Just say no! When is it wise to walk away from a potential job ...

Just say no!When is it wise to walk away from a potential job?Obviously, experience is the best source of information you can draw on to make these kinds ofdecisions. The longer you do this type of work the more you realize not only what the rewards are, but whatthe dangers are. A gut instinct about a certain job or customer takes time to develop. The human learningexperience is trial and error, reward and punishment, live and learn. The HVAC business is no differentthan this basic form of development.Along the way there are danger signals you can watch for.If you spot these signals and avoid the pitfalls your journey has a far greater chance of success in acompetitive and ever changing business. The ability to change is essential in survival of the species as wellas survival of the HVAC entrepreneur.There are several reasons to turn your back on a potential job or customer. They can be narrowed downto a few basic ones however:-Taking on more than you can handle.-Unreliable customers who may not pay on completion.-Little chance of success and proper operation of the system.THE BIG JUMP.There is a fine line between doing something new and sticking to what you know. If we never tried newthings we would cease to improve. If we over extend ourselves however, we may find ourselves in serioussituations that could mean the end of our company. Many HVAC companies have been wiped out by takingon tasks that were beyond their capabilities. If you need to buy expensive tools and equipment and hireadditional help to complete a job that is bid at a competitive level, you may find yourself losing money notonly on the job itself but now stuck with overhead you have no immediate use for. Most contractors at onetime or another dream of the big money jobs out there. It is very tempting to take them on. If you do so, Iwould advise doing it very slowly, building on them as you go. Consider the fact you will usually bebidding against larger companies who may have better cash flow, equipment and employees that can enablethem to compete at this high level. I have found one way to build slow is by doing so with the customersyou already have done work for. As you get to know them and their facilities don’t be afraid to step up andtake on bigger projects they have on the drawing board.If you are in with these companies for an extended period, you may be able to get some of the bigger jobswith little competition. As emergency situations arise you may be able to land jobs at a higher price thansay if they were planned, speced and bid out over a longer period of time.Once you have completed the bigger jobs you know what you are in for and can make a better decision asto whether you want to take them on again at other places and for other customers. Be aware, however,that if you do this with an existing customer and totally blow it, besides losing money, you may lose themas a customer. Perhaps the biggest consideration overlooked when expanding into bigger jobs is the factwhile you are tied up completing them, you may be missing out on all the other smaller jobs you normallydid quite successfully.Many companies not only lost money on big jobs or made minimal profit, they missed out double, bylosing out on good work along the way that they were just too busy to handle. I can’t emphasize thisenough. It is very often overlooked. Generally speaking, there is no easy money out there, manycompanies are competing for it. That’s not to say once in awhile a cushy job will fall into your lap, that’swhat helps makes this business worthwhile, but those are few and far between. As you take on biggerprojects draw on your experience from the smaller ones you normally did. I’m certain most of you alreadyknow that no matter how close you look at a job, there are often unforeseen “Gremlins” waiting in thewings. Things you missed or couldn’t possibly discover until you tore into the job. They exist in almost

every job to some degree. The bigger the job the more you can expect them. If you do not include enoughin your price to absorb that, your profit margin will greatly suffer.I recently bid a job installing some infared heaters. When I went to do the job I discovered the wiring in therigid conduit was shot, burnt and broken. I had to run some new circuits to the heater. Fortunately, I hadenough money in this job to cover it. Customers will assume you gave them a price on the job, completedand operational and they expect that to be the case. Occasionally, situations occur that an adjustment orprice increase can be agreed upon, but that can also create customer relation problems. All this is not to sayyou can’t expand your company into new and larger ventures, just take it slow and cautious building onyour experience and new knowledge. Many very large companies have a niche, in residential, commercial,industrial, new construction or perhaps a very specific field. They often stay within that border growingonly in their customer base.Be wary of certain types of customers.Regardless of what type of work you do, it is important to be assured you will get paid for it. Writtencontracts can specify the job and payment terms but can’t always ensure you will indeed get paid. Acustomer who disputes your job performance and makes things very difficult along the way is a contractorsworst nightmare. Every contractor will run into this more than once during his career. Try to be as clear aspossible when describing the work you plan to do, if they seem disinterested in specifics make sure they atleast realize the overall scope of the work. You can lose a lot of time money redoing things or changingyour original plan.Most problems such as these can be avoided if you are clear and specific on what you intend to do, havingas much in writing also helps a great deal.Still, some customers or jobs are never going to be worth your effort. Even smaller repair jobs, servicecontracts and the like may give off warning signals if you know how to spot them. Customers whoconstantly complain about previous contractors are a good example. I don’t mean legitimate or seeminglyone time issues, I am referring to those that tell you they always get sub par jobs done for them. It is verylikely they will feel that way about you very soon. Some customers will call you for service because theyhave stuck every other service agency in town. I almost always ask people how they got my name. Incommercial service calls to new accounts, I ask who did their work before they contacted me. Theirresponse can tell you a lot.If you see a lot of contractors stickers all over the place, then pretty much every serviceman in town has ago around with these people, you may be next. If you see a poorly maintained facility that has beenneglected over the years, watch out. I don’t mean just HVAC equipment either. Unsafe and older electricalcircuits, plumbing lines with duct tape on them, debris all over the place and other negatives can tell you alot.Working on new commercial accounts especially, keep your eyes and ears open. What kind of business isit, how long has it been established, does it seem like profitable venture, are the phones ringing, do theyhave a substantial amount of overhead, and etc. Many of these questions can be answered in simpleconversations with owners and their employees. I am not suggesting you give them the third degree mindyou, just feel out the place. In my experience, a good company won’t brag or seem to rave on and on abouthow great their business is doing, they don’t have to. On the other hand, a lot of people will try to BS youinto thinking they are the next Microsoft. Fancy, corporate sounding names ending in “industries” or“ventures” do not always mean they are backed by enough capital to continue on for any length of time.These same people will usually hesitate when it comes time to actually sign a check for you. If you see thathappening, take it as a sign to get out of Dodge.Don’t ever be afraid to ask for money. Many contractors don’t like that part of the business and feelinsecure about discussing payment terms or schedules. You are not insulting their honesty by asking to getpaid.

If they seem indignant about paying you, all the more reason to get paid as quickly as you can.If a new customer calls you and can’t meet you at the job but tells you to do whatever it takes, he may alsonot be around when it comes time to pay you. Customers who seem to have no concern about price shouldput up a red flag. They may not care because they are not going to pay you.Working for middle men, general contractors or the like bring on their own set of concerns. Most likelythey will get paid for your work, but you may not. You may be working in well known establishments, butthese well known places are directly liable to the people you are working for, not you. Many contractorshave gone under when there general contractor or middle man either went bankrupt or didn’t hold up theirend of the deal. These types of customers can be very good in generating a lot of work for you butunderstand when things get tight, they will pay you only after they have paid all their own personal debtsoff first.Will this thing ever work?The last major reason for turning down a job is the likely hood it will never function properly based onthe limitations put on you by the customer. If they want you to change say, just the compressor in a severburn out, and you think the whole system needs changed to achieve success, then advising them of that factmay not be enough. Once they pay you, the professional, then it will be your phone ringing with an angrycustomer demanding satisfaction. How soon they forget. Likewise, if they supply you with the equipmentor parts they are not only cutting into the profit margin you need to be successful, they are often implyingthey know what is needed based on knowledge that took you years to achieve. It can be hard to turn downsome of these offers especially if you are slow and need the work, but you have to ask yourself is it right,will it work and as a pro, should I put my name on this job?With the advent of the internet, TV home repair shows and large box stores, the customer is becomingmore informed of the workings of his home or business’ mechanical systems. Be prepared for intelligentquestions and possibly pricing issues relating to your job. But never forget if they knew more than you,then you wouldn’t be there. They need your professional service and knowledge, stand firm on your pricesand what you know to be right.In the end it will pay off for you and your customer.Wrapping it up.In summation here, I only want to add a few thoughts in general.As things go bad, or during very slow periods for a business they will take on work just to pay bills. Oftendoing jobs at extremely low profit margins, for cost or even losing money on them just to pay last monthsbills is a recipe for disaster. It happens in almost all business that eventually fail. It can be very tempting totake a check for a job like that when you are in debt. Be assured you will pay for it later.I am also not suggesting that a business cannot rapidly expand, work for an occasional questionablecustomer, or once in awhile work cheaper or with less margin for error in slow times. Rather, I am merelystating that doing so regularly is not a good business practice. Instead, build a good, strong customer baseand try to avoid the pitfalls of certain jobs and customers that not only lower your standards but can meanthe end of a potentially great entrepreneurial effort on your part.Diceman