ACT Contractors Forms... From The Paper Side of Contracting.

     You know that contractor from Tennessee I discussed in yesterdays blog post about the length of contractor forms, specifically, the length of your home improvement contract? Well he did end up faxing over a copy of the home improvement contract form he was using for re-siding a house... You know the one that was 8 PAGES long without the federal cancellation form! .... You know, the contract form that cost the contractor a $9000 re-siding job because the customer "needed to look it over" before signing and never called back?

     When I pulled the papers from the fax machine, I expected to see a generic, "try to do everything", contract form that was overly long and "scary" because it included much more than was necessary for home improvement work.  I was right... and I was wrong.

     What I saw was a wordprocessor based form, downloaded from the internet as a contract for all "construction and improvement projects" sold to a Licensed Tennessee Home Improvement Contractor, that had notices and terms from at least TWO other states! and... This same Tennessee Home Improvement Contract, was missing the Tennessee required notices.  It did not even have the the most basic TN notice... the notice giving contact information for the Tennessee Home Improvement Commission (THIC)! 

Why was this Home Improvement Contract 8 Pages Long?

1. It had notices that the creator typed in from not just one, but two other states!

2. Instead of using the correct, home improvement 3-day cancellation notice, a single, small paragraph, the creator incorrectly used a "recission" notice for the sale of merchandise that took up half a page by itself.

3. It had a 3-day AND a (7-day) notice of cancellation form which the form creator included because, in their own words, the seven day notice is a "mandatory contract inclusion in many states". Guess what, the ONLY state that has a seven day notice to cancel is CALIFORNIA, so why add pages for that in an agreement for Tennessee or for any other state for that matter?

4. It had long detailed provisions for things like setbacks, lot lines, excavation, hard earth, things that are completely unnecessary for most home improvement jobs and certainly not needed for re-siding a house.

5. It was created in a wordprocessor program instead of a professional, page layout program... and wordprocessor forms are ALWAYS longer because wordprocessor programs are limited in what they can do.

6. The layout of the contract was very "homegrown" and not well thought out. This is the difference between typing and "typesetting".  For example, things that should have been placed side by side were placed on their own line taking up twice the space. 

No wonder the homeowners panicked when they saw this thing.

    Be careful that the contractor forms you use meet your specific needs. Generic, "one size fits all" contractors forms can cost you much more than the forms themselves. Ask questions and look at samples before you decide on which form to use. And make sure your home improvement contract is not too long for the customer to "swallow" because it contains too much of the wrong "stuff" and too little of the right!

     Have you had an experience, good or bad, with the home improvement contract form you use for your business? Do long contracts matter to the average homeowner?  PLease leave your comments below so we can all learn!

     I talked to a contractor today from Tennessee, who has purchased contractor forms from us in the past. This contractor went out to get a home improvement contract (not one of ours by the way) signed by a customer getting new siding on their home. Mind you, the customer had already ACCEPTED the one page bid (this contractor form was ours) with EXACTLY 5 lines in the scope of work field.

     The contractor made the appointment, sat down in front of both the husband and the wife at the kitchen table, opened up his briefcase and took out his computer generated home improvement contract and laid it in front of them. The homeowners took one look, quickly flipped through the document,  and told the contractor the dreaded words, "we need a few days to look the contract over before we sign."  Why?  Because it was 8 pages long... not including the two pages for the attached, and required, notice of cancellation form! No wonder the couple hit the panic button.

     Put yourself in the homeowners place. How can any contractor possibly justify an 8 page contract when the entire scope of the job took up ONLY 5 LINES? Everyone expects the length of your contract forms to be appropriate for the size and complexity of the work being done! Wouldn't you?

     Even in California, the state that has more requirements on what has to be in a contractor form than any other, the California Home Improvement Contract we sell is only  THREE PAGES. This contractor was from a state with almost NO law requirements and yet the contract form he gave them was 8 PAGES LONG. Geez, I've said it before and I'll say it again. What customer feels good about signing a contract for a simple home improvement job, that is LONGER THAN THE CONTRACT THEY SIGNED TO BUY THEIR ENTIRE HOUSE!

     Does anyone out there remember what a contract form is supposed to look like? You know, a "good old" contract that is written on one page, front and back, with the signature line at the bottom of the FRONT page? Sorry, but that's the way your customers EXPECT the agreement to look like! Flop down a contract "book" in front of them, where they have to go through page after page just to find the spot to sign, says "LAWYER" not "CONTRACTOR", and the first emotion your customer usually feels is FEAR!  BUZZZZZZ, there goes the panic button!

Don't kid yourself into believing that the length of your contract form doesn't matter to the average home owner. In my next post I'll tell you about what I found when this contractor from Tennessee faxed over a copy of this very same contract form....

How long is YOUR home improvement contract? Ever had someone reject it? What would you like to see as far as the layout and content of your "perfect" home improvement contract? Please comment below.

In part one of this post I gave my 2 cents about contractors marketing with door hangers and some of the things and techniques I have learned over the years. I've never kept count, but I am sure that over 35 years, I have probably put over a million door hangers on the front door knob of somebodies home and I didn't do that because they don't work!

     Now I would like to tell you of a great way to get these door hangers delivered "free" and at the same time increase the happiness of your employees. It is simple. When you get a job you send your crew out to do the work... right? These guys are usually paid hourly and are always looking for more ways to make money. Here's what you do...

      On the next residential job you get in a neighborhood of homes, print up 100 door hangers with the address of the customer on the door hanger. Once again, this is why it is great to have contractors forms software that can do this for you.

     On the door hanger, be sure to put  something like "we are doing your neighbors home at XXXXXXXXX, please drive by and see what a professionally (insert your service here) job can do for a home like yours... then give us a call for a FREE inspection & Estimate..." Also, be sure to code these door hangers so when you get a call, you will know where the door hanger came from.

     Now give these door hangers to your crew.  Tell them that ON THEIR OWN TIME, put these on 100 doors of houses that need the same services you are selling and that they are doing. Why should they do this?

     Because you are going to give them a commission for every job you sell from one of these door hangers. BY commission I mean a HUGE commission, (by their standards), for your entire crew. WE used to give them the same commission that are sales staff received for selling the job, 10% of the job price. You can give them whatever you want but there are great advantages to giving them a nice - big - commission.

• First... your guys will know that their commission depends on the customer driving by and taking a look and sometimes talking to the homeowner, so they know the job better be done RIGHT!
• Second... your guys will appreciate the chance to make a nice chunk of change over their wages, for this simple "job".
• Third... doing this will make your guys not only part of production which they are anyway, but will make them a part of "sales" which they always feel left out of. You'll find your workers rooting for the salesperson instead of griping that they do not have enough work and that the "stupid" salesman doesn't know anything about, well, anything.

     Believe me, when you institute this, after getting a commission or two, your crews will BEG you to print up more door hangers! Your job quality will go up. Best of all, your crews will "police" themselves about the work they do, about how the truck looks and about how they look on the job because they know their commissions depend on it!

If there ever was a win - win situation between a contractor and his employees... this is it!

P.S. Be sure to get permission from your customer to use their name and address in this way. This should be part of your home improvement contract terms and conditions!

Have any questions about where to buy door hanger paper or how to make door hangers from your PC? Just put any questions in the comments below and we will be glad to answer them!

I got a call today from a Texas roofer looking for an independent contractor agreement for his sales force. For those of you who have never "run" salespeople in your contracting business, let me explain why this is important.

• First...An independent salesperson is their own boss and their own "company" so they are responsible for all the things that your employees require. Taxes, benefits, medical, disability, workers compensation, vehicle expenses are all ON THEM!

• Second...Since they are independents, you don't have to supervise them the way you do your employees. This is especially useful if you operate in a large area.  When you get a lead in a far away place, you can simply call your independent salesperson in that area to make the sales call.

• Third... Independent salespersons are usually compensated on a commission basis only.  There is no greater motivator for them to sell the leads you give them!

     So you can see why most construction companies particularly those that do home improvement, prefer independent salespeople rather than employee salespeople.

     The problem lies in making sure that your salespeople REALLY ARE Independent! It is not nearly enough to have an "ironclad" independent contractors agreement with them. The way you TREAT your salespeople and the control you place over them has as much, if not more, to do with their status as an independent contractor.

Here are a few considerations to take into account that I learned the hard way, first hand "in the trenches":

     The Government whether it is the IRS, State Tax board, courts or labor commissioner will NOT consider a salesperson independent and will consider them an employee if:

1. YOU SET THEIR LEAD APPOINTMENTS even if they ask you to! You are controlling their time and that makes them an employee.

2. YOU PLACE LIMITS ON WHO THEY CAN WORK FOR! If you tell them they cannot sell the same product or service as yours for another company at the same time, you are controlling their business and that makes them an employee!

3. YOU DEMAND THAT ANY LEADS THEY GENERATE FOR YOUR PRODUCT OR SERVICE IS YOUR PROPERTY ONLY!  You are telling them any business they generate is yours alone and that makes them an employee!

     It is important to word your independent contractor agreement very carefully so your sales force is truly independent. But don't forget, how you treat your sales people and the controls you place upon them are just as important!  Make a mistake here and you may be paying much more than a commission to your so-called "Independent Contractors"!

Questions or comments about this topic?  How do you keep your sales force independent? Please comment below.

     Your contractor forms must take into account the federal and state laws regarding the 3-day cancellation rights of the consumer. Known by many names such as  the "3-day cooling off period", "3-day right of rescission" or "3-day right to cancel", this requirement causes a lot of confusion among contractors. If you do home improvement work, your home improvement contract must comply with this consumer right. 

     DID YOU KNOW that it doesn't matter what state you live in, the Federal Government has ruled that ANY Home Improvement Contract signed in your customer's home must give the customer the right to cancel the contract within 3 business days after they sign FOR ANY REASON. This applies to any job whose value is $25 or more.

YOU DON'T WANT TO DO THE WORK FOR FREE!

So... You work on the job for a week. The customer wanted to cancel the contract the day after they signed but because you did not notify them that they can, they didn't think they could.  A friend tells them about the 3-day right to cancel. They call their attorney and ask him about their rights. He explains their cancellation rights and because your contract does not include the proper notifications, tells them to go ahead and cancel NOW! You have one of two choices.

• EAT ALL YOUR EXPENSES AND COSTS ON THE JOB TO DATE
• TRY and sue them for the money they owe you for the completed work, lose, then eat all your expenses and costs on the job PLUS PAY YOUR ATTORNEY FEES, PLUS you will probably PAY THEIR ATTORNEY FEES!

It is important to understand that the FEDERAL rule regarding the 3-day right to cancel is the MINIMUM rule that every state MUST follow.  Each state can ADD to the minimum federal rule to give even more rights to the consumer... and most states DO!

If you would like to know more about whether this cancellation rule applies to your business and about further requirements of this rule, please click on the following link to download our FREE white paper on the 3-day cancellation rule.