It is essential to pre-qualify all new customers before you bid their projects. Don't waste time electrical estimating for those who do not pay their bills on time. Thorough take-offs, good estimating software and quality workmanship are wasted on customers who do not pay you. This is a simple two-step process which will save you a lot of time and money.
Step#1 - get references - Ask every prospective customer for other contractor and supplier references and call them. Find out if they pay their bills in 30 days, 30 years, or don't pay them at all.
A system that works well for finding new customers to bid work to is to ask other sub-contractors around your current job sites this question. "Who do you do work for that pays their bills on time?". They will definitely tell you who you should work for and who NOT to work for.
Step #2 - run a credit check - Check credit on prospective customers through Dun & Bradstreet. D&B is a company that specializes in providing credit reports on businesses (and a lot more). Obtain a credit report from D&B and call their customer service department. Play 20 questions with them and learn how to read and evaluate credit reports.
It is challenging enough to make a profit without doing jobs for those whom you must take to court to collect your money. Bid work only to customers with a track record of paying their bills on a time schedule that you can live with.
Checking prospective customer references and payment history helps you to build healthy business relationships. It will add strength and longevity to your business!!
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