Wise Up Wednesday: Safeguard Against Construction Risk
How Much Risk Are You Prepared To Take?
Business is a risk we all know that right? You need to safeguard against construction risk.
There is no business that does not involve risk of some kind. But how much risk are you prepared to take and do you understand the risk you are taking?
Here’s A Hypothetical Example – Please Humour Me I Will Explain
Let’s say that the job or task or contract I want you to undertake is running across the road. I said it was hypothetical, so please bear with me.
And let’s say that the reason I want you to run across the road for me is that I can’t do it myself. It doesn’t matter why I can’t. Just accept that I can’t.
And anyway it’s actually something you are very capable of doing.
So which road, and what’s in it for you?
A Safe Way To Earn £1,500
So, here’s the deal. It’s a quiet stretch of road, so quiet in fact it’s the UK’s quietest, it’s the A897 in the Scottish Highlands and not only that but you can do it at any time to suit you.
And if you do that for me I will reward you with £1,500.
“Yeah, count me in, I can do that for you, no problem. It’s going to cost me a few quid to get there to do it, but a great return.” I hear you say.
Ok, great stuff, agreement reached, followed by task successfully completed and profit earned.
Would You Like Another Go – This Time It’s £3,500…
That’s right it’s a mate of mine who wants you to run across the road for him.
Bigger reward of course, and it’s just running across the road again. So you will be up for that won’t you?
After all you’ve just made some money from running across the road, what could be simpler than doing it again?
It’s a bigger reward of course, but that’s because it’s the M1.
“It’s a bit trickier obviously, but OK, I reckon I can do that no bother”, I hear you reply.
Oh, one small point, my mate does things a little bit differently. It is the M1 after all…
You will just need to wear ear defenders is that OK?
“Yeah OK if you say so.”
And a blindfold, but it is three and half grand after all…
Oh and he is a bit picky about the time he wants you to do it. It must be at peak time in rush hour traffic!
If you are still interested at this point, you are much braver than me or plain …
In all probability, you are going to say; “no count me out taking that amount of risk is just nuts.”
The risk is real. You can see what’s likely to happen, and you know that taking that much risk is simply crazy, irrespective of the potential reward.
Let’s Come Back To Reality
Let’s substitute the “M1” for that bigger more prestigious job, and “my mate” for an unscrupulous Contractor.
And the “peak time, ear defenders” and the “blindfold”?
They are his terms and conditions. it’s not as obvious as ear defenders and a blindfold. But, the risks are just as real…
You see the Contractor is trying to transfer as much responsibility and risk as he can onto you. He will stitch you up financially. He doesn’t care if you get hurt.
You should not simply accept the Contractor’s terms and conditions!
You should not be oblivious to the risk involved, even if it is not so obvious.
Checking For the “Peak Time, Blindfolds” and “Ear Defenders”
Next time you find yourself in line for a big job, just think;
M1 – “peak time, ear defenders, blindfold”.
If you can’t see them because they’re camouflaged in a mountain of paperwork then you might need someone to point them out to you.
Of course there may be times when you have to take a commercial decision to accept some onerous terms and conditions but if you don’t check, accept what you’re given and it turns out that it’s; “peak time, blindfold and ear defenders” – then good luck to you!
Safeguard Against Construction Risk. What You Can Do.
I hope you enjoyed this week’s Wise Up Wednesday.
If you are in any doubt about how to identify, manage and safeguard against construction risk, or don’t know whether or not the terms and conditions are onerous, then please take professional advice.
StreetwiseSubbie’s Nationwide Network of Consultants are experts in helping you to deal with such matters.
If you need help, you can call us or email us and there is no charge for initial advice. You can email me here or call us on 01773 712116.
Once again thank you all for your support.