Used to handshake deal everything, now I get it all in writing

For the first 5 years of my concrete business I did everything on a handshake and a smile, lost about $12,000 on a job in Leduc back in 2019 when a guy just stopped paying after we poured his driveway. Now I make every client sign a contract with payment milestones before I even drop gravel, way less headaches. Anyone else have a bad experience that made them change how they do business?

3 comments

3 Comments

mary_foster921mo ago

Read an article recently about this exact thing, said something like 40% of small business owners get burned on verbal deals at least once. Your Leduc story sounds familiar to one they mentioned about a landscaping company that lost a whole season's wages on a handshake. Contracts are just a way of saying "I value my time and materials" without having to be a jerk about it. Glad you found a system that works, nothing worse than doing good work and having to chase your own money.

stellaa6919d ago

Honestly, that 25-30% still really bothers me because it means out of every three handshake deals, one of them is probably going to go sideways. I'm curious though, do either of you think the type of business matters a ton? Like a landscaper or contractor gets burned way worse than a freelance graphic designer because there's actual materials and time on the line.

patriciah511mo ago

The 40% figure sounds high to me, I've seen different numbers. Most surveys I've come across put it closer to 25-30% of small business owners who get burned on verbal deals. Still too many, but not quite half. I get what you're saying about contracts being a way to show you value your time though. That's the part people miss, they think contracts mean you don't trust the customer. Really it's just protecting both sides from bad memories or misunderstandings down the road. Your point about not having to chase money is key, that stress alone makes the paperwork worth it.