Terminating a Job in Mid-Project

      This story of a job gone sour has a happy ending: The cabinetmaker gets out in good shape by having a good contract and standing his ground. January 13, 2009

Question
A client and I started the design on a whole house cabinet job back in August of last year. We met in excess of 90 hours over the course of six months to discuss, design and draw the project out on CAD. Collected a nominal deposit of $2500 against a $30k job. Finalized the contract in early April, with work to begin in mid-April. Some of the work (trim) was to be done time and material. We started work at the appointed time, but there were owner-caused delays because owner-provided material was decided on and/or delivered. As in most jobs, the scope changed a couple of times too. Submitted 2 invoices for time, which was readily paid.

Owner starts jumping up and down that the project is taking too long. (Remember, I was only on the job for two weeks.) Owner takes off to Africa for two weeks and returns this past weekend. Because materials had not been chosen and/or details had not been decided on things like interior doors, faux transoms, etc. not much was done in the house, and thus zero time tickets were submitted while they were gone. Owner's husband shows up at shop today and says they can't afford to wait much longer to finish the project. (He said some other choice things too, which led me to believe that maybe his wife hadn't really leveled with him.) At any rate, he fires me off the job and doesn't want to take delivery of any other remaining work in progress.

We are meeting on Friday afternoon to settle up and he tells me to make sure that I bring my checkbook so he can put this affair behind him. So, here I am tallying everything up.

Have never been through this before, so I have a couple of questions. Let me preface this with the fact that I have a pretty good contract that among other things accounts for transfer of ownership of work in progress, etc. The one thing is doesn't account for, though, is design fees, since I normally just wrap that into my cabinet price.

Well, since I'm not doing the cabinets, I still think I should be paid for my time meeting with them since most of the time, those meetings entailed trips to suppliers and many hours drawing things on CAD and having them sit there and make changes as I drew.

How would you guys approach this? Would you say "bring your checkbook because you're gonna need it" to the customer, or would you roll over and take it?

Forum Responses
(Business and Management Forum)
From contributor S:
It sounds like the problems were with the wife. Try to bring the husband onto your team to get the project finished. Sounds like good pay.

Tally all of your time and expenses and prepare a detailed invoice.
$ xx for travel time
$ xx for design work
$ xx for work-in-progress

Also, detail all of his wife's shenanigans and indicate how they adversely affected not only your ability to complete his project, but also any opportunity costs because you couldn't work on other projects. If you also show the amount of work that will have to be repeated by another shop - delaying the project further - you might be able to get the husband to be your ally in bringing project to completion.

Identify the costs that were included in completion of the overall project, and also a list of any decisions that need to be made to finish. Perhaps showing him the dollars to completion at this point will also convince him that he's better off staying with you at this point.



From contributor P:
Contributor S's suggestions are good, but one thing I have learned over the years is that trying to turn one spouse against the other is difficult - they have a much larger incentive to get along with each other than they have to get along with you.


From contributor A:
I concur with contributor P on this one. The spouses may not even like each other, but if you show any sign of attack, it will bite you. They will circle the wagons and you will lose. Just state the facts. Ask for what you want, ask them what they want.


From contributor J:
Do you have a paper trail requesting info and decisions as needed and how much each delay will affect the schedule and/or the cost?


From the original questioner:
Thanks for suggestions. I do have the paper trail. I keep a daily journal of my activities because I tend to forget things. Some of the items are 100% complete. Others haven't been started and still others are 50% or more complete. I think the real issue here is that this guy thinks I've been working on his project for 10 months and I just hit the job site on 04/11 and they left on around 05/01 and just returned from abroad.


From contributor J:
When I said paper trail, I meant back and forth with the customer RFI and so forth. With all that in place the customer can hardly say, hey - I thought you started 10 months ago when he had no released info until 2 weeks ago.

I always give a due date based on, let's say, 8 weeks from when I have all the info that the customer is responsible to get to me. (Appliance specs, colors, anything else that they want to control.) If they don't get the info I need, this will delay either the start date and/or the due date considerably. Most customers (even the ones with impressive college degrees) don't have a clue how to manage a project.



From the original questioner:
I understood what you meant. I have it documented many times throughout my journal where I asked for decisions about this or that. Was always told "tomorrow." Owner was at shop yesterday and wanted to know why one cabinet wasn't finished. This particular cabinet is a restored antique that they plan to use for a bath vanity. Has two sinks, but your guess is as good as mine what kind of sinks. So I tell him that I've been asking for the sinks for a long time. He says don't worry about it. Take it as is to my house. I'll cut the sinks in. Guess what I'm trying to communicate is that there is no salvaging this job. This is strictly a case of cutting losses without getting into a yelling match. Even if I were able to make a valid case, I wouldn't want this job anymore.


From the original questioner:
Okay, meeting was held. Owner/wife/attorney showed up. Owner was kind of huffy initially, but that all changed as I presented my documentation. 30 minutes into the meeting, the owner turns to his attorney and said that a contract would have solved all this. I quickly presented the signed contract along with the detailed bid. Man, did the tunes change to a positive note. All of sudden, I could do no wrong. As they reviewed the contract, which spelled everything out, I calmly placed an unsigned material lien release on the table beside the quote. This action was not unnoticed by the attorney, who suggested that maybe we could work out an agreement and get this project wrapped up as quickly as possible.

This is where my wife/office manager intervened. She very professionally told them to stick it in their ear. I hate walking away from a job this size, but even if we reached an agreement, my wife was correct in assuming that there would be future problems.

So, they agreed to pay my balance due, and I agreed to sign the lien release. I guess the lesson that I learned here and one that I want to share is that you should always stand your ground when you are right; make concessions because you want to, not because you have to; and document everything.



From contributor R:
Hurray for you and your wife! It's a good thing you didn't get further into the project as these people would have ended up costing you more than what it would have been worth.


From the original questioner:
Thank you for the vote of confidence. I've been replaying everything in my mind. I'm always thinking about the golden rule. My wife is just the opposite of me. Her motto is that we have to protect ourselves period. Everyone else be damned. Prior to the meeting, she told me that if I felt the urge to make a concession, I should bite my tongue, count to ten, and wait and give her a chance to respond before I made a concession that I would later regret. So, I took her advice and it paid off.

I actually made money on this incomplete project and I can still maintain my dignity and hold my head up, which is important to me. I guess that is why she's the boss and I'm the worker bee.



From contributor J:
Just a thought. Please don't take this wrong. Has anyone calculated the cost of the bad PR from this customer? Nordstroms is the most successful retailer in this country because of their "customer always right" policy. People come there in droves to spend money because of it.


From the original questioner:
I think that Nordstroms' ability to accept unconditional returns has little bearing on their overall performance and likewise has even smaller bearing on a small cabinet shop. I understand your thought process though.

When I read your post, I realized that I knew very little about Nordstroms and their policies so I went to their website and read a little bit before opening my big mouth. What I learned is that they do have a very liberal, no-questions-asked return policy and that policy may influence some buyers to shop with them. However, I think that their return policy has little to do with their overall success. Instead, I would say that the major portion of their success comes from their ability to carry top of the line products and their management's ability to invest and reinvest their profits. That is what makes them successful, and unfortunately outside the realm of most if not all of the cabinetmakers that I know.

There once was a very prolific contractor, Sonny Lykos, who passed away recently. Mr. Lykos had a candor that could only be learned through extensive life experience. He once stated that most cabinetmakers (contractors) don't have the wherewithal to absorb do-overs. Those that do can only do so a few times before it significantly impacts their bottom line. Thus, for most contractors (cabinetmakers) their success will lie in their ability to recognize when a project is about to go upside down and to make immediate adjustments to correct the situation, which most of the time means cutting your losses as soon as possible. Am I right or wrong?



From contributor R:
Do you honestly think that the questioner's former customer is going to stand up on a soapbox and proclaim that they are the biggest bungholes northeast of anywhere? I doubt it. That type of person usually brags to their "own kind" how they got over on some poor guy trying to create something that everyone would be proud of. My hat's off to the questioner and his wife for having the stones to tell "that kind" to stick it in their rear.


From contributor A:
I vote you are right. The questioner and his wife exercised good judgment, as evidenced by their outcome.

My experience has been that "the customer is always right" policy, even when the customer is wrong, is an invitation to disaster. People in general and clients most especially are frequently prone to treat you just as abusively as you allow them to. Allowing them is training them. Training them to be abusive or take advantage is detrimental to the industry and society as a whole.



From contributor J:
My "customer is right" analogy was in a general sense. In our industry we manufacture things, usually pre-sold. So our customer service can still be as good as Nordsroms but handled differently. If we do our diligence upfront, then there will be less issues that can come up. It can be done with great success as we build a solid reputation for satisfying the customer. If we think otherwise, then we can see why so many shops go under every year.


From the original questioner:
For the most part I agree with you. Unfortunately, it has been my experience that when customers become problems, it usually has to do with their unwillingness to pay as agreed. On another forum, I just finished reading a thread where a customer not only withheld final payment of $15k, but actually issued a stop payment on the check they wrote, all because the homeowner wanted to use it as leverage to force the contractor to replace a $50 tile. There had been no previous problems between them and they had worked together on other projects for several years. The customer's actions caused the contractor to bounce checks and hurt his relationship with employees, subs and suppliers.

Was the customer right? I don't think so. There is a fine line between providing good customer service and bending over. I for one won't do it. I try very hard to remain professional and conduct business in a business-like manner. It is difficult because as much time as you spend with a customer, it becomes real easy to let your guard down and develop friendships with them, which in turn will cloud your business judgment.



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