Who should we work for and who should we NOT work for? Kevin discusses those that may not be the most beneficial to work with.

I don’t know about you but I’m becoming nauseous over the unending string of CEOs who have deemed it their God-given right to use their shareholders’ money to give themselves interest-free loans, and/or gifts. The arrogance they portray is unconscionable. The whole system was built on the house-of-cards principle. As long as they all stayed smugly within the confines of their corrupt arrangements, life went on as usual. But once that first card was ripped from its base, it all came tumbling down. When I see guys like Kenneth Lay on TV whining about how rough he has it now, I have to fight the urge to blow chunks into an envelope and mail it to him, along with a note mentioning how impressed I was by his wife’s performance on TV crying crocodile tears, and assuring the public her husband would never act in such a dishonest way, and what a great guy he is, yadda, yadda, yadda. It was reminiscent of a former first-lady’s performance assuring the American people her husband faithfully practiced monogamy.

Now, there are allegations against trading houses, investment bankers, stock pickers, Martha Stewart for God’s sake! Say it ain’t so. How can life continue when the girl who has the answer to EVERYTHING is allegedly part of the good-old-boy network? I’m troubled by visions of this self-proclaimed expert on being able to make almost anything out of old curtains, dried leaves and cranberry compote behind closed doors sharing a cigar with her financial consultant. Is that really what “Martha Stewart Living” is all about?

It’s a wonderful drywall world

We surely are fortunate we don’t have to deal with people like this, huh? We happily live in the wonderful world of drywall, insulated from stuff like this. NOT. I’m sure your retirement accounts have been disappearing as fast as mine. And as for all those big houses being built for people riding the Wall Street wave, the tide of reality is pulling them back out to sea. Those monster mansions sitting waiting to be taped aren’t stacked six deep anymore. Those huge additions people were building after cashing in stock that tripled in one year are drying up. Commercial parks are turning to ghost towns in many parts of the country. In Santa Clara County, Calif., alone, there were more than 35 million square feet sitting empty as of the first of October.

As the market tightens, now more than ever it is important to make wise decisions when it comes to choosing who to work for and what jobs you’d be better off turning down. It’s bad enough taking a financial hit in good times when you’re on a roll, but it’s times like these when good business sense can mean life and death for your business. These decisions are not easy to make. We all have bills, and many of us have kids that like to eat every couple of days. Sometimes you don’t seem to have a choice. But it’s always better to not take a job and make no money, than to take one you shouldn’t have and have to pay to finish it. The following is a true-life example of how a bad choice can do you in.

The drywall contractor (let’s call him Fred) gets a call from a new builder. He is new in the area and wants to build two spec homes. Would you, Mr. Drywall contractor, please meet with me and give me a price? The meeting is set and the builder gives our hero a print. The builder tells Fred the print is close to what is going to be built with just a few minor changes. Fred, in good faith, takes the prints home and agonizes over them for an evening, working up what he feels will be a fair price. The builder agrees on the price and they shake hands over any changes that will be made being extra.

The house is started and by the time it is ready for drywall to be hung, the November winds are blowing. As Fred walks the job counting for long sheets, he notices this layout is nothing like the house he envisioned from the print. A quick call to the builder yields a response, “You’re right. We changed it a little more than originally planned, but don’t worry, you will be taken care of. Go ahead and load it.” In good faith, Fred loads the house all 360 sheets. The hangers show up and immediately hit Fred up for more money because of all the high work. Fred agrees and after hooking up temporary heat for them, off to the races they go.

After a few days, and a few bottles of propane, Fred starts stringing tape. He tells the builder he will need to be reimbursed for the propane and the builder says, “No problem, I’ll take care of you.” As he starts the second floor, the builder shows up and informs Fred some walls are going to have to be changed around but, “don’t worry, I’ll take care of it.” Wanting to do the right thing, Fred once again agrees. By this time Fred is getting dangerously close to his bid price and he’s nowhere near being done. Friday comes and he pays the hangers. Fred at this point goes to the builder and asks for some money. The builder informs Fred he doesn’t have any because the drywall draw he just got from the bank went to pay the masons and framers, but don’t worry, “I’ll take care of you.” At this point, Fred has no choice but to finish the job.

The next day, the builder shows up and asks Fred to measure the next house. He assures Fred as soon as he loads it he will be able to pay up. Once again Fred, who believes that all people are inherently good, agrees. You all know what happens next don’t you? Of course, Fred gets burned for the whole enchilada. The builder never had any intention of paying Fred, or any of the other tradesmen either. As soon as the houses were done, this “builder” went bankrupt and burned everyone. All the money was funneled to other accounts in another state, and he and his wife moved into the first house. You see, this wasn’t the first time he had done this. Each time he would just reorganize under a new corporation and do it all over again. He would string everyone along with smiles and promises, and by the time the victims figured it out, it was too late.

It can happen to all of us

You’re probably thinking, “Man, Fred sure was gullible.” And while it’s true Fred did make some bad decisions, how close have you come to this experience in your professional life? I’m sure most of us have come dangerously close! Let’s consider some rules that may help avoid costly mistakes such as these.

First: I never work for someone new without getting a deposit up front. If they can’t pony up when they need you, how good are your chances of getting money when you’re done? Most times, a new builder understands this and has no problem with this arrangement. If he does, hit the door. If he does agree to those terms and burns you for the last half, at least you don’t have to pay for the materials out of your own pocket.

Second: Any bids off of a print are subject to increase due to changes in design. Get this in writing! Never trust a handshake over this one. Even seemingly honest builders claim short-term memory loss when it comes to change orders.

Third: If it’s going to be below 60 degrees F, the job must be heated. If he says heat doesn’t matter, turn down the job, or at least have him sign a release removing you from liability to fix cracks and pops. And before you start the job, agree on who will pay for fuel.

Fourth, and this is a tough one: Don’t get locked into the “next one” circle. It is a vicious cycle that has taken out more than one good contractor. This is the one where you get into one builder so deep, you can’t afford to stop doing his work no matter what. I know guys who are 30 or 40 houses behind in accounts receivable from a single builder. A very dangerous place to be to say the least.

One of the best barometers for sensing a bad apple is your own gut feeling. If you need to check your hand for your watch and wedding ring after shaking hands, it’s a good idea to pass on the work. If he constantly brags how he is the best at everything, and he badmouths everyone else, you don’t have a chance. You will never please this guy, ever!

And remember: Life’s too short to work for crooks!