1. List all of the work that you are covering in your contract.
2. Specifically state that all work not specifically stated in the contract is to be billed as an extra at an hourly rate plus expenses.
3. When there is a change made by the client during the job, write up a change order and have them approve it (it basically is an ammendment to the contract).
4. When your inexperience puts you over budget, it is lunch time - you eat it.

Thanks for the info. The situation really hasn't degraded to the point of being anal about the original contract. They were happy to pay for the change orders and accomodate the drainage problems. Their builder neglected to install drain tile in the front of their new 1/2 million dollar house. They have been very calm about the cost overuns with the patio as well. I was wondering what would be an appropriate "appology" for these cost overuns. While my inexperience has led to an error in the quotation, the "eat it" value would run near $10,000, more than my little company can afford. I would like to "give" them something, but don't know what or what would be appropriate. Any suggestions are welcome.

What are your cost over runs due to? You said inexperience. Does that mean that mean that it is taking longer to do, or you did not know the cost of the stone, or you miscalculated how much material you had to dig out, or how much base material you needed to bring in, or what?

You have to understand that people make their decision to hire you based in part on price. Someone with the experience to know what the job entails is going to price it right. When you come in with a lower price than the next guy, the client might decide that the savings is worth taking a risk with a less experienced company. How do you think it is someone else's responsibility to pay for your learning experience?

The inexperience goes hand in hand not only with making calculation mistakes, but also working with less efficiency. In other words, it always costs an inexperienced crew more in overhead to do the same work as an experienced crew. The experienced crew will recognize potential problems early, they do much of the work by habit rather than having to do a lot of new thinking, and they have systems in place for the tasks that they do over and over.

another side of this is that the homeowner has to deal with the project taking much longer, having decisions to make every time you run into a problem, and some stress that arises from it. That is even if you stick to your contract price.

The third thing is this. You took, or at least potentially took, this job away from someone who had a legitimate price and the capability of doing the job and made them look over priced in the process. You won't like losing bids to people who can not do the job for the price they quoted either. That is what is known as a "lowballer". A lowballer is more often someone like you who is over their head rather than someone who plans to price too low.

No one should be paying for you to practice and learn to do skilled work whether it is the skill of running a business or laying stone. Experience is education. Education sometimes comes with a bill.

Sorry to be direct, but other people also need to understand these things. Having a business comes with responsibilities. Profit is not a right, you have to earn it.

I did not take this job away from anyone. There were no competeing bids. I am not a "Lowballer". In fact I am the opposite I bid high trying to anticipate unforseen circumstances, and weed out problem clients. In this case it was just to many. Cost overuns were due to hiring subs for the concrete pad, 14 meters crete, stone price went up half way through the job, took longer than expected. I am not some newbie landscaper, I have won awards for design, customer service, and ethics in business. My inexperience with this particular installation was the cause of cost overuns, but the client was aware that I had not installed this type of patio.

What I am asking for is not someones opinion about what happened, obviously I know what happened, I am looking for some positive customer service that other people have used.... I guess there really aren't any good ideas out there.

In this instance, you know your customer best. No one else has met them so can't really give you a specific idea. But, I bet you know what they would appreciate. Some customers, in any business, like to be appreciated more than anything. Give it some more thought and it will come to you!

A tough pill to swallow but if yours is the kind of business where $10,000 is the make or break then you should not go there, in spite of your awards, and I don't mean this unkindly. You have put your future at risk because you do not have the resources to back up a job of this size. You can go to your client and explain how the price of stone went up and how you could not control the sub contractors price and he may be understanding but at the end of the day if you have contracted to do the job in a volatile market without covering yourself you are screwed. What can you do about it? If you have evidence that the price of stone changed to the tune of ten grand and you can convince the client of this then you have no problem. Then, it was you who agreed the subs price and so this is your problem. If you bid high to anticipate problems and you are still $10,000 adrift saints preserve us.

You have learned much more from this experience than from anything we can write about it, so I will agree that it is of no help to you to beat you up over it.

I'd hesitate to appear to be spending profit on this customer. I think it is much more diplomatic and personal if you can do something where you spend some personal time or some kind of personal effort not directly to do with the job. If you have some kind of talent such as sculpting or making a bonsai, that would be good. If you have a connection to get hard to get tickets to a show or sporting event, that would be good. Even a nice bird house or window box made by you is personal and does not look like you are spending their money on them.

Good luck with it.

If I have read correctly the client hs not objected to paying you the $10,000 in cost over runs. Is this correct? And you are looking for a way to thank them for being good customers? How about knocking some off their bill. If $10,000 is too much how about $1,000? You could chalk it up to educational expense while learning new techniques in dealing with the stone patio installation.

If you also do some maintenance you could offer a certain number of hours.

Good luck
jb

Hey JB

Ya they are fine with paying, and ya I was looking for a way to thank them. I had thought about maintenace, what do you think would be appropriate?

I already knocked $1000 off my labour, and no mark up on any materials to do with the patio...

Cheers
Bloomenhagens

How much can you afford? It should be enough that they are fairly pleased, bordering on embarrased, without breaking your bank. Figure what it will cost you to have your people do the work. When the amount hurts a little and you are still making a profit, that's probably about right.

I would be surprised if the gesture doesn't come back to you in more work from them or referrals.

jb

What nobody here has asked is "Are the clients happy with the results - the end product?" If it's an awesome patio after all the setbacks, this is going to make a huge difference in how you deal with the situation, and the clients in the future. I think juniorballoon gets it just right, the gesture to knock a thousand off the price will come back to you in spades if they are happy. And referrals are pure gold. So you've already done the right thing with the bill.

Bottom line, if they are happy (which it sounds like they are), send them a classy company "thank you" note for their business. If they're not so happy, still send them the note (I like the gesture) along with a coupon for 6 weeks of mowing, or maintenance or free plants or whatever your company feels comfortable with or any other token gesture that will help smooth relations. It needn't cost a lot, just the gesture is enough.

If someone has run the bill $10,000 over the budget, they will still be $9,000 over the budget when $1,000 is knocked off. I don't know how any of you would act if a contractor came up to you and said "you know that extra $10,000 I charged you above my contract price, here is $1,000 back as a token of my gratitude for you eating the $10,000 because I'm a small company and can't afford to".

Why does no one sympathize with the consumer here? It is not that I don't feel bad for the landscaper. But he admits that his inexperience caused the overages. The home owner had nothing to do with it and made the decision to do the work based on a contract that the landscaper is not sticking to. It is no different than the home owner saying "I balanced my check book and realized that you did a great job, but we can only afford to pay you 70% of the contract. Oh, and here is a $500 dollar bonus for the hassle."

With the right to be self employed comes the responsibility of it. Making a profit, or breaking even for that matter, is not a right. It is something you earn through knowledge experience, and ability to manage.

A contract is a two way street. It is to protect the consumer and the contractor. As a contractor, you have the advantage of writing that in order to suit yourself before the client has a chance to accept it. All the advantage goes to the contractor.

I hope there won't be any "we need to build professionalism" or "let's raise the standards" posts any time soon.

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