How to Avoid the Nightmare Client
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If you meet with somebody and you just know you don't like them or they don't like you, like don't work with them. >> Don't work with them. >> Don't jerk. >> All right, welcome, welcome, welcome. My name is Nate Moncrief and I am joined by my co-host Nir Berkovich and welcome. This is the Builder Blueprint podcast. Today we've got a fun topic for everybody. We're going to be talking about uh nightmare clients, nightmare situations, >> how to see them coming before it
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happens, how to look at little things that could be red flags, and adjust and prepare because this is a long process. It's a fun process, but sometimes can get rough. So, we're going to talk about what to look for, what are these nightmare situations, um, and how you can protect yourself as a builder, as a contractor, as a drywaller, whatever it happens to be. Um, and be prepared. >> Right on. >> Yeah. So, I guess we should start with what is a nightmare client? >> Um, I guess we'll start with N. What are
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you thinking? I mean a nightmare client for me is that client is that just they just don't get it from a lot of different angles. It's just I think the first thing is communication. Uh when you're trying to keep some personal space and no one respects it then then we hit some problems. for a nightmare client can be a client that you're emailing once or twice um around the design or on the budget and it's just not coming in. You know, they're just not getting it. Uh and then they they are surprised.
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Another another version of a nightmare client will be the ones that are tracking you in a way. They're going to a remodel knowing that they're going to be as nice as possible early on, then later on they will sue you. That's another option of a nightmare client. Uh or a nightmare client can be a client that the expectations as much as you are trying to communicate your expect you know you're trying to align expectations are not getting aligned after you start. Yeah. So they expect you to be there
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every single minute or they're expecting unrealistic timelines or unrealistic performance. Um I think that's like a nutshell what's a nightmare client is for me. >> Yeah. So yeah, there's a couple different types of of nightmare clients it sounds like. Um, and some of them it's it's non-intentional. Some of it's just like their personality, how they are, and it starts off like, "Okay, I understand it." >> Um, but I think it's because the lack of
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their experience doing construction specifically, uh, because if you've ever been on site to a construction site, when it's under construction, it's not pretty. There's a lot going on. and you can clean it the best you can. Uh, but you're going to see the things that are wrong with the walls, the things that are installed slightly off that need to get adjusted. Um, and a lot of times I don't think people realize that and they they look at it when it's still in the rough phase and say, "Ah, these guys are
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terrible. What is going on? This is a disaster." >> Not realizing that. Yes, we know. >> That's why you hired us to fix these things just and make it correct. >> It's almost like you're looking at the chef cooking steak is not ready and you're like, "Oh, it's not ready." It is not ready. Yeah. Yeah. Yeah. Of course. Yeah. Like of course >> it's just not ready. Ingredients are there but the steak is not cooked. >> Yeah. We will tell you when it's when
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it's ready to go. >> Um so I think as a contractor listening or as somebody who is wants to get into this is like hey I think I could do this. I'm pretty handy. Um to help them out like what are those early warning signs when you're getting into it that that you've experienced? Obviously, we have the three or four different types that we've talked about, but generally you have a pretty good idea getting into a project that this might be a little tough. Yeah, I must say that it it comes
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with a lot of experience. You got to get got to get burnt a couple times uh out of situations to get your senses, you know, up and running. At this point um I can give couple couple red flags that I can notice nowaday after fixing few difficult clients >> um that are going to shift me out of taking a specific project. >> Um but the first thing I'll say you must experience that. I mean you got to be in the industry for a long amount of time. If you're planning to do custom homes
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then you will meet a lot of problematic clients. uh your you know your gain to their personal spaces into their wallets. It's usually very heavy. Uh it's their you know biggest investment and um it's going to come with a lot of emotions. So the first red flag will be somebody that just cannot control his emotions or her emotions and just they're you know meetings are not going not going well. uh slamming doors, fighting, not agreeing on anything. That's the first red flag you should see
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and look for. Um you know um I mean the first thing you got to you got to be you got to be ready. You got to be ready and cushioned to to have couple nightmare clients. Let's start with that. You know, let's start from whatever I'm going to say right now. Not going to help you >> get away with a nightmare client. You got to be there. You got to survive the first five or 10 years of, you know, of your existence as a as a general contractor to know who is a nightmare client. >> Mhm.
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>> So, start with that. I think that's really that's really important. >> Yeah. >> Don't look for a shortcut. >> Yeah. Don't don't expect that everything is going to be fine and and dandy every single time. >> You're hungry sometimes. You want to you want to get a job. You're you're saying, "Doesn't matter. They're paying me 100 grand right now. I will ignore everything I see to get this job to feed my family. Uh, and you got to be you got
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to be enough time in the instrument to to have the leverage to say no >> and that comes with time. >> Mhm. >> Yeah. I think on my end the things I've seen that have turned into later on not necessarily lightning but when there's two homeowners right and whether it's the two spouses or there's two partners whatever happens to be uh one is super active super active in the beginning all over it saying this is what we want the other one is just like yeah whatever it's fine I don't care I don't care
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every time construction starts and >> then the other party is just not getting Right. And and they come in and and they're just like, >> "What is going on? This is not what we discussed. This is not what I wanted." Blah blah blah. And and it's I think Yeah. Well, it's just the absentee partner >> who should be there. They just don't want to do it. And then we get to the point where we're ready and they're usually just jumping in and just confused. It's general confusion. I
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think it brings in confusion in a lot of ways. There's a lot at home that's going on. >> But we talked about with your wife. I'm just kidding. >> No, exactly. But you can't you can't you can't say, "But your wife said this." >> No, you cannot say it. It's very unappropriate. But sometimes I was I'm like, >> "Are you kidding me right now? Are we actually back to square one trying to figure like you know those basics?" >> Yeah.
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>> Uh yeah, it's a good one actually. Remember this no names, right? But our very unpleasant meeting at the office recently with a client that went like a really long way, but the partner was now involved with a lot of the communication and he was so shocked by a lot of things that to be properly communicated, right? >> Mh. >> Um, but as we look as as on on our clients, we look at them as one is to >> two is two. >> Yeah. Right. >> Yeah. No, absolutely. I think if you're
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going to try to look for something that could be a a red flag, I think that's one for sure is just get everybody on the same page early and even if the one partner is saying, "Oh, no, they don't mind. They don't care." They're going to care. They're going to live there. They have things they want. They just don't understand. And and you're probably more involved in thinking about it and you're listening to us. We're talking you through the different things that are
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going to happen. Um, and then they might just be like, "I didn't know there was going to be a portable toilet on my house. This is disgusting. This is ugly." And and that might freak them out. You never know what it's going to be, but it's always something. >> It's al almost like the ones that are easy on the process >> or too hard on the process are a nightmare clients. You want to have the average. >> Yeah. >> Uh even on your contract, like if
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they're going over your contract and like picking up on every little thing, a nightmare. But if they're not reading through it and they're signing a million buck, you know, a million dollar contract with you without checking it out, that's even a bigger red flag. >> Yeah. >> Because, you know, they don't know. So, you must tell them. >> Yeah. Cuz Yeah. As soon as there's any change from that number, then they really start to dissect everything and say, "Why didn't know about this? It's
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not really I should have known this." And it's like, "Well, we tried our best to tell you, but it's like you can't just gloss over these things in the beginning." Um, so yeah, if you are a another contractor who's going to be getting into this, just be as thorough and detailed and open and just repeat repeat repeat the things that you know are going to possibly cause problems later. >> Um, I I think that's your best way to diagnose that and address it. Um, but
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>> also if you're worried about like losing the job by being extremely detailed, therefore being extremely expensive, offer your clients the option to review their other bids or contracts. I think they will appreciate that. Uh, review that with them and tell them they're just missing, you know, 10 or 15 items. Go back to them, get the full number together, come back to me because that doesn't make sense. I think a lot of people will appreciate that and they will put you back in the game of
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winning. >> Yeah. you know, such clients without scaring them off by you being too thorough. Like that's the only way to go. You're always got to push yourself to be as detailed as possible, as transparent as possible, that will just save you nightmare clients. >> Yeah. >> Yeah. >> No, no, I agree. And I think trying to get that that nightmare from becoming a nightmare because sometimes it doesn't need to. Sometimes you are half as at fault for the nightmare as as the client
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is, you know. And I know sometimes as contractors, builders, we'll hear people complain about, oh, well, they're on putting themselves on a pedestal and they're acting as if it's a blessing that I'm working with them. And it's like incredible thing. But if they're a good contractor and they took the time and took on your project, like there you get to a point where you've got six, seven projects going all at once and you don't necessarily need every single project. Um, it's not that the
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contractor is sitting there and they're they're trying to say they're above your work. is just sometimes it just doesn't make sense for them as a team and or it's going to they're going to incorporate it in their schedule, but it's not going to be a project they can be at every single day 24/7, you know, and setting that expectation. If you're a new contractor and you're good, you're going to get busy and you're going to have a lot of projects and you really
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got to make sure they understand that yes, I care about your project. It is the most important thing to me, but so are the five, six other projects I have. They're also the most important thing to me at the same time. And so I need to service them all the same. I know you want your project to be every single day, every single sub comes in immediately after each other and is so efficient, organized that you finish the project. >> Coming back to communication, right? Because it cannot happen. We all agree.
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We all agree that we'll have gaps. We'll have we'll have people missing a day here, a day there. But if you do communicate that, even put it on your contract if you're brave enough, right? But >> if you feel like it, communicate that again and again again. Tell them if you see like a client. Try understand your client. If your client is the one one that cares about the site being cleaned, then explain the site won't be cleaned every single day. But we do have processes. We do we will place, you
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know, trailers outside. We'll make sure all subs are are cleaning after themselves as good as possible. And if the other client is more about timeline, then you should tell them it will never ever be 100% occupancy on your project. However, I'll do my absolute best to get to a point that it's pretty goddamn uh close. >> Yeah. >> Yeah. To a full occupied schedule. >> Yeah. And again, this all comes down to too like who do you want to be as the contractor, right? Do you want to be
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known as the good contractor using good subs who everybody is b busy, right? Because you are using the best guys. You might be more expensive, but you know it's going to be done right and it's going to be done clean and you're not going to have all this back and forth of, oh, he made a mistake. Oh, he has to do this again. Like, if you want to be that contractor, you do have to talk to the client that like, yeah, all my guys are really good, so they are really busy. So, like, I couldn't be on this
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every single day, but they will be here tomorrow, you know. And I think just mitigating it because if not when you do have that nightmare situation of the client who says no this is how I would run the schedule because a lot of people want to put themselves in the contractor's shoe and say well no I know who should be here so this is how you should do it because this is what I would do because my project's the most important and it's like >> it comes to like time and money right I
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think that's what you're saying so t money you're you're scoping it as good as possible and you're reviewing what can go wrong >> you also have options to review even what can go wrong by opening more walls but sometimes they leave there sometimes it's not working that way but as long as you communicate that and you're balding it you know as hard as possible once I open the walls I may going to find a b cde e and that these are you know such items can turn your project to to make a
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different budget or so that that's for the money part so you're going very thorough thoroughly on your on your you know uh over your contract you make sure you you made sure everything is clear but and the the time I got something really I got a punch line always works I'll give you this you know as long as the design will stay in place and no changes will be made along the way then the the duration of the project will stay >> I mean from day one to day 300 I'll do whatever I want okay but I'll be I'll be
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done with your project at day 300 or pretty close to day 300 you know a couple days or a couple day couple days later but in between don't try and hold me accountable for every little thing because sometimes I'll prefer to do something else or I'll do what whatever is best for the house and maybe going to be a different subs come after a different sub then it's not really on the Gant chart right now. >> Uh so look at the thing as a whole because that what you care about right
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you're paying second mortgage or you're renting out or whatever it is right now for you that's a pretty good guarantee and a good one to say. >> Yeah. Yeah. I think if I was gonna say there's any other outside of the lawsuit happy client, sometimes you're just gonna run into it and they will be the nicest person to you until probably three/4ers of the project. Once it gets to that point, suddenly you'll start to get a lot more uh not emails that sound like legal ease, but you can
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sell they're they're setting themselves up to find little holes in the project and what you've said and what you've done and they're trying to trap you. And there's a lot of enttrapment that'll happen that you'll see. You'll be like, "Whoa, wait a second. I I feel like something's off." And if you start to feel immediately anything seems like that's unusual, that's not a normal communication on that with a client or they're bringing in another person
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involved who you've never talked to and never met or >> try and step out at this point. Like I mean >> I mean uh we're always saying that construction is like big loops. You start something, it takes year to finish. If it they you know if if after a month you're seeing all the red flags in the world, save yourself the time and open your doors for a new better client. >> Mhm. Discuss your attorney of course like make please comply with code comply with whatever you got to do. So if you
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leave the project because things are not working out then you are protected. Work work by the book here. But on top of it if you are working by the book and just it's a personality issue that you cannot work out >> step out. >> Yeah. >> Step out early. Money will come from a different place and in >> on a bigger pile. >> Yeah. I think that's also a red flag of self. If you meet with somebody and you just know you don't like them or they don't like you, like don't work with
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them. >> Don't work with them. No jerks. >> Yeah. I think that happens all the time where people are like, "Oh, this guy's crummy or whatever, but it's a big project. I need it. I'm going to make so much money, but like it's not worth your time." >> I agree. >> It just never is. >> Never is. Um, so so getting through like these are the projects and the things that could come up. How do you actually protect yourself outside of having just
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a bulletproof contract, right? Which your state contract is going to guide you in everything you should have. And then you should always, and we always recommend and we work with our own attorney, have an attorney review your contracts, whether it's design work, whether it's just a really simple handyman contract. like if you're protected legally on your end and you're making sure that all of your subcontractors have insurance, all of them are um have their own workers comp, all the other things that you might need
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in your state or your area, like as long as you're running a clean system and your subs are running a clean system, like that's about all you can ask. >> You want the control, right? That's that Nate, I think you're saying have the control. Don't let anyone hold you to a situation you don't want to be part of because you made so many little mistakes along the way and then you're if things will go south, >> you're going to you're going to lose your business. You're going to lose your
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company. >> Yeah. >> Do everything right and then if something comes and it's a red flag and it's not working out, you have all the good reasons to say bye without getting into a big trouble. >> Mhm. >> Or they will change their ways. in different words what I'm trying to say you you won't have the control. >> Uh use good attorneys and involve them early. Don't think you know don't use the chat. Don't do not do not just give them a call. Pay the retainer. Keep
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actually keep an attorney on a retainer that from day one. Okay. Get a good attorney. Put him on on a retainer and tell them as long as you're alive and I'm alive, >> the retainer is staying. >> Yeah. >> I think you know here here's here's a really valuable piece of advice. >> Yeah. Get an attorney on on retainer. Never ask the retainer back if he's good. >> Yeah. >> Keep it open. You'll need them. Couple times a year, guaranteed. >> Yeah. Yeah. I think this is also in the
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legal side something that we've learned. Uh collecting payments can be a nightmare. >> Oh, yeah. >> All the time. It's almost every time collecting payments just because everyone gets uh invoice fatigue. You know, they're like, I'm tired of paying this or I'm frustrated about these things or whatever's going on. I just want to be back in my house. I got to pay this guy more money. I get it. But sometimes it's beyond that. And sometimes it's I'm just withholding
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money to withhold money. And either I don't have the money and I lied about it. I'm going to try to negotiate things out after or I just don't want to pay this guy cuz I don't have to and I think I'm going to beat him in court for some reason, you know. So you you run into both. We've kind of moved to we review our invoices every single week and we try to limit down to two weeks behind sometimes even lower than that for making sure invoices get paid so we can catch it and
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we don't find ourselves working or our subs working which is even worse on projects and then we don't get paid, no one's getting paid and we're stuck. So like how I don't know if there's a way to know that upfront because there there's not really you're not looking at finances. >> I mean >> you you got to be prepared for some you have to be liquid some level that you can keep on managing your projects other projects while missing payments sometimes. Uh I think the law protects
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you and the clients but always the clients a little more. >> Yeah. >> But at the same time you know if you're seeing something like that that's like the biggest red flag. cash is the blood of your operations. Without cash, you're done. You're dying. Then that that's that's not even a red flag. That's like a legal big legal issue that you want to stay out of. And you can explain your clients. I mean, a conversation you're having with your clients. And that's
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again matter of communication early on. You know, transparency and stuff. Hey, I am billing once a month, for example. That's just an an example. I'm billing once a month or I'm billing you every week. I'm trying to pay my subs every week. If you're not paying me every week, these subs are still getting paid and I'm running negative. I I let's get on a habit that you're paying me, you know, within this amount of time. It doesn't matter what the contract is saying. Let's try and keep track of a
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healthy financial relationship because it will help me run your projects faster. it will keep the subs happier, you know, and I always like retain some money to the end for finishes. Like I mean our contracts are we got a heavy amount usually at the end for final inspection and finishes and stuff like that. You can hold money there if I'm not done with our projects, you know, if I'm not done with the project, but along the way to the 90% pay. >> Yeah. And then last 10, the last five,
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we can talk about what is going on. No discounts or anything, but you you're going to make sure I'm completing a project upon my contract and I will as well. >> Yeah. >> Yeah. Yeah. That's financial. >> Yeah. On the financial side. Yeah. And and also I I think there's also don't be a nightmare contractor. >> Correct. >> Just there all these things that the clients can do. You as the contractor can do the same thing and just be a terror to work with. and one of them on
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on billing, for example. Nothing is worse on our end than someone coming in 2 months later and saying, "Oh, I've got 10 different bills from projects that I never invoiced you for and I'm giving to you all at the same time." It happens and you've got Yeah. And you've got you've got 90 90K that you owe me right now. And as the contractor, you if you're not looking at your books, you can see these things coming, but sometimes you don't know when it's going
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to come and you're like, "Well, we just made a bunch of big payments and now this guy's asking for another 90,000." You're like, "What am I going to do?" Yeah. Yeah. So, I think you should be organized and you should know where you're standing, but you should not perform um above contract unless you have a signed change order. That will keep you from all the financials issues that like if you do have you're selling a contract, you have six can lights. The
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client wants two more before you install the two more. I know it is annoying, but you got to develop this habit because two can lights can be also 40 grand of framing. It doesn't matter what it is. Get them to know why you're charging them where in our in your contract is not showing as part of contract. Send them a change order and make sure they sign it quickly. >> Just make it part of your billing system. Everything we're talking about right now is our system. It's what we
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have developed. >> Yeah. It's what we've seen and why we've created that system because we've seen all of these. >> We do not like to charge anyone after the fact. I'm not trying to sell our company. I'm just trying to say how can we leave the industry in a better shape. Uh there's nothing I hate more than a stop coming in three months later. Hey, remember this project? I did more than I was anticipating. Pay me. Like I am not paying you. Are you crazy? Yeah.
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>> Where do you want me to bring that money from? This project is is engraved somewhere, you know, in our books and it's done. >> Yeah. >> I mean, no. >> Yeah. No, that that's the hardest part. And even the same thing you do your clients. If your client asks for something, tell them it costs more money. If it's not in your scope, make sure they know it's not in the scope. It's going to cost more. And that's okay. And if they scoff and don't want
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to do it because they are that nightmare, okay, then don't do it. Don't add it. Just say, "Sorry, I you guys can work on it later." That's okay. >> But don't be afraid, I think, to do that. You're going to be in a much better place. You'll be able to finish projects. God, the amount of projects we get into that contractors have dropped halfway through because the client wasn't even the problem. It was the contractor just not being organized, >> right?
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>> Yeah. So, I think those are the things that are important. I think there's a lot of positives that you run into with clients. You've get tons of people that come in and work with us that they're just both so sweet. Both like even yesterday meeting yesterday. Fantastic. Both of them really engaged and this is everything. This we're now six, seven months into design. still fully engaged, fully talking, communicating about what they want, don't want, working with their other landscape portion going on
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and making sure we're all on the same page. Um, those are great. That's that's best case scenario clients, you know, and we had we had a ton of like lucky lucky us speaking for Soho, we have more happy clients than unhappy clients, you know, um the ratio is just on our favor and we're hoping to keep it that way. Um I guess I think your clients and you know the meeting yesterday it was just clients understanding the process they're like walking walking it slowly you're building it step by step and like
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every good machine it is starting from a good you know plans engineering and then to the parts and pieces their costs the options what kind of seats do you want to have in your car what kind of what kind of steering wheel like what kind of you know audio system you want to have >> we are building it for you but you got to be part of that process. process to drive that freaking car. >> You know that's yours. >> Yeah. >> So if they're walking if they're walking
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the walk with you and it's fun, >> you know it's going to be a good project. You just know it. >> Yeah. You know it feels right. I think that's what you need to look for. Everything that we saw that was a negative a nightmare situation. Something that you can anticipate the opposite of that like look for those people and hold on to them. Be nice to them. get an extra like spend time with them because that's who you want them to refer. >> Focus your energy on the on the right on
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the right place. That's another really good advice like a big one after >> after off after off after off after first one. You got to have reputation time and business to understand nightmare clients just out of experience. >> Second thing is like spend your energy right. You have 10 clients who are trying to sell a project for like two. Don't spend your energy don't divide your energy by 10. >> Yeah. >> Make sure you step back. You look at the clients. look at their personality, the
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value of the sale, and make a decision where your energy is, you know, directed to and be all out there. >> Yeah. >> Be hard. >> Yeah. You're still going to finish the nightmare one on time and be a good company. >> Don't drop that. >> I mean, in terms of selling, in terms of >> But in terms of your personal relationship that you're trying to build with somebody, cuz again, we want to build one person's home. We want to build every single one of their friends
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home after forever. That's the goal is you find that good person and you do whatever you can to say, "Okay, I'm retaining this relationship because it went so well." If you're a great person to me, you're probably a great person to other people and other people great person to you. So, you're probably going to have a lot of good relationships and clients that we could work with um throughout. So, that's going to do it for our nightmare client segment and we are going to move directly into
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something that we're calling the build it or bag it.