People often take for granted that when it comes to landing projects, bigger is always better, for reasons that seem obvious: Bigger contract = more money, right? And of course, we would like to believe the illusion that project timelines on big projects somehow have more breathing room built into their schedules (as opposed to small, quick turn around jobs.) And of course, we all seem to think bigger projects equate to greater prestige or credibility being attached to your firm’s resume.
All of it sounds reasonable enough, but there is another side to it. Its called, “Hi, we’re the ‘Big Boys’. Congratulations, you’re now playing with the ‘Big Boys.’ By the way, your lucky to have a project with us. So, on that note, we will decide how much to pay you, and [more importantly] when to pay you.”
My firm currently has several design/build projects with a San Diego contractor, serving one of this town’s huge industrial ship fabricators, and the scenario goes something like this: We [the contractor] pay you [the design firm] when they [’big boys’] pay us. Again, in case you missed it above: ‘they’ are big players. ‘They’ are kind of like *their own country* with regard to the number of people and dollars they funnel through their operation each day. Their attitude is something like: “Take us or leave us. If you don’t like our billing cycle turn-around times, there are a hundred consultants and contractors just like you out there, standing in line to take your place.”
This phenomonon is not unique to architecture or the design professions. My wife distributes bath and body products, and she has shared her experience negotiating terms with large national retailers, and it’s the same story. They’re picky, demanding, and you wait 2 to 3 times as long to get anything from them (like answers to questions, feedback, returned phone calls…) and that list also includes payment of invoices.
Let’s face it, it’s hard not to want the larger projects. But lately, I find myself agreeing more and more with one of my consultants, an electrical engineer and designer, who flatly refuses to take on any project with a client that can’t (or won’t) pay invoices within 30 days, and basically that translates to a practice of avoiding large projects, to put it in his words. This is coming from a guy that has been in business for himself about 2o years longer than I have. Admittedly, when I first heard him make that comment, I frankly thought it was silly. Who wouldn’t want those big projects and “big bucks”?
But now that I have seen the other side of that equation, I realize that starving to death (figuratively, or perhaps literally) waiting for your invoices to be paid is not neccessarily preferable to working on smaller projects with clients that are grounded enough to be willing and able to stick to the terms and conditions of your contract.
And quite frankly, now that I think about it, it seems like the question begging to be asked in this scenario is: “If you’re the big boys, why the hell can’t you pay your bills on time?”
