Contractors, do you charge for job cancellations?

[Deville]

Hey guys,

I need some input on what fellow contractors, business owners charge for job cancellations so I can figure out what is fair for me to charge.

I'm a contractor and it's been a really busy summer. I have been doing about 3 - 7 jobs a day and I have had a ton of last minute job cancels (less then 24hrs notice ) in the last 4 months.

Now normally I don't charge a fee for short notice cancellations unless I physically go to a job site, but I think I need to start as I lost money on Saturday ( and lots of other days ) due to a job cancelling 30 minutes before me and my labor were about to leave for a job, as I have to pay him a 3 hr minimum, plus pay myself etc.

On top of that I have turned down jobs from other clients in the past because I have been booked on a particular day then the job I had booked cancelled and then I'm out all the money I could have made on the other job.

So my question is this, do you guys charge for short notice cancellations when you don't physically go on site?

My income on jobs generally range from $85 to $600 and upto $4k on some larger ones. I was thinking about charging a percentage of a jobs value when they cancel on short notice, maybe 15 - 25% of a jobs total value if everything on the order were completed?

I have no idea if I'm out to lunch on this? Is that to high, maybe to low? I'm I being unreasonable wanting to charge when I'm not physically going to a job site?

Without getting into all the details, It cost me about $300 to make $50 on Saturday as I had 2 job cancels, one over the phone, the other we physically went on site. I charge a flat $50 when I actually go to the job in the city, which even seems a bit low now.

I have probably lost thousands from jobs I have turned down, only to have the job I turned the other down for cancel.

So I'm thinking something like this,
- 25% of jobs total value when cancelling with less then 24hrs notice.
- 25% + $50 ( in the city ) when we physically go to a job site.

What do you guys think?

[nonofyobiz]

I absolutely think you should be charging a cancellation fee. Not sure on the amount but you should prob have a min in there.
Something like 25% or a minimum of $100).

May you should charge the 25% if it's within 24 hrs, and 10% if its within 72 hrs or something. Whatever you gotta do to protect your business.

[ExtraSlow]

For sure you should charge something.

It depends a lot on the business, and the type of work you are taking on, so you have to tailor it to your particular situation. But as a general rule, if you have outlaid money for the job (the 3 hours you pay the guys) then you should be able to recover that from the client who cancels last minute.

Just be aware that nobody likes to pay for work that wasn't performed, regardless of the reason, so you'll piss a few people off with this, no matter how reasonable the policy and charge. If these cancelations are coming from an important client, you may want to cut them some slack.

[C_Dave45]

I'm all for it, I'd love to be able to, but good luck trying to collect. Unless you're able to take a deposit for these jobs (you need special business licensing from City of Calgary) You will have a hard time collecting. What industry? Landscaping?
Does your business accept credit cards? I've been thinking of making that switch, just so that I can take a deposit. Unfortunately in my line of work (construction) cancellations have become an accepted part of the industry.
Really frustrating though. Regularly it's "The jobs ready, you can start Monday"..so off we head to the job, arrive, only to find out the job's NOT ready, so NOW what do we do? Go home.

[AndyL]

Great theory... but like dave... rather tough to implement...

Used to deal with it for an employer, but between negative reputation and just about every time ending up in small claims after they file a visa/mc dispute, it just wasn't worth the hassle of those few pennies...

[Cos]

.

[Type_S1]

I see where you re coming from but as a client i would tell you to eat shit and take me to court. Would waste more time in court then the fee you want to charge.

[Weapon_R]

Unless you're the only guy in the city who does what you do, don't waste your time. You'll never get a call back even if you do collect.

[Deville]

Thanks for the input guys,

Well I am one of 2 or maybe 3 other guys that offer the same services in the entire city, and I do more then the other guys, so I probably have some leverage there. It's construction / customer service related.

I dont usually invoice my customers directly, so all these cancelations are coming from about 3 or so large US companies aka "middle men." that have been using my services for years and I invoice them directly.

They send me alot of work, so yea I'm not looking to piss anyone off, but I just need a fair solution to this bullshit.

[Jason Lange]

As much as it sucks to have cancellations it is going to happen. It is going to be a huge pain to try and collect for what the customer sees as paying for nothing. You have to write it up as a cost of doing business and include these things into your overhead, might have to add a couple percent to your hourly rate to cover these hiccups, as long as that doesn't throw you out of line with your competitors rates.

[KappaSigma]

Just playing the game...

As a customer of various contractors I should charge them for no shows, being late, etc....

[Type_S1]

I agree with the above. 2 way street. You cancel on me when I take a day off work, 25% off your invoice. Only fair right?

[Deville]

Thanks again for all the input guys.

I decided i'll just suck it up and deal with it, I figured maybe it was a normal thing to charge for short notice cancels, but I guess not.

I can always make it up on future jobs. As far as what KappaSigma and Type_S1 said, that would not concern me much as I have never missed or not completed a job in over 6 years of operating, so I say bring on the fees.

[InRich]

So my company collects it materials upfront. after a 10 day period, if the homeowner cancels, I keep the deposit with no refund.