Bail or Stick?

A few communication lapses in the 3-way among a cabinetmaker, a designer, and the customer have given the cab guy itchy feet. This discussion delves deep into how and why jobs go wrong, how to handle communication, and when it's wisest to walk away. February 19, 2008

I just received a deposit on a project comprised of three separate pieces for the same homeowner, but the contract is with a designer. The designer is marking up my price, though I'm not sure to what extent, and I lowered my price to get the job, based on initial feedback regarding budget. The bigger of the three is a media center, and while the design is competent, there are many details that need to be ironed out. As I'm about to start construction drawings, it's getting clear that the designer is expecting me to do most of the ironing, mostly due to inexperience on their part. This is expected to a certain degree, but in two of the three projects, there will be a long list of specs surrounding electronic components, speaker panels, and small appliances. I also fear the designer has sold the homeowner (who I haven't met) certain features early on that I precluded when lowering price - they wanted beaded inset doors and drawers, I said budget allowed full overlay instead.

My gut is telling me I'll be losing money on this job and I'm considering refunding the deposit and cutting my losses. Never done it before, and don't burn any bridges casually, but as a two-man custom shop with a leased space and everything that comes with it, I'm already riding the sharp edge between making it and not. A substantial job with numerous designer-based snags could lead to real financial setback. On the other hand, while I have some immediate work to jump on, I may or may not get enough to replace this one if I bail. I'd appreciate any feedback.

Forum Responses
(Business and Management Forum)
From contributor B:
Go with your gut feeling on this one and walk away. If you are having this now, it is likely that things will not improve. You should have a great relationship with your customer and it doesn't sound like you have that going for you on this sale. Every time I had that feeling that you are talking about, it turned out badly. Stick to the contracts that you feel good about.

From contributor H:
A bad taste in your mouth now will lead to vomiting later. Gut feelings are more often right than wrong. I would return the deposit and firmly explain why. If the designer wants you to still do it, you can renegotiate and iron out those things that concern you.

From contributor R:
Do you have a contract? Signed? You might have to honor it. Does your contract say whether or not the job has beaded inset doors? Go ahead and meet with the customer. Tell them up front what you agreed to build. Tell them that if it varies from those specs, the price will increase or you will refund the deposit to the designer. Do not let the customer drive the conversation. Don't feel pressured to do something that you did not agree to.

From contributor I:
I faced the bail-no-bail decision last year. The job was a fireplace surround/entertainment center with wainscot panels and three piece crown, all in a glaze crackle finish. Everything was a problem... the physical size of the TV, which had to have removable panels on the bottom so the TV could be rolled out, flip up doors hiding the electronics, walls angling away.

I had some large rush jobs come through that made me put this on the back burner. They weren't complaining, so I stalled while I tried to figure out how I was going to do this. I lost sleep. I thought of the consequences of their reaction to my canceling, the badmouthing I would get, the loss of the money. The clincher was the amount of money I would have to return, the deposit. And the loss of my own self respect for giving up. I'm supposed to be a pro.

In the end, the job was beautiful. However, I wasn't able to house a large (34x48) flip-up door over the TV screen and did bi-folds instead, which they said they didn't like, but still kept them on, and docked me $650. I believe they still badmouthed me, but I finished, got paid, the photos are a great addition to my portfolio, and I did what I said I would do (almost).

Think long and hard about all of the consequences. Who can afford even one customer badmouthing us?

From contributor A:
These are the reasons that I no longer work with designers and I am also limiting the amount of work that I do with contractors. For me, a middleman/woman just ends up being more hassle than it is worth. No thanks! This business has enough challenges as it is.

With respect to your current situation, I think you have a couple good options depending on your case. If you believe you can make money on the project, then I would recommend the following. Specify exactly what you are offering for the price that you are asking. Do this in writing. This should have been done from the beginning but it is better late than never. (If you did this already in writing, then you have no problem and you just point out where you specified that the doors would be full overlay). People will quite often “forget” key bits of information if it is not in writing. Make it very clear that any additions or changes will cost more. Get your change order template ready and do not hesitate to fill it out and send it over. Do not make any changes to the project unless you receive the signed change order back and the payment for the changes. Then remember in the future that you need to specify exactly what you are building for a certain price and this needs to be in writing.

If it is a worst case scenario and you think that you will incur too much financial or physical hardship to the point that it will dramatically affect your business, I would get out of the job at all costs. Return the money with a very sincere apology stating that you made a mistake and the work can not be done as agreed due to a misunderstanding in what was expected. Be honest and leave it at that. Then when the designer calls, simply reiterate this and let her know that if they would like to proceed you would be happy to put together a new contract and then price the job as you should have the first time and specify exactly what you are building. The designer will go to the owner and badmouth you, but that is the breaks. No work is better than work that you pay to build and drains your physical and emotional energy. It will look bad but you will live another day and more work will come.

Keep in mind communication is the key. Everybody has to be on the same page and you need to assume that this is your responsibility. Drawings, written contracts with terms and specifications, wood color samples that are approved by the customer, written change orders, written invoices, letters or emails to clarify misunderstanding are the tools that you need to communicate well in this business.

From contributor T:
Never, ever start a job you have mixed feelings about. Even if it is profitable, you will regret it. Most of us do this for a living because we love it; you do those kind of jobs, and you will learn to hate it.

From contributor P:
There's a difference between working with an interior architect and a designer/decorator. The architect generally expects you to work from his detailed drawings, adding little nuances to improve the form; the decorator expects you to use their form and figure out how to build the thing. I've done work with both and never met a homeowner - a blessing, I think.

I prefer working with designers and architects myself, but it's a different business than working with the homeowner. I would schedule a sit down with the designer and work out all the issues. Prepare yourself a comprehensive list of concerns and any upcharges you feel are appropriate. Remember, this designer is selling two people on this job. They're selling the homeowner obviously, but they're also selling you on doing it.

When I have these meetings, I have a list of stuff that I either can't do for the price or just isn't mechanically possible and I also have a list of options. Throw them a bone, include in your options ways to accomplish things for a lower price. The primary thing to keep in mind is that you're both trying to sell the other.

From contributor O:
We have all had jobs that we lost money on; the key is to learn something from those losses and try not to repeat them. As has been pointed out by others, paperwork and communication are going to either save you or not on this project. If the door style is on your quote, then it's a non-issue; if it's not and was a verbal to the designer, that's tougher to fix. The point made above to reiterate what you are building in writing with costs for door upgrades, etc. is very good and might make the job worthwhile. Obviously a note about changes and additional items costing more is important as well. The designer will most likely not like this because they may have promised the homeowner more than they should have for less than you should be willing to get paid.

I just walked away from a job worth probably 100k because of the feeling I got from the client. Felt like running away from the moment I met them and they spent the entire meeting badmouthing the other contractors they had working on the job, while some of them were standing next to us working. That feeling in your gut is there for a reason. You don't have to listen to it if you don't want to, though. We are all doing this kind of work because we enjoy it. When it stops being fun and you start losing sleep, it's time to just get a real job.

From contributor Z:
I would definitely go with your gut feeling. I have paid dearly for all the business mistakes made over the years. Now I follow this motto: Keep it simple, keep it small, and keep it all! This is my best year ever, so far. Very few bad jobs, lots of small to medium easy stuff. I run a one-man, two part-timers shop.

From contributor L:
Keep the job, iron out the details, plow through it. Gain an outside salesperson that is not on your payroll. Cut and process the job with others and push it through. Bill for the extras. I would certainly get it done and bill accordingly.

From contributor N:
'They wanted beaded inset doors and drawers. I said budget allowed full overlay instead."

What do you mean by "I said"? It doesn't matter what is spoken; it matters what is written. The designer oversold the job, not you. It is her responsibility to deal with the up charges. I would be very interested in how you present your front end paperwork. Can you please explain how you operate? What are the steps you take to get to the point of accepting a deposit?

You lost control somewhere along the line. It is time to examine how you operate to make sure this does not occur again. With every customer you must either be at equal ground or you must be above and in total control. Customers can only control you if you let them.

From the original questioner:
Thanks to all for your thoughtful responses. The split between those who lean toward bailing and those advising to stick it out is about 60/40, which pretty closely matches my ambivalence. When asked to bid on work, I prepare a formal proposal and list as many specifications as possible based on the design I'm presented with. Of course this can be done more completely when I generate the design myself. In this case I knew the beaded face-frame approach would not be possible in the price range they wanted and made that clear in my initial proposal, and also highlighted this further when I revised the pricing slightly downward. Despite that, a few days after giving me the deposit, the designer sent me a photo of typical beaded face frame construction saying "this is the style they want." I did hash this out over the phone with the designer (containing my impulse to ask "do you even know what beaded face frame construction is?"), but that's when I came away fearing the owners may expect some other features they are not getting, like undermount slides, when I specified side-mounted slides.

I've built my small business by satisfying my customers, almost always working directly for them and doing the design work myself. I go the distance to ensure they have no reason whatsoever to balk at the final payment. Part of the dilemma is having a designer in between me and the paying customer, and part of it is the competence level of this designer, which I'm sure will leave me doing some of her job. Yes, I can hash it out, and may opt to do so. But I appreciate that many of you support the option of refunding the full deposit as a reasonable business judgment.

I've worked with another designer (ASID member) who is very competent and thorough. We agree on a commission for each project before I submit the proposal, but the homeowner still signs the contract, and it's the homeowner I'm working for. In the troubling case at hand, the designer is marking up my price at will and (I assume) not presenting my proposal with pricing information to the client. This is the first time I've come into this situation, and I fear this separation between me and the end customer could easily turn into a black hole of discontent.

From contributor U:
We have three criteria for good work... It has to be local. We have to already know how to do it. We have to sell it directly to the owner. Whenever we stray from any of these rules, our profit margins suffer.

From contributor C:
It always amazes me how designers will try to maintain a total separation between you and the customer, until that customer decides they haven't received what they were promised, and doesn't want to pay. Then the designer invariably steps aside with lightning speed, expecting you to take the loss. Get a meeting with the customer and iron out the details. It will save the job, and no more sleepless nights.

From contributor N:
It definitely sounds like you got your ducks in order on the front end paperwork to cover yourself. Before you start drawings, it's time to have a chat with the designer. If that goes nowhere, time to contact homeowner directly. Keep us posted. There will be a lot to learn for all on this one.

From contributor S:
I think the operative here is that you have to get control of the project. You need to limit what the designer offers, and what the customer expects. Otherwise you will have one side requesting more and the other side giving it away, and you picking up the tab. Passing on a project is one method of control. I would do my best to make it work, but I wouldn't give away anything. I used to do designer/end user work and remember architects over-promising my offering; they would invariably say, "Oh, let's get through this one; there will be many others that will pay off big time." These are the ones who go MIA when the project is done, and run to the competition.

From contributor K:
Sounds like a breech of contract that the designer gave you a picture of something other than what you agreed to build. That would be reason enough to cancel the contract and refund the deposit. Tell him you will be more than happy to bid the revised project. Bid high enough to either run them off, or make good money. Without speaking with the homeowners, you are in for trouble, in my opinion. Maybe the mistake was not doing that from the beginning.

From contributor W:
Here in this post is ten grand worth of business consulting with great experienced opinions. Kudos to all of us for persevering in a great industry that occasionally causes a headache. Declare a stop and clarify meeting first with you and the designer - what's included, what's not, payment schedule, any and all details, and especially what is the designer doing for her money, drawing approval meetings with the client, collecting progress payments, inspecting work and approving payment vouchers. The markup is not really your issue or concern, if she is doing her job. Sometimes we present an estimate or proposal with the numbers blacked out if it's the specs and text we are interested in. I have heard of huge jobs being deferred to someone else due to personality issues with a customer or designer.

From the original questioner:
You're right on regarding the high value of this forum. I decided to soldier on and start the drawings, only to quickly find the designer made a couple significant mistakes in her own field measurements. (I took mine right after getting the job.) When the corrections are applied, the design starts to fall apart and I'm sure the owner will not accept, for instance, that there's 12-plus inches of dead space on either side of the TV. In her response to my pointing out the field measure discrepancies, she said the owners now would like to see samples demonstrating the difference between beaded face-frame with inset doors/drawers, and full overlay. Followed that up with "and we want everything done by such and such a date." Yeah right, and I'll show her which end of the hammer to hold!

From contributor V:

I would show them pictures of the difference instead of making samples, unless you just happen to have them hanging around. Then, I would also make it clear what the upcharge would be. If they want to upgrade, write it up as a change order and require full payment of the change order before proceeding.

By the way, I take my field measurements before I take any jobs, not after. I may go back and take additional measurements later if necessary. However, I am only willing to pay for my own measuring mistakes, not someone else's.

As an afterthought to the original contract negotiations, I never lower my original price unless the specifications are changed. In other words: "You would like a lower price? What would you like to remove from the project?"

From contributor Q:
Glad to see you found some wiggle room to renegotiate this. A contract is a two way street, and once signing a contract, or accepting a P.O., and financial consideration (deposit), you can't just cancel out by refunding the money unless both parties are willing. You have incurred a legal obligation, and could be sued. Most judges would consider you the "professional" party and thus bear the brunt of the obligation short of the other party being a licensed architect. Results and laws of course vary from state to state, but far too many businessmen think a contract is only binding in regards to getting paid in the end.