#WiseUpWednesday: The Enemy Within…

Our Wise Up Wednesday Guides are here to give Specialist Contractors a quick burst of useful information that will help you succeed in your business life, irrespective of your size or specialisation.

 

Sometimes quirky, sometimes hard hitting, but always guaranteed to make you think and take no more than 2 minutes to read.

So this one is both quirky and hard hitting!

So why raise this now?

Three reasons;

Firstly, I know from current first hand experience that it’s not always apparent when someone, even someone close to us, is hurting inside. Whatever the cause of that mental turmoil they might look absolutely fine on the outside. And construction can be a very macho “get on with it-stop being a wimp” kind of place.

Secondly these things don’t get much publicity, albeit that the Health In Construction Leadership Group’s “Mates In Mind” campaign is seeking to raise awareness, particularly about research suggesting that in the construction sector people could be 10 times more likely to die by suicide than in an accident on site!

Thirdly, it’s current, because you may have seen on the news today that Everton winger Aaron Lennon has been detained under the Mental Health Act by police over concerns for his welfare. The club has said that he is now “receiving care and treatment for a stress related illness”.

The message – it can happen to anyone, young or old, rich or poor, famous or unknown, successful or struggling.

Aaron Lennon’s case, and sports men and women generally, will probably get a lot more publicity than those who work in construction.

So Why “The Enemy Within”?

Recent events reminded me of a passage from “The Art of Happiness” by non other than H H Dalai Lama and Howard C Cutler. A bit out there, but very interesting nonetheless.

“This is very different from an ordinary enemy… This internal enemy, this inner enemy, has no other function than causing us harm. It is our true enemy, our ultimate enemy. It has no other function than simply destroying us, both in the immediate term and in the long term.”

Whilst the Dalai Lama was talking about the inner enemy within ones own mind, it got me thinking about the “inner enemies” within our own businesses. Because, day after day in my work resolving problems for Specialist Contractors I have a unique and objective view of their inner enemies, their very own “Enemies Within”.

The Specialist Contractors Top Ten Enemies Within

These “enemies within” manifest themselves in all sorts of different ways, lack of knowledge, the wrong people, wrong thinking etc. Or a combination of these and other factors, but however they occur, and in the words of the Dalai Lama; they have no other function than simply destroying us, both in the immediate term and in the long term.

So here they are;

1) Not understanding the contract

2) Not agreeing the basics of the contract properly

3) Ignoring contractual obligations

4) Failing to get written instructions

5) Failing to agree additional costs at the appropriate time

6) Not issuing proper notices when being delayed

7) Failing to understand and comply with the payment process

8) Failing to take remedial action when things are going wrong

9) Reluctance to escalate problems to the senior decision maker

10) Not taking appropriate advice sooner rather than later

And these enemies within our business can all too easily lead to enemies within our ourselves.

 

Destroying The Enemy Within

Whilst it may never be possible to completely destroy the enemies within, we can take steps to minimise their impact on us as individuals, and the success of our business. After all if we don’t take action they will destroy us and our business!

Maybe not today, maybe not next week or next month, but they are busy working away, and they have no other purpose…

And please take a moment to consider anyone who might need your help to overcome their own enemies within.

Here; a link to more information about “Mates In Mind”

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#WiseUpWednesday: Don’t Get Angry Get Paid…

This week’s “Wise Up Wednesday” is about a topic close to every Specialist Contractor’s heart; Getting Paid.

If you don’t get paid your business fails. It’s that simple.

Ask any insolvency practitioner and they will confirm that lots of otherwise profitable businesses fail because they don’t collect what’s owed to them.

Of course actually getting paid is sometimes easier said than done, and it’s one of the problems StreetwiseSubbie are most commonly asked to help our members with – and one which I have personally been advising Specialist Contractors about for the last 27 years.

So, don’t get angry, get paid, by understanding these key points;

  • The payment provisions of a contract should be clearly established and fully understood
  • Prior to the Construction Act (where it applies) you had no automatic right to interim payments, and no payment notices, no suspension, no adjudication etc., so despite it being a bit complicated the Act is good news for Specialist Contractors
  • Most standard form contracts have provisions entitling you to interim payments, with clear rules set out as to how these should be calculated and when they should be made

So, first things first please make sure you understand the contract and whether or not it complies with the Act

Be aware that the Construction Act does not apply to all contracts, there are certain types of project to which the Act does not apply, these include supply only contracts, process industry and power generation sites etc. (a full list is set out in the Act and you can download a copy from our web site)

Understanding The Rules Is Crucial

Unless the  Act applies or the contract provides for it, there is no common law right to suspension of the works in the event of non-payment’ therefore, unless there is an express provision in the contract, or the Act applies you will be in breach of contract by stopping work.

However, once you’re certain the terms of your contract provide the right of suspension, then this can be the most effective weapon in the fight to get paid on time.

The  Act and in particular the 2011 amendments introduced some key rules about payment;

  • Contracts are required to be clearly establish the “Due Date” and “Final Date for Payment” – confusingly the Due Date isn’t when the money is due to be paid, but the Final Date is the last date by which you must be paid
  • The act does not preclude lengthy timescales – negotiate them!
  • The contract must also provide for Payment Notices to be issued by the paying party, and if they are not provided there are favourable default provisions

But, watch out because most Contractors will try and bend the rules in their favour by way of their own terms or amendments to the Standard forms such as JCT and NEC/3.

Speaking Of Different Rules

Watch out for contracts that are completely different from the norm. For example, the NEC/3 is so different from any other contract that you will have used previously it is a real challenge.

Please don’t ignore the problems that the NEC/3 creates for you as a subcontractor, and please get advice from the outset, because it really will save you a fortune.

#WiseUpWednesday: Losing The Right to Payment

This week’s “Wise Up Wednesday” is about Specialist Contractors unwittingly losing the right to payment.

It’s hard enough to make a profit when things go well. But when things go wrong and you are delayed through no fault of your own, you are entitled to be paid for that right?

Wrong!

You can lose that right completely under the terms of the NEC/3 contract if you don’t do what you need to do and at the time you need to do it.

And that could cost you £thousands…

Losing The Right To Be Paid Under The NEC/3 Contract

Compensation events are events which are not your fault, and they change the cost of the work, or the time needed to complete it. As a result, the prices, key dates or the completion date may be reassessed, and in many cases the you will be entitled to more time or money.

Examples of compensation events

There is a list of specific compensation events at clause 60.1. The list includes:

  • Instructions
  • Access prevention
  • Failure to provide something e.g. information etc.
  • Actions by the Employer or the Contractor
  • Contractor not replying to a communication
  • Contractor withholds acceptance
  • Unexpected physical conditions

The list is fairly extensive, and you need to know how to ensure you take full advantage, and most importantly, avoid losing your entitlements altogether.

Notification of Compensation Events

The aim of the compensation event regime is for compensation events to be assessed as early as possible at the time they incur and not at the end of the project. For this reason, the NEC/3 form imposes strict notification provisions.

The mechanism for notification depends upon the type of compensation event but crucially, the notification of compensation events may be subject to a time bar at clause 61.3.

Clause 61.3 provides that if the Subcontractor does not notify a compensation event within seven weeks of becoming aware of the event, he is not entitled to a change in the prices, the completion date or a key date.

Depending on the facts and surrounding circumstances, any failure by the Subcontractor to notify a compensation event in accordance with clause 61.3 may operate as a time bar, and you will lose the right to be paid.

Applying the strict application set out in WW Gear Construction Ltd v McGee Group Ltd and Education 4 Ayrshire Ltd v South Ayrshire Council, to the NEC3 form, the wording of clause 61.3 leaves little doubt that a condition precedent is anticipated by the parties, and that means you won’t get paid.

It Is So Different It Is A Real Challenge

Unfortunately the NEC/3 is so different from any other contract terms that you will have used previously it is a real challenge. But it can be a massive opportunity to make money too. But, you have to know what to do.

Please don’t ignore the problems that the NEC/3 creates for you as a subcontractor, and please get advice from the outset, because it really will save you a fortune. And if you fancy learning more about what the NEC/3 is all about, and how it will morph into the NEC/4 please see the panel below.

#WiseUpWednesday:Get It Wrong And It Stays Wrong!

This week’s “Wise Up Wednesday” is prompted by a problem that we see time and time again, and it catches Specialist Contractors totally unawares.

“The Devil is in the detail” is an expression you’re probably familiar with, because when it comes to contracts and the construction industry, Specialist Contractors often find themselves on the receiving end of a colossal amount of detail.

As we all know contracts can be a complex area that leaves us scratching our heads, and the use of Standard Form Contracts should be welcomed. But, in the case of the NEC/3 contract however, the Standard Form just isn’t that “standard”.

What’s Wrong With The NEC/3 Contract?

Unfortunately a contract that was conceived as a “clear and simple document” is not widely understood.

There is nothing onerous about the Standard Form, but unfortunately

  • it is not widely understood
  • it is seldom set up properly, and
  • rarely is it properly administered by the parties

All that makes for problems for you as Specialist Contractors, and the key thing when entering into NEC Contracts, is “to know what you are letting yourself in for.

Even an un-amended Standard NEC/3 causes problems, but we’ve seen contracts that had 80 pages of additional Z clauses, and that isn’t an NEC/3 contract anymore!

Confusing And Unfamiliar

The NEC/3 (and soon to be NEC/4), is full of confusing terminology;

  • activity schedule
  • core clauses
  • options and secondary options
  • Compensation Events,
  • accepted programme,

The list goes on and on.

Get It Wrong And It Stays Wrong

“Get it wrong in the NEC/3 contract and it stays wrong”, said Michael Brown, at our last training session on the NEC/3. And Michael is indeed something of an expert, as he has advised on some of the major sub-contract packages using the NEC/3.

“Subcontractors need to to remember that although all parties should follow non-confrontational procedures, every party “will try to dump risk down the line, when it should remain with those best suited to managing it” said MIchael.

In simple terms, the responsibility for Specialist Contractors is to know what they have to do and when they have to do it.

Unlike other forms of contract, which tend to stay in the drawer, Michael advised delegates that Specialist Contractors should refer to the NEC/3 Contract daily and know their exact position in regard to its provisions at any given time. And if that isn’t happening then you simply are not administering the contract properly.

No wonder that I suggested that by the end of the day, our delegates would have a far greater understanding of the operation of the NEC/3 contract than most Main Contractors!

It Is So Different It Is A Real Challenge

Unfortunately the NEC/3 is so different from any other contract terms that you will have used previously it is a real challenge. But it can be a massive opportunity to make money too. But, you have to know what to do.

That’s why I’m going to repeat two things here;

  • Get it wrong and it stays wrong, and
  • Use the contract every day

Please don’t ignore those two maxims, and please get advice from the outset, because it really will save you a fortune. And if you fancy learning more about what the NEC/3 is all about, and how it will morph into the NEC/4 please see the panel below.

#WiseUpWednesday: Evidence!

This week’s “Wise Up Wednesday” is prompted by a problem that I’m helping one of our Buddies to solve right now, and it’s about a recurring problem that catches Specialist Contractors out over and over again.

Here’s an extract from the email that I sent my client this morning;

“As regards establishing the extent of work undertaken, my advice would be that you cannot have too much evidence. So, the kind of things that spring to mind immediately are marked up drawings, photographs, videos, marked up cable schedules, site records, time records, delivery notes, witness statements etc. 

At this stage we are looking to establish a physical measure, a comprehensive picture of the extent of the work done.”

It’s All About The Evidence!

Or to put it another way, and I quote from a learned source;

“Most cases are won or lost based on the strength or weakness of the parties’ evidence, so it is vital to ensure that as much relevant evidence (both documentary and witness) as possible is gathered at an early stage (ideally before proceedings are even issued).”

3 Crucial Factors Determine Whether You Win or Lose

There are three crucial factors that determine whether you win or lose and please, please, please bear these in mind even before you enter into the contract, and especially when you are doing the work. Because come the end of the job (and you’re not getting paid properly) it will be too late.

The three factors are;

  • the evidence (facts),
  • the relevant law when applied to those facts, and thirdly,
  • the tactics of the case.

Whilst our Consultants are extremely good at the law and the tactics, the most important of the three is the evidence, as very few cases are won without strong evidence to support the winner’s arguments.

Getting the right evidence early is crucial, not only so you can properly assess the strength or weakness of your case, but also to try to persuade your opponent to negotiate an early and hopefully cost-effective settlement.

If you are not sure what evidence to collect or how to collect it, please give me a call on 01773 712116 and let’s talk it over.

Need More Information?

We have lots of resources at your disposal from the free information on our web site, to our specially written guides for Specialist Contractors, to our exclusive LinkedIn Group of 2,192 Specialist Contractors, right through to our best selling Gold Buddy Membership.

(Speaking of which, I’d just like to  remind our Gold Buddies to use their free consultancy time to help you resolve any of your problems. We love helping!)

Do not suffer alone. Come and find out how we are helping Specialist Contractors of all sizes, in all trades, right across the UK.

I hope you enjoyed my Wise Up Wednesday email and that it gave you some food for thought, and I sincerely hope to speak with you soon.

#WiseUpWednesday: If You Don’t Ask, You Don’t Get

As humans, we’re afraid to ask for things;

  • We’re afraid to ask someone out on a date.
  • We’re afraid to ask for more money at our jobs.
  • We’re afraid to ask the tough questions in our relationships.

And as Specialist Contractors we’re particularly afraid to ask for a better deal in our relationship with the Contractors who we work with (please note I said “with” and not “for”).

We’re Afraid To Ask Because We Fear Rejection

Rejection is this unbelievably strong thing that keeps us from getting so much in life. If you experience rejection one time, it is likely to derail you from ever asking for that thing again.

Why is it so hard to overcome the feeling that the tiny two-letter word “no” gives us?

Negativity = Rejection  And It’s Incredibly Powerful

100 people could tell you what a great job you’re doing, but if one person says you are crap, those 100 positive messages won’t matter a jot.

See, on some level, we all just want to fit in. The reason we fixate on things like rejection and negativity is because they make us feel alienated from the rest of the world.

Experiencing rejection on any scale cuts us to our most basic human core.

And that is what Contractors are deliberately, or subconsciously doing to you. They are conditioning you not to ask.

  • Don’t ask for a fair price
  • Don’t ask to amend the unfair terms in our contract
  • Don’t ask for instructions for variations
  • Don’t ask for extension of time or extra costs

Break The Mould – Start Asking

The simple magic to getting anything you want in life is just to ask.

The only caveat to simply asking for what you want is this: make sure you do it with confidence, knowledge, and authority, and put some effort into it.

The four-time Olympic Gold Medallist Jesse Owens put it perfectly:

“We all have dreams. But in order to make dreams come into reality, it takes an awful lot of determination, dedication, self-discipline, and effort.”

 

Effort is truly a secret to success. No one has ever put in an insane amount of effort for something and not gotten some value out of it.

The more you ask for things, in the right ways, the better you’ll get at it. And the better you get at asking, the amount of times you hear “yes” will increase.

  • You’re going to hear “no”
  • You’re going to feel rejected.
  • You’re going to encounter negativity.

But if you truly want whatever you’re asking for, you won’t and shouldn’t give up at the first sign of adversity.

Start repeating these words to yourself: “You don’t get what you don’t ask for.”

And Remember To Ask for Help When You Need It

You are the back bone of the industry and you are entitled to achieve great things for you and your family. But even the biggest and the best Specialist Contractors don’t have all the answers or all the skills.

So, don’t ever be afraid to ask for help.

 

And if you have enjoyed my Wise Up Wednesday, please share it with your colleagues.

 

I sincerely hope to speak with you soon, but in the meantime if you need any help with anything to do with your business, please don’t hesitate to pick up the phone and ask. Simply give us a call on 01773 712116 and ask.

#WiseUpWednesday: Court Action Didn’t Work – Our Letters Did!

Court Action Didn’t Work – Our Letter Did…

And In Just 3 Days!

That’s what I call another great result.

Our Client had employed solicitors and even issued court proceedings in order to recover their £20,276.71 in unpaid retention.

The problem was that the solicitors who drew up the court papers didn’t understand the Construction Act rules regarding retention, and that made it all too easy for the Contractor to defend the action and frustrate the process.

We put an end to the Specialist Contractor’s 2 year wait for their money in literally just 3 days.

So How Was it Done?

This case is typical of why you shouldn’t struggle on alone trying to collect your money, and why solicitors and court action are not necessarily the quickest way to get your money.

In this particular case I applied the rule of 3 that I told you about in a Wise Up Wednesday a couple of weeks ago. Here they are again because, at the end of the day getting paid can often come down to these 3 things;

  • knowing what to say
  • knowing how to say it
  • knowing who to say it to

Knowing what to say in this case, required the application of the Construction Act. In this case the 5 outstanding invoices were actually subject to 3 different contractual ways of applying the Act. As in this case, when it applies, and when it’s in your favour there is nowhere for the Contractor to hide.

Knowing how to say it required not only the correct analysis of the 3 scenarios, but I used the kind of compelling drafting that makes our letters hard to ignore. The new message was loud and clear – we now know exactly what we are doing because we have changed horses from solicitor who hasn’t applied the Act, to Consultant who has applied the Act.

Knowing who to say it to is easy if you have got the first two points absolutely bang on. Because, unless there is a good reason not to, we usually start at the top of the tree. The CEO, or in this case the MD and owner of the £92 million a year turnover company that bears his name.

The #1 Problem for Specialist Contractors…

Payment, is still the #1 reason that Specialist Contractors contact Streetwisesubbie.com, and it’s no surprise because it can be really tough out there, and the rules aren’t easy to get your head around.

So, if you haven’t done so yet, please take a minute to download our complimentary report “How To Get Paid” which you can find below.

 

“How to Get Paid”

And if you haven’t already done so we would like your help to highlight the very real problems that still exist in construction by taking a very quick payment survey;

Please Complete Payment Survey Now

 

Don’t Struggle On Alone

Please don’t stand for late or underpayment, or struggle on alone. That’s what the Contractor wants you to do because then he gets to keep your money.

How do you think the Contractor in this case gets to have over £7 million pounds working capital? If they’re holding back just £20,000 from each retention they should have paid back (and you can reckon that some are a lot more), then that’s only 350 accounts.

See how easy it is for big Contractors to look richer than they actually are? They do it by holding onto your money!

 

How To Recognise It’s Time For A New Approach

Here are a few thoughts on things that might be holding you back and stopping you getting paid. If you’re;

  • Doing the same thing and just hoping for change
  • Avoiding thinking about the reality of your situation
  • Feeling like you made the right decision but there’s still no progress
  • Thinking that asking for help discredits you or your successes

Then it might just be that the fear of change, or your pride is getting the better of you, and actually holding you back from even greater success, and stopping you getting paid quicker and more effectively.

Try Something New

Please remember you can call our friendly team for initial no cost advice on 01773 712116 or email us on info@streetwisesubbie.com, and if you’re one of our Silver, Gold and Platinum Buddies you can use your commercial and contractual consultancy to find an answer. Just like in the case above.

Wouldn’t you prefer to get paid rather than struggle?

 

Whatever level your business is at, and whatever your specialisation I want to encourage you to experience and enjoy a better more profitable, less stressful way.

 

I hope you enjoyed my Wise Up Wednesday email and that it gave you some food for thought, and please don’t hesitate to grab your Complimentary Report at “How To Get Paid” and please take 3 minutes now to complete the Anonymous Payment Survey.