Should I Close My $4,000,000 Business?

[@danclapper626]

My inlaws went out of business because 1 customer didn't pay 300k. You can't carry these people, take action now.

[@_DavidC]

Sad to say same thing happened to a family member of mine before and I saw it tear him down. The construction industry gets very messy at times if you don’t set your boundaries and stand by them, I 100% agree

[@Isaaccross-gh9fq]

I have my I have my own business doing construction any job I do weather it’s 200 or 30,000 dollars I require 50% down so it covers most materials and a little labour so I never get screwed over to bad. You lose some jobs because of it but it’s better to lose a couple jobs than to loose a company you built

[@jameskirk3]

Too many B2B customers are assholes about paying up. At the VERY MOST I will give them a net +30 nowadays. I used to be pretty lax with +60 or +90s if they requested it, but nope. Been too many instances of having to chase someone down to get paid and a few instances of not being paid at all because someone's big bet didn't work out. Keep it at a net+30, and it's a lot less likely that you won't be paid. Also include an interest penalty on outstanding balances at the rate of your money market account. When theyre paying at least 6% interest on top of their balance, they tend to pay up.

[@jameskirk3]

​@Isaaccross-gh9fq that wouldnt be legal for me. I can only take 1/3rd as a deposit. I can take a 20% deposit and require 50% at start of work though.

[@yota87truck]

Landscape contractor here, we don’t do work unless we have a 50% deposit.

[@Brian-rs4ug]

Never allow a large company to dictate the terms of your business. Great advice.

[@Uneducatedcapitalist]

LOL. thats the way real business is. large companies pay slow. They train their employees to pay slow.

[@Brian-rs4ug]

@@Uneducatedcapitalist You teach others how to treat you. Even large companies. You may lose the contract. But your dignity and peace of mind are more important than living in stress and not being able to pay your employees and make a fair profit.

[@Uneducatedcapitalist]

@@Brian-rs4ug you don't teach big corporations anything. Step 1 is to realize your a small roach that gets to nibble on their crumbs . Step 2 is to find a way to get more crumbs so that you can stay full as you wait for slower companies to pay. He needs some other kind of excavation work that pays in weeks not months. He needs to use his relationships to add a little more to the bid for slow pay and or offer a discount for faster pay. Going in flexing muscle isn't going to work.

[@Brian-rs4ug]

@@Uneducatedcapitalist A discount for faster is a good idea.

[@Nehner]

Wrong​@@Uneducatedcapitalist

[@james_crook]

I’m in construction and payments are due within 24 hours of job completion. If an inspection is required payment is due within five business days. Don’t let people walk over you, if you did the work it is your money, not theirs.

[@MeakH1]

Yes in many cases these companies require a deposit or require it when the company is almost done with the project. If this isn't done, the company can sue.

[@PasturePig]

The big company probably thinks they can push him around because of his age. Keep up the good work, man, you have a great future ahead.

[@Jason4Star]

I am in the same boat and when you feel the need to 'grow, grow, grow' your small company, you never like the idea of of possibly losing topline revenue. But you have to from time to time, every 3-4 years or so, you have to commit to a year of getting rid of the 'bad business partners', because that's what those people are. I work as a contractor for several apartment complex owners and I promise you if one resident misses rent on month they are evicted, yet these same people are behind 2, 3, 4 and more months on paying thier contractors.

[@anoneemous406]

The hypocrisy is unreal.

[@CoryFalde175]

When you are breaking into a profession you feel like everyone is doing you a favor by hiring you, you can't believe how much they're paying you and you don't want to rock the boat. After a while you're confidence goes up and you look at the amount of money you're making seems normal. The frantic energy slows down and you're able to process everything faster. At that point you don't mind walking away from what would have been an unbelievable offer a few years ago because there is a better offer somewhere else.

[@ekevanderzee9538]

This.

[@devinhawkins249]

Exactly

[@matthewvanover4580]

This is great advice.

[@workeveryday8737]

Well said its all part of the journey

[@windmonkey95]

Bad customers is a topic that really doesn’t get talked about nearly as much as it should. You can be doing everything right in your business but if you have too many bad customers your life will be a nightmare.

[@NoName-jm4ev]

What I see here is a good young man, who is working his ass off and has a good head on his shoulder but he scaled too quick too large without someone to guide him. Find yourself a nice business tutor/advisor and restructure your business and trim waste. Don't quit because you worked hard to get to this point find yourself in the new direction.

[@Uneducatedcapitalist]

6 years isnt really scaling to fast in construction. Issue is that he sounds like a nice guy. Nice guys dont get paid on time. Not in the construction industry. He needs to bid more to compensate for slow pay. Then offer discount for fast pay and add percentage to late fees.

[@higasaurous57]

Hes just a guy that probably does everyone a "favor" and "ya well take care if that don't worry about it" guy. Just gotta put his foot down. You run the risk of losing business but you'll find more if your good enough.

[@matsherwood6277]

My dad runs our family concrete construction business. We are very small but do well for ourselves financially. He simply requires that customers and contractors pay us when the work is done. We don't bank for customers. Some of the largest companies we work for are the worst in trying to play these games of stringing out payment. You can't let it happen if you're gonna survive and thrive in business.

[@capt.obvious4487]

I own a very small cleaning business I do not charge a lot but if they miss one or two weeks they know not to expect me back. I am not working for free for anybody

[@MsTerrieLynn]

I get paid at each cleaning or I don't go back. 22 years business owner.

[@mikehallrealestate]

I worked for a company that got caught holding the bag for a bankrupting developer. Killed the company I was working for. A $500k accounts receivable is too much risk for a small company like this guy’s

[@tednelson1315]

As a contractor I always did 50% at signing 50% the day work is completed. Occasionally, if work expected to start more than six months out our terms were 1/3 at signing 1/3 after work started, balance same day work was completed. Trust goes both ways. We were so good and desirable. Most of the time we were 18 months out.

[@Uneducatedcapitalist]

Hes not getting 50percent down. I can guarantee that... That sounds like residential work to me. If anything he should do draw downs based on percentage of completion.

[@igo0di]

Wow, good stuff!

[@jameskirk3]

That would be illegal for me. I can charge 1/3rd at the most per my license. I can charge 1/3rd up front and 1/2 at start of work if they'll sign that, but I can't charge 50% up front.

[@Honeydoodooo]

Contractors in CA can only charge 10% or $1k max as down payment

[@LosN209]

What about billing for paid materials acquired as a GC would tell us too when a submitttal is done? Because lets take Interior Finishes like Flooring is last. Prices raise over 90 days after price quotes are requested. So you tell the Sub to procure materials. Then we can bill?

[@lancemanchester605]

As someone who didn’t have anyone to ask advice but came to the same conclusion, if they need you they’ll find a way to pay you. My largest customer, a billion dollar company couldn’t get me paid but I figured didn’t need me. The minute I told them I wasn’t showing up to do a job until everything outstanding was paid and 50% paid up front, 25% at benchmark point and 25% uppin completion. I’m stress free at least I’m owing the job and employees are always paid

[@Viviko]

I’ve been in this situation with my web dev company. Fortunately no debt. 5 years in and I’m still getting used to it” this is my house and you follow my rules” mindset.

[@adibahmed10]

You might think those big companies can just pick somebody else who is willing and able to do the job. But if you're not only a good worker but also a great guy, the greater you are, the more these companies are going to struggle finding someone like you or better than you. Be the best possible worker and be kind of a charmer and a good person. Show them you have heart, you want them to succeed, you want them to be taken care of with whatever you're selling them. Be of worth. And then see the people in your life feel the pain once you leave. Best case scenario, they come back, apologize and you guys can improve your mutual satisfaction. Because now you actually have some leverage by being a good honest hard working man with heart.

[@maphangamaseko6896]

Thanks Dave. I run a one man law firm in South Africa. I will now demand deposits upfront and not take any work without one. Also going to become firm.

[@CaitlinMorris-s3d]

Friendly advice from another lawyer - double check SA monies into trust rules before taking deposits. Not sure how it works in SA but where I am, the rules aren’t as simple for fiduciaries as they are for other contractors

[@joshrowe4023]

I’ve been in construction for 25+ years. I never start a job without 40% down at the signing of the contract. Then it’s another 25% at 75% completion. Then remainder to be paid upon completion. Don’t bother me if you don’t like it, I have plenty of work.

[@mreega4812]

Your a pos that give contractors bad name. You have no pride in quality work. Criminal with a company

[@cherylfauth9543]

How is that 100%?

[@idot3159]

@@cherylfauth9543first 40% , then another 25% so in total 65%. and then after completion the remaining 35% , in total 100%

[@mollygrace3068]

@cherylfauth9543 Guessing it was a typo and requires 50% to start.

[@grace2you598]

35 % is paid on completion

[@AnthonySmith-vv8ks]

I’ve worked for several Fortune 500 companies and typically the terms for smaller projects (

[@GuillermoSanchez-Apex]

Don't let your customers control your business. Best advice!

[@Skydrive717]

The guy aged two years in less than a minute

[@igo0di]

🤣🤣🤣🤣

[@thejoshpope]

In Oregon they have added contracting law to help with this, after 60 days the contractor can charge interest for no payment.

[@FortuneSeek3rz]

Sixty days is a long time.

[@RD19902010]

​@@FortuneSeek3rzunfortunately common

[@petepeterson5337]

My dad just charged more to important customers who were slow to pay. My dad also paid every payable FAST. More than once when both he and a competitor were vying for the same equipment from a vendor so he could bid on a job, my dad got the equipment.

[@truckertwits]

I have a customer who takes 90 to 120 days to pay. I charge they 25% more and my margins are 37% profit.

[@gtileo]

We do larger commercial electrical projects, our suppliers don't get paid until we receive our monthly draw. We've been burnt before where a general contractor we were subbed out by went bankrupt and we were in the hole 500k because we paid all our suppliers. If it wasn't for the client that we were building the grocery store for we would have been a little screwed, but they are a monstrous chain here in Canada and covered the lost money for all their regular trades that were working for this general.

[@CroisMoi]

I just love Dave. He is so wise and good at helping people. Also kind.

[@DeepestQuotesAnd]

And straight tf forward lol

[@floresnashvilledrummer]

That was such a great call. From start to finish. The level at which he operates is astounding. Also, don't f*** with Dave's money.

[@Chardonnay27]

Dave should know that big companies (ie Fortune 500 companies) can't cut large cheques from the trailer on the day the job is completed. It doesn't work that way. Hopefully the caller can get paid within 30 days of completion for the final 50%.

[@ReinaldoAlfaro1]

Im in a similar situation. I am a plumbing contractor in Florida and we do commercial projects. It seems to be the norm that every general contractor “pays their subcontractors when paid”. Usually means that we get paid 50 - 70 days later. I feel that if I took the approach of asking for deposit before the works starts that I would just be kicked to the curb by these GC’s.

[@New-bw4kz]

You do have to give at least 10% deposit in construction. Of you want 50% ask for the 10%, then 40% progress payment, then 50% balance. You the company dictate your payment terms within perimeters of the law. Start ling a job with out a deposit is insane!😊

[@Uneducatedcapitalist]

Correct. it sounds like he isnt getting draw downs.

[@seviperix]

I always do 20% upfront when signing the quote (to lock them in) and an additional 40% upfront before starting (so my materials, preparation time and everything is at least a bit paid for ) And the last 40% you get when delivering the end product. It's all about your cashflow!

[@samuelsnowbarger2052]

Wow, I love the expansion that Ramsey solutions has made. I am 28 years old and I have heard of Dave Ramsey all my life and I have owned a business for the last five years. It is really nice to see the other side of Dave as a businessman which he is clearly very successful at.

[@Alex-mj5dv]

As business scales, cumulative costs will increase. Business 101. It’s the margins that matter. 8-10% net profit is absolutely the aim and healthy for a scaling business. Once you get to a certain scale, nearing that $5m revenue mark, you are not going to be returning 20-30% net profits like you could when it’s you and one other person. It’s just not feasible without profiteering or some sort of fraud, or ridiculously high inflated gross margins.

[@powergrower]

Don't give up man, this is just part of business. Overtime you will build proccess and eventually hire people to handle these things. Keep going and you could turn this into $100 million dollar business one day. I sold my first business for $18 million to a large company. They paid me $4 million and were supposed to pay the rest over the next 5 years. Never saw another dime after the first payment. They pretty much told me we have more lawyers than you, good luck. Never ended up getting the money but I learned and kept moving forward. It's still painful even today but I do think it made a better business person and did go on to build other successful companies.

[@heybudstfunow]

wow get some lawyers dude that's 14 million

[@naomiomi7340]

You should have built another business, sold that to a big company and got all money upfront or at least with watertight terms and THEN gone after your 14 mil.

[@heybudstfunow]

@@naomiomi7340 you must be unemployed

[@knighthawk3559]

Liar

[@potatoes1234]

Sounds like a fake story. $14 million is a lot to get screwed over by.

[@Ka_Gg]

I like this newer channel. In terms of payment options, at one time I worked with this stuff. There are just some companies that always pay late. There can be many reasons but one thing is that they can calculate how much in interest they save doing this. Hypothetically the company wants to get paid as early as possible and pay as late as possible. Technically if they made $50 on a project and could invest that money now, then wait 2 months to pay the materials on that, then they are earning interest on that $50 during that time. There's more to it than that, but you get the point. Also, some of the companies are just known for paying late. Just the way they do things. When I collected from them, I knew this. We weren't strict on them but every once in a while they would get to a point where it would cross the line. I could essentially shut off their access to our product (which they needed). Then, a payment would almost immediately come in. Funny how that works. Now, that's fine when you've worked with these companies for several years and you have a ton more customers that are better. When one customer takes up 15% and aren't good at paying, that a far harder thing to accept. As dave said, dumping them and focusing on the good customers is probably the correct thing. I would really like to know how late they are at paying.

[@clubracer6]

William, breathe and celebrate what you have accomplished! Great advice from Dave and maybe my favorite clip. Would love an update someday. Thanks for sharing!

[@RaceMentally]

William here’s right about getting rid of or getting those companies on track with paying. I’m not going to say sell the equipment though. Keep expanding if you can but retain good relationships. I’m 36 and this is exactly what I went through this year. You’re doing fine dude. Keep going!!!! Cut the fat or make the fat pay first or fees occur.

[@WillE454]

Put a stipulation in the contract that any payments made after 30 days are subject to X interest rate for each day that it’s late.

[@pauldoherty5568]

Consider progress payments. With 30 to 40% down before work starts. The rest of the balance should be Paid based upon milestones. If the milestone payments are not made work stops.

[@derkong7114]

In my experience the worst customers and the ones who I tell I can't service anymore are the ones who go online and trash my business because they are pissed....

[@mspadorchard1]

Perhaps setting a due in 7 days of invoice, and then having interest rates or 20% there after... IF they cannot abide by the 50% up front, and 50 due at time job is done. Also, I believe he can put a lien on any property he does work on and is not paid on time... this puts additional pressure on his developer to pay his bills on time.

[@TheJagjr4450]

I explained that my banker agreed not to go into the paper business and I agreed not to lend money... I gave a 1%10 discount or a 2% cash discount- - those terms with the slow payers really helped with lowering my cumulative recievables back down to under 30 days total.

[@truckertwits]

I wonder if this would work in my business

[@TheJagjr4450]

@@truckertwits I negotiated with other customers even if I ended up giving 2%-10 days - one customer for a certain product was on 2%-20 - I was brokering it out of a paper mill and was on net 30 so I had been paid prior to my invoice being due.

[@TheJagjr4450]

@@truckertwits you can also send the bill with PAY BY DATE - DUE AMOUNT - set it at 10 days with a discount. if paid by this date - X due / If paid by this date - Y due / if paid by this date -Z due

[@richardw3470]

I've seen a few recent job sites where the unpaid contractor came in and took back his 'supplies' (patio slabs, windows, a freaking a/c off a slab, etc). Only the windows surprised me since they're kinda attached not just plugged in. A grading company - would be interesting to watch the 'undoing'.

[@DE-Burrows]

With Roth IRA, the money you are contributing has already been taxed. At any time for any reason, you can withdraw your contributions tax-free and penalty-free. Additionally, any earnings on investments can also be withdrawn tax-free and penalty-free, Not sure how much to contribute, I'm still at a crossroads deciding if to liquidate my $338k stock portfolio.

[@BraxtonScott452]

To achieve a secure retirement, aiming to save at least 15% of your income in a 401(k) is advisable. Online tools can assist in calculating the best savings strategy for you, considering factors like age and income. Consistently saving this percentage can help build your retirement fund effectively, thanks to the benefits of compound interest.

[@ChrisDERUNNER]

It's unfortunate most people don't have such information. I don't really blame people who panic. Lack of information can be a big hurdle. I've been making more than $875k by just investing through an advisor, and I don't have to do much work. Doesn't matter if the economy is misbehaving; great wealth managers will always make returns.

[@MarcelinaMakowski]

ADBE, VWINX and FSPGX are all still good buy, but what do I know I’m not a financial advisor lol

[@BEAUTIFULDIANAFRANCIS]

I agree, that's the more reason I prefer my day to day investment decisions being guided by an advisor, seeing that their entire skillset is built around going long and short at the same time both employing risk for its asymmetrical upside and laying off risk as a hedge against the inevitable downward turns, coupled with the exclusive information/analysis they have, it's near impossible to not out-perform, been using my advisor for over 2years+ and I've netted over 2.8million.

[@AnnBurrow-vb8tt]

@@BEAUTIFULDIANAFRANCIS How can I reach this adviser of yours? because I'm seeking for a more effective investment approach on my savings?

[@netasedlak9454]

We do demolition, and we have a customer that decided that we did more work than they told us to do, and they shafted us to the tune of $225,000. We made the mistake of obeying the GC, instead of seeking the actual customer's opinion. We are supposed to be getting a check for $43,000, but months go by and the check is not arriving. We have a diversified business, thank the good Lord, so we survived this.

[@user-dy2xu3uv8k]

Karma is a real thing are you sure you haven't done anything to deserve getting screwed over? God always has a plan

[@netasedlak9454]

@@user-dy2xu3uv8k interesting mix of Hindu or Buddhism and Christianity... The answer to your question is yes. We deliberately don't ever screw anyone over. Some people don't work that way. We met some. We will not be doing business with them, again.

[@jamescalvosa413]

I would like to know how much competition there is in his particular field. That matters when negotiating terms.

[@EcomCarl]

William's proactive approach to managing business challenges by addressing debt and customer relationships is commendable. 👏 Streamlining operations and focusing on reliable partnerships can dramatically enhance business sustainability and personal well-being.

[@pauldoherty5568]

After you sell off your high dollar equipment, consider Renting equipment based upon needs of the job at hand very

[@Yahookudi]

Man who knew Dave Ramsey would give better business advice than Stanford Business School could ever.

[@patrickhenandez]

Amazing video, A friend of mine referred me to a financial adviser sometime ago and we got talking about investment and money. I started investing with $120k and in the first 2 months , my portfolio was reading $274,800. Crazy right!, I decided to reinvest my profit and gets more interesting. For over a year we have been working together making consistent profit just bought my second home 2 weeks ago and care for my family.

[@MartaRinker]

Hi. I’ve been forced to find additional sources of income as I got retrenched. I barely have time to continue trading and watch my investments since I had my second child. Do you think I should take a break for a while from the market and focus on other things or return whenever I have free time or is it a continuous process? Thanks

[@patrickhenandez]

@@MartaRinker However, if you do not have access to a professional like SUZANNE GLADYS XANDER, quitting your job to focus on trading may not be the best approach. It is important to consider all options and seek guidance from reliable sources before making any major decisions. Consulting with an AI or using automated trading systems can also be helpful in managing investments while balancing other commitments.

[@MartaRinker]

@@patrickhenandez Oh I would love that. thank you.

[@patrickhenandez]

@@MartaRinker SUZANNE GLADYS XANDER.

[@patrickhenandez]

Lookup with her name on the webpage.

[@reggiejenkins6458]

I’m a 20+ year contractor with a remodeling business. It is super common to do 50/50 payments. Dave is just entirely wrong on this. I personally require a smaller amount up front along with progress payments, but there is no way I would ever start a job without a deposit. If a contractor doesn’t get a deposit, that means he is literally financing the job (including material purchases) for the homeowner until payment. That’s a super risky and dumb thing for any company to do. It would be a red flag for a company to not want a deposit and a red flag for a homeowner who doesn’t want to pay one. It’s unreasonable to expect a company/person to take that risk. The only real exception is repeat work from someone you know and trust, typically subs doing work for general contractors they already have a good relationship with.

[@nathanielwiebe2257]

I'm a fence builder and there is NO WAY I would do a job without a 50% deposit. If they don't feel comfortable, I give them a list of materials they they can order themselves from my supplier with my contractor discount. It makes sense if you're a sub since the GC is providing materials, but if you need to front materials, you need that cash.

[@anacorreia8058]

Very true. I’m in the industry and Reggie Jenkins is correct here

[@anacorreia8058]

We have our customers pay for paint directly to the paint store (in my company) and they pay us 1/3 down payment for the labor. It’s really just a good way to weed out scammers or non-committed people, and we always do great work so people know they can trust us

[@bosstime2010]

Maybe I’m confused but how is he wrong? He’s advocating exactly what you said.

[@reggiejenkins6458]

@@bosstime2010 sort of. He ended up paying the guy 50/50 but only after being forced to by his wife. It’s a mixed message at best.

[@thinkingoutside970]

I agree with some things disagree with others. 2.things you should consider. 1..take on an equity partner who can buy a %.of your business for cash. That gives you a float u can use to bridge slow payers. 2. Invest in sales/ lead generation to get your own customers. Part of your issue is you are beholden to these contractors and you need your own customers. That way you can choose to continue to work with the guys or just get your own jobs.

[@Ka_Gg]

What? Sell part of your company so you can essentially be a bank for other companies?

[@creativecraving]

Nah. A good lawyer to set up a good contract will be cheaper than a partner.

[@nickade2256]

I won't sell for cash as that does address the underlying problem. It only alleviates the symptoms.

[@erikbudrow1255]

As a contractor, on medium to large jobs I ask for 1/3 up front, 1/3 halfway, 1/3 after the customer is satisfied. That way it's hard for me--or them--to feel too vulnerable. Makes for a better relationship imo.

[@JasonMarrs]

Mindset…”awarded work”…great advice Dave!

[@ScottKing-on2gg]

Problem is all major construction contracts are pay when paid. It’s an industry problem. Maybe 10% upfront for a really small contractor and a finance charge on payments over 60 days.

[@Donnald.]

I've only made roughly 8% total, or 2% annually, from investing my $150k salary over the past four years. i want to build a good investment portfolio and have been looking at videos and doing research to be more educated. Where should i invest this for stable cashflow?

[@Defisher]

Invest in real estate, ETFs and high-yield savings account.

[@AlbertGReene-p8w]

stocks are pretty volatile now, but if you do the right math you should be just fine, whereas you can save yourself the hassle by employing the service of a really successful advisor, one with experience since the '08 crash

[@Too-old-Forthischet]

You have a very valid point, I started investing on my own and for a long time, the market was really ripping me off. I decided to hire a CFA, even though I was skeptical at first, and I beat the market by more than 14.3%. I thought it was a fluke until it happened two years in a row, and so I’ve been sticking to investing via an advisor.

[@SkepticalMechanic-l9x]

I'm intrigued by this. I've searched for financial advisors online but it's kind of hard to get in touch with one. Okay if I ask you for a recommendation?

[@Too-old-Forthischet]

I've experimented with a few over the past years, but I've stuck with the popularly ‘’Melissa Elise Robinson” for about five years now, and her performance has been consistently impressive. She’s quite known in her field, look her up

[@juanr8591]

Sounds like Accounts receivable problem and they need hire someone to start calling once the customer goes past the Net 30 or whatever net they have on it.

[@ekevanderzee9538]

Even if the client sets the terms, implement a discount for payment within 10 working days.

[@Rocko1II]

Big companies are natorious for not paying for 30 to 90 days...they got 1 week to pay or they owe interest and late fees in the contract.

[@jackarnold7887]

Typical of large companies being slow to pay. I retired from a very large, multinational company. They were horrible to subs because their terms were Net 90. Smaller companies couldn't afford to be a supplier for this company because they didn't have the capital to carry this company for 90 days. On the flip side they demanded Net 30 from their customers.

[@Nanstar0k]

I worked for one of those companies also. They didn't care about your terms, or if you were going to charge interest. They paid net 90 to the invoice.

[@michaelw1602]

Dave doesn’t understand how the industry works… they are a subcontractor that likely works for under GC, the GC works for the developer. GC doesn’t pay subcontractor until the developer pays them.

[@JoeyNYSDnomad]

It is simple you have standards and operating procedures. You make it clear the job does not start without half the money up front. Get it in writing.

[@vickigass7493]

The bigger the client the worse they treat a subcontractor. The contracts are 100 pages long, insurance liability all shifts you BUT all contracts are negotiable. Get a good construction lawyer and get support through trade associations like Association of Builders and Contractors.

[@Big-Government-Is-The-Problem]

in the roofing world we always take 50% upfront from the customer.

[@hasanusmani8103]

I would do invoice factoring and pass on the interest.

[@truckertwits]

Absolutely 💯 you only pay about 1% to factor these invoices.

[@broreal]

One of The main problems for the subcontractors is that many of these general contracor vs. subcontract agreements have “pay-when-paid” terms. Thus, the subs only get paid when the GC is paid & that takes some time.

[@dianabialaskahansen2972]

Sounds like he should be setting milestones. Partial payments after 20%, 40%, 60% and so on, so if they fail to pay one on time, progress will stop until paid. This way OP will also have a more steady cash flow, to be used on materials and wages. An alternative is to have the payment put into escrow when the project starts. This way he will get the money when it is completed, without having to chase companies for payments.

[@danielhausbeck9976]

He’s not burned out because of debt. He’s burned out because he’s building up more mental pressure than the rate of release. I used to own a landscape construction business for 14 years. Construction is a nightmare of a business to be in. And the payoff isn’t high enough relative to all the headaches that you have to deal with.

[@mikevernacchio5384]

The Brazilian wood is probably tiger wood or IPE. I’m not paying for your porch and hoping that you will actually pay for it when we’re done.

[@KellyBaker-c9k]

A good paying customer doesn’t guarantee they’ll pay that way forever. My husband had one of his best paying customers file Chapter 11. Now it’s up to the courts if we get paid. Get something upfront if you can.

[@adamalker71]

Thanks for the advice! I'm new to financial planning and wasn't sure where to start. Any tips on finding a reliable financial adviser or resource to guide beginners? .

[@waynes4369]

As a beginner, it's essential for you to have a mentor that is verified by finra and SEC to keep you accountable. I'm guided by a widely known financial consultant Stacey Macken .

[@Ricgibs]

Truly, investing has changed my perspective on how one can succeed in life; working multiple jobs isn't the optimal way to attain financial freedom and unfortunately, we discover this later in life. Currently earn as much as 12 grand weekly and this has improved my financial life

[@raphfelimax2713]

YES! that's exactly her name (Stacey Macken) I watched her interview on CNN News and so many people recommended her trading skills, she's an expert and I'm just starting with her....From Brisbane Australia

[@inicMich-rc5wo]

This Woman has really change the life of many people from different countries and am a testimony of her trading platform .

[@Melbn-di6mi]

Wow. I'm a bit perplexed seeing her been mentioned here also Didn't know she has been good to so many people too this is wonderful, I'm in my fifth trade with her and it has been super

[@HighHorsepower220]

As a Homebuilder myself, tell them you will pay the 50% Deposit Day One when all the materials are delivered to your site. But make sure you get a "Waiver" that is notarized saying the materials are Paid for, otherwise the supplier can Lien your property.

[@Mechanical_Mind]

I learned this lesson a long time ago. Those "big" customers can easily be your worst customers when it comes time to pay. So many young new guys get caught up in their fantasy claims of big $$$ jobs.

[@mwv25]

My wife and I own an appliance repair company. In our area we are the top Maytag warranty service provider. Lowes approached us and wanted us to provide extended warranty service for their customers. I was excited and over the moon to do it. But they wanted us to pay for parts up front. I did it until they went with a new provider who wanted us to buy parts for Lowes customers upfront. I did it for a bit until I got in the hole on part cost. I called Lowe’s and told them either pay for parts up front or stop sending us calls. Well that was the end of us doing work for lowes and it was also the end of my headaches worrying about part costs. Moral of the story is don’t let these large companies but rules and demands on your business when you own the business.

[@cherik6710]

Invoices with time gated discounts typically are the first paid by a company/corporation, even if a fraction of a percent. I've used this method to combat slow payers and calculated what the discount cost may be as less than my cost with collection efforts would be. I get paid sooner with less "effort."

[@chadlevitan7886]

Fuck that. Negotiate Net 30, 60 etc terms or whatever you need for your cashflow with penalties if they don’t pay on time. Don’t reward people for simply doing the right thing and not punish them for being late.

[@RD19902010]

​@@chadlevitan7886 the discounted prices are the real prices, the non-discounted ones simply require a premium.

[@JuancoPRoFlow]

Use a factoring company and send them all your invoices and they will front you the money you're owed. Look into it.

[@Rancher512]

Large oil companies pay 90-120 days out. People who do business with them charge 100 to 200 percent more than the oil companies who pay fast. They would save lots of money to pay quicker.

[@willbennett08]

Of course the bad customers are giving him a lot of business. The other contractors who do the same work demand payment and he’s letting the bills grow and grow while still taking on more jobs. Who wouldn’t love that kind of contractor if you’re a developer?!

[@mwhe3111]

Good stories and advice from Dave.

[@ROMSradio]

I now have an ulcer from stress as well

[@tightwadtv3421]

My business had to stop selling to a Fortune 100 company because collecting was to time consuming. Their buyers were begging for our product. Unfortunately, the buyers don't write the checks.

[@jessehudson1318]

Dave has opinions that are 20+ years old. .coms are not riskier than other companies. That’s 2000 mindset. Contractors charge homeowners deposits to start work. Sharon wasnt a GC. He wasn’t a ‘sub’. She was a housewife hiring a company directly to do a job.

[@greauxpete]

One of the best segments ive heard..

[@geoffl]

wow, you got right down to the issue and got to a solution.

[@charlesaboujawdeh]

Also, can apple explain why it costs 600$ to upgrade a Mac Mini from M4 to M4 Pro while it costs 400$ for the Macbook Pro...

[@L1L2L3L4S]

I would ask for the second half of the payment a few days before the job is completed!

[@greauxpete]

It's a tough call, trying to weigh lost revenue vs the uncertainty of finding a new client who may put you in the same boat. Ultimately, getting rid of dysfunctional clients is a weight off of your shoulders. I've experienced this and thought, Damn I should done this years ago. I get the apprehension, but once you learn to cut out the dysfunction you don't look back.

[@verb0ze]

Sound advice!

[@jonquindiagan7625]

Thank you for sharing your experience.

[@beamlarochelle5001]

This is Incredible content, thank you

[@alangonzalez9821]

Why doesn't he get a funding company to keep liquid? They'll do all the collection for up to 60-90 days.

[@wobbuffetbuffet]

Send them a notice that late fees will start to charged after 30 days past invoice. Then after 2 months liens will be issued against the properties under development. There you go.

[@chadj6380]

Great advice Dave!!!

[@jimleszczynski]

Papa Dave. What does crazier than a bean mean?

[@coderider3022]

I’ve been there, gets annoying when people don’t pay quickly. Really annoying when they agree to work, with a month lead time then want to pay you end of next following month. Relatively small amount. I felt out with people , started charging for small jobs I would have done for free before I was messed about.

[@gdhone2371]

Dave, just wondering. What about mechanics lien on the land? When I sold some land , I sold it cashed out to me before a spoonful of dirt moves, before anything lienable to the property is enacted. I know contractors who filed a lien on the property the day the work begins or had the developer name them on a bond for more than the bid.

[@sw4841]

The bigger the client the longer they take to pay…. Facts.., they think u need them more

[@melanie2100]

very wise advice!

[@nsndns4947]

There are few companies out there that will pay a sub up front. Best thing to do is front load you pay applications a little bit every month for the first few months so you have some non committed cash in your account

[@sleepyjoeb.8726]

Bingo!!! I’ve been in commercial construction for over 20 years with 13 years in general contracting management. Always front load your general conditions cost on your schedule of values I.e. mobilization or submittal costs, any administration cost. Second thought is he’s been in business for six years and owns three million dollars in equipment. He should be still renting his heavy equipment per job at this point to eliminate monthly maintenance costs. Once the company becomes more established and he’s available to become bonded. He can bid work direct and not be a lower tier sub to a subcontractor. To me he expanded way too fast without understanding the underlying costs to do business in construction.

[@TheJakekeller22]

Apparently some of you don’t know how GC/subcontractor contract language works. The GC writes the subcontractor a contract with language based on their contract with the Owner/Developer. Now there can be different payment terms but usually 50% deposit is for vendors/purchase orders (depending on the company) and not subcontractors. Subcontractors can request different payment terms if it’s short term work/special occasion, etc. If GC isn’t paying the subcontractor on time per the agreement it’s usually because of slow owner payment, outstanding notice to contractors or something else. If a GC is flat out not paying a subcontractor for no reason after being funded by the owner, subcontractor has rights per the executed agreement. This 50/50 nonsense is totally false. I like William, sounds like a smart guy who is frustrated with lazy developers/general contractors. You can’t “fire” who you are working for but you can take legal action if not getting paid on time. Terrible take.

[@CallsignEskimo-l3o]

Dave went straight to the first card in his deck: Sell the car.

[@mikereddy18]

I’m in the contracting business. He’s not charging enough. 17 employees and only $4m revenue?

[@MrSignSolutions]

In our industry 50/50 is the standard. Normally the last 50 is net 30. Bigger projects are 50 and then balance draws. That is because we have materials and labor building specific products for that client. Excavation I would imagine, 10-20 % once on site, draws through out so you are no more than 10-20% out and net 30.