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How would you handle having to close your business?

Discussion in 'Business Fundamentals' started by Plow Babe, Dec 24, 2010.

  1. Plow Babe

    Plow Babe Senior Member
    Messages: 218

    This is sort of an ethics question. Here's the situation:

    • Residential accounts on a flat season rate, paid by the customers 100% in advance, in many cases in the early summer. The majority of these homes are vacation or rental properties.
    • Contractor plows as needed for about eight weeks. Then, the week before Christmas, and also right before two feet of snow falls in four days, he puts a message on his phone basically saying, 'I have some bad news, we're belly up - you'll need to make other arrangements for your plowing. I'll be sending out a letter to explain next week.'
    • Since these homes are not lived in full-time, and the owners are out of state, they have no idea the plowing service has stopped. They, or family, or someone who rented the house for vacation, come out here for Christmas, and find over a foot of snow in the driveway along with a huge chunky ice berm from the road plow.
    • They call their (supposed) plowing contractor, and get this message. Except that after just a few days, the phone gets totally disconnected, not even the message any more. So those people have absolutely no clue what is going on, other than it looks like this guy took their money and left town.
    • Giving him the benefit of the doubt, that some kind of massive emergency came up, not just that he's a low-life snake, here's my question:

    If this were you, and something totally unforeseeable and really major happened that you had to immediately close your doors, how would you go about communicating to the customers?

    My beef is that is was totally unethical for him to handle things this way. At least be man enough to pick up the phone and call your customers to give them a heads up, instead of just letting them find a blocked driveway and having no clue what's going on. And if you can't for some reason make the calls yourself, call a $10/hour temp, and have them make the calls for you, or ask a friend or family member to do it.

    Part of me wants to feel bad for whatever happened to this other guy to make him behave this way, because I want to believe it had to be something terrible to make him walk away. But then today, one of the people I talked to told me they did finally receive a letter from him this morning saying that he was sorry, it was totally his fault, and he just miscalculated his budget. Supposedly, he's going to eventually get everyone paid back the money he took from them.

    Times are tough for everybody, and misfortune can strike anyone at any time. But where are personal integrity and ethics any more in the way people handle things?
  2. coldcoffee

    coldcoffee Senior Member
    Messages: 776

    First off, it's always bad business to prepay in full for anything pertaining to a service. Shame on those who took the bait. Hate to say it, but sometimes we get what we deserve...live and learn. I know, their are SOME, on here who run a legit deal and are conscientious and all of that...but pre- paying for plowing in the middle of summer, is just plain stupid. As far as the contractor, so what...every year it's the same thing on the 11 o'clock news. Buyer beware. An offer like that has scam or incompetence written all over it. What do you think is going to happen to the money, 6 months or so later? Where is the motive to actually show, once the money is spent?

    If I was a competitor, and wanted the work...I'd be locating, calling and leaving notes. If the drive was deep, I'd leave a nice big laminated note at the entrance of the drive, so the renter could find it, and I could get a call of desperation from the owner...just so they didn't have to refund the renters money or waste any time looking for anybody. With that level of panic, you would have no problem striking the deal. Forget the contractor, and forget the prepayment, consider it a penalty for being dumb...live and learn. Also, the promise that guy made to repay is as dumb or dumber, than the first deal that was made...he feels sorry right now because he's in a bad spot, after the thaw he won't feel anything. Sorry for the rant.
  3. 09Busa

    09Busa Senior Member
    from NY
    Messages: 138

    Plow Babe.........Merry Christmas!
    I tend to give the benefit of doubt.........Maybe he did get in over his head. Obviously he should have given well in advance warning to his customers, so they could line up other snowplowing service. He should have been prepared to return any and all money at the time he closed his business. I do not agree with the gentleman above that people were "dumb or they got what they deserve" for paying for a service in advance. No one deserves to lose because they pre paid in good faith. I am paid in full before each plowing season for every contract. Reason being, I do not want to be stiffed at the end of a season by someone that feels that the pushes that I performed did not add up to the agreed upon price I gave before the season. Or they just do not place importance on paying me. I do not need the headaches of trying to collect.
    Then again, I do not spend contract money. It goes into an account and is utilized during the season. I am fortunate as all of my seasonal contracts insist on paying prior to the season, as their service is bought, paid for and they do not have to deal with it at the end of the season.
    Hope the New Year is good to you. You live in beautiful country.
  4. MattR

    MattR Senior Member
    Messages: 218

    Hate to say it because it is xmas and all....BUT I do not feel sorry for this guy, I feel sorry for the clients. The plow guy entered into an agreement for snow plowing for the whole season, even got paid for it. Now I can understand things like health reasons should be the only reason he should not be able to perform his contracted duties that were promised to his clients. It was not health reasons though, it was money management reasons. He accepted the full payment and if that means he goes to the hardware store and buys a shovel and hand shovels each drive to fullfill his contract, so be it.

    As far as benefit of the doubt... His way of informing them of the contract not being completed is his own voicemail message. Followed up after a week or so with a letter being mailed to the clients with only a "promise" of being repaid the money owed to them. If the promise to plow (listed in the contract) could not be completed, do you really think he will actually follow through and repay the money owed? History, even though short in this case, already proves that he cannot follow through on what is promised. So if I was a client of his, I would not expect any money back unless I went through the legal system to try and get some repayment.

    Just my thoughts,
  5. maelawncare

    maelawncare Senior Member
    Messages: 871

    That right there answers it to me. He has no health problems he is just dumb. If you dont have the money to pay for equipment to plow the driveway, you best be getting a shovel.
  6. BlackIrish

    BlackIrish Senior Member
    Messages: 902

    A few years ago a guy up here pulled the same stunt in Dec on thousands of his customers.
    The contractor made up bs excuses and the same promise of repayment, then he moved 6 hours away next summer. I doubt many, if any, got refunds.
    Shady contractors are crooks, plain and simple.
  7. BUFF

    BUFF PlowSite Fanatic
    from FR NoCo
    Messages: 9,078

    Karma will prevail

    P Babe,
    I'm in total agreement with what you had said and then some.
    I'm sure this story will have plenty of tales and drama to come.
    So he claims a mis calculated budget was his demise. I have a hard time believing anyone who has been in bussiness for any length of time couldn't recognize cash flow problems long before he hit the "brick wall". Also with the season the north/central mountains have been having one would have to think there's a somewhat steady flow of checks coming in. I realize he has some pre paid accounts but I find it hard to believe all of them are.
    Ethics, morals and common decency are the fibers that make a "good person" and for those who don't poses these traits will have Karma breathing down there neck.
  8. paponte

    paponte Senior Member
    Messages: 717

    You get the job done, or you call your clients and refund their money. Unacceptable. There should be someone that can handle things until you get back on your feet if your injured. If you just are in debt and spent all the money, shame on you... get the shovels out!
  9. TCLA

    TCLA 2000 Club Member
    Messages: 2,707

    This is a no-brainer. It's unacceptable. He gets zero sympathy for these developments.

    Other than this guy truly being a one man show and in the hospital unable to contact his clients, there is no excuse not informing your customers of this change.

    You just don't do this.
  10. RLM

    RLM PlowSite.com Addict
    Messages: 1,270

    I guess Im the bad guy here, my resi all pre pay, comm are on payment plans. I can assure you ALL the resi moneies are currently spent (but that is about 3% of my budget). I still have commercials that have yet to make one payment & we have had almost 50 inches. So those that say it should sit in a bank, I guess Im wrong. That said we WILL be out the rest of the season though. There are two main reason I still do resi work; loalty to customers that started with me, & extra cash flow at the start of the season from the pre-payments (only way I do resis). If somthing were to happen & I liqidated we have enough invested in equipment they would get reimbursed. After 15 years of doing this Im very comfortable with it, & with the size were at we will be there.....even if/when breakdowns occur.
  11. joestruck

    joestruck Junior Member
    Messages: 10


    ALLof your customers fall into a nice tidy little box that you control? And I suppose you don't take any accounts that won't play by your rules? And you are financially independent from your plow money until the season's contract is complete? I so wanna be you.... Granted the kid screwed up, but he must have felt he had no other option, probably been stealing from next weeks pay for a long time. Last resort ,desperate kind of behavior really.