that contractors face on a daily basis. Karalynn is passionate about protecting the businesses her clients have built and being a lifelong partner in their company’s success. Karalynn is the Co-Founder of Morrell Masonry Supply and Owner of The Subcontractor Institute, an easy-access online educational platform for contractors. In addition to TCLF, and The Subcontractor Institute, she is also the host of the rapidly growing educational construction podcast, Quit Getting Screwed - making cost-free industry insight available to contractors across the country. In 2021, Karalynn published two Amazon Best-Selling books - Quit Getting Screwed: Understanding and Negotiating the Subcontract and Quit Getting Stiffed: A Texas Contractor’s Guide to Liens & Collections.
In the seventeen years she has practiced construction, real estate, and business law, Karalynn has reviewed and explained thousands of subcontracts. For years, she has tried saving companies that have signed problematic subcontracts and lost out on being paid for their work. Unfortunately, it was too late by the time they came to her; she could do nothing to help. She hated seeing clients lose money—sometimes their entire business—over language they did not understand and laws they did not know about. Watching these situations play out day after day was the driving force behind her two books, The Subcontractor Institute, and the firm’s accessibility efforts. To understand Karalynn’s foundation, as well as the basis of the firm, we first must understand where she came from- a community she refers to as the “Get Shit Done Tribe”. This community made Karalynn who she is today, and now is who she works to protect. She deeply values the GSD tribe and is inspired by their drive. Providing education to contractors on a national level has become Karalynn’s personal mission, and she is always doing what she can to help make it a reality.
