Introduction
There a popular tale about monkeys who have managed to get their hand around food through a hole in a hollow log.
The hole in the log is only just big enough for the monkey to get its hand in but the monkey cannot extract its hand if it is a fist wrapped around food.
Apparently, the monkeys are so fixated in keeping their hand on the food they fall prey to capture by human beings.
I do not know how true this is with respect to monkeys but I have seen numerous cases where subcontractors have fallen prey to processes that have cost them a lot of money because their fixation is on things they need to let go of but they cannot bring themselves to do so.
The most common example
Subcontractors will often fail to take any action in the vain hope that eventually they will get paid as they fret about retentions held by the builder and the outstanding progress claims.
I am about to make some comments most subcontractors will find abhorrent. However, I know what it is like to not get paid or be hanging out because you need to get paid so I do not make these comments lightly.
The point is that in dangerous times such as those we find ourselves in, that is hand in the log behaviour. The sheer number of times I have seen that result in the builder runs up an ever increasing debt only to ultimately wind up the company.
In that regard you should consider the related articles below.
The fundamental concept
The bottom line is that you may have to sacrifice what is a relatively small amount of money to save yourself suffering a far greater loss.
That loss can be anything from increasing amounts of unpaid money through to having to pay money back due to a preferential payment claim.
Do not sit there are hope it will all come good. In time such as these that never happens.
The name of the game is all about minimising loss.
You will need help because many of the things that look like a good idea to the inexperienced or untrained can be fatal to your interests.
The painful tragedies
There is another less obvious way a subcontractors can get their hand caught in a log.
There have been many cases where a subcontractor has run into trouble due to lack of training and knowledge and come to me as a new client.
I have been able to help them limit the damage or get them to a place where they have no debt and can start again.
Because they have not been through the skill and knowledge building process we offer they have not done what they needed to do to make sure they have secured the legal right to get paid. As a consequence, the debt is in reality unrecoverable.
In those circumstances I advise them to leave the old problem behind them, learn the skills they need and use the tools we have to get stronger and make sure they do not lose money in the future.
That strategy has worked very well.
The tragedy arises when subcontractors do not take that advice and go somewhere else to someone (we will call them a dream merchant) who is only too willing to go through the motions of recovering a debt that is in reality not recoverable or is going to destroy the business by consuming the time, money and resources needed to make good money in the future.
I have kept track of those that go to the dream merchants and the outcome has always been that the subcontractor losses more money and often goes into liquidation.
The real question
All too often, subcontractors look at the amount of money they think they are walking away from and want to cling to it for all they perceive it is worth.
The real question is, how much money are they saving by not throwing good money after bad?
Solution
If you have been in business for a few years thinking you have not had any problems or not too many problems without doing all the hard yards of turning getting paid from an interpersonal skill to a legal right then you are:
- In danger of having to take that advice of walking away; or
- Being one of those painful tragedies who is at the mercy of a bill churning dream merchant
The starting point is the survival course. Contact us.
Related articles
Why are project bank accounts being delayed?