Everyone always talks about the cowboy builders, but what about the cowboy customers? Recent, research has revealed that up to 3/4 of small and medium-sized companies are left suffering due to ‘cowboy clients’.
Demanding extra work for free and delaying payments, nearly three-quarters of worker see ‘cowboy clients’ as a serious issue. According to the Federation of Master Builders, almost a quarter of companies have had to wait over four months to receive payment from a ‘cowboy client’. And, less than a third were paid within the typical 30-day timeline. This has consequently left two-thirds of companies facing a late payment. And not only that, they then have to deal with the knock-on effect that comes from this too.
The Federation’s research found that in fact, 30% of companies had to delay payments to a supplier because of this. An additional 20% also added that late payments had even had an impact on their confidence. Specifically, it left them without the confidence to try and grow their business.
This isn’t the first piece of research to highlight the issue of late payments either. Instead, other research has also revealed that builders are actually owed billions of pounds due to late payments. Take a look at the full report here.
Alongside this, further financial issues included having to borrow additional funds from lenders and/or banks. Some companies were even left unable to pay their workers. And 4% had to fire some workers to cover the costs. Alongside this, 8% of companies revealed that they almost went out of business!
All due to late payments, the Federation’s Director of External Affairs said: “There are so many horror stories of people being duped by cowboy builders.”
“However, our research shows that there’s a flip side to this story with three-quarters of small construction firms being hampered by cowboy clients.”
“Typical cowboy client behaviour can include a demand for the builder to complete tasks not included in the original brief or quote and for no extra payment.”
“The worst type of cowboy client seeks to delay or withhold payment on spurious grounds, for instance by discovering make-believe faults.”
“Fewer than one-third of builders are always paid within the standard period of 30 days and this is completely unacceptable.”
“Late payment is having a direct impact on the ability of construction SMEs to grow and prosper.”
“We strongly recommend that builders and clients do everything they can to protect themselves by using a written contract that includes an agreed payment schedule.”
“Clients rightly demand a high level of service from their builder but homeowners also need to keep their end of the bargain by paying on time.”
So what do you think of this? Have you had trouble with ‘cowboy clients’? Should more be done about them? Let us know what you think in the comments below.