I know businesses where you can get business, but because you can’t get paid on time you can’t build a good business, and sometimes you can’t survive at all.
Who doesn’t pay on time? There are exceptions but in my experience – the government, insurance companies, and sometimes general contractors of large projects. When a GC finally pays you, many keep 10% or more of your money as “retainage” for a year. And they make you jump through hoops to get paid, using anything as an excuse not to pay you.
I know doctors hate Medicare and Medicaid because they don’t get paid and when they do it is a fraction of the amount.
And to make it worse, these parties don’t care. If you go out of business waiting to be paid, it doesn’t bother them one bit. I don’t do business like this.
So, as for me, I will never build a business that depends on these parties paying me. They can keep it. I will not be their tool. This is my advice for myself.
(Again, there are exceptions.)
Churches are also notoriously difficult to deal with.
I agree with the general premise of your comments. “Don’t build a business on entities that don’t pay timely. I would comment that Dr’s don’t have to sign up as Medicare or Medicaid providers, many do because they know what they will be paid and all of the reimbursements are transparent. Although, they get paid a fraction of what a private pay or insurance company would pay them, they still make money and part of the issue with the cost of healthcare/sick care is that providers can get reimbursed an ever expanding rate of pay based upon a “usual customary and reasonable” (UCR) fee system. Hospitals are even worse.
This is so true. We have been a subcontractor (cabinet manufacture) for over 20 years. Our best client – direct with the owner. Our worst client – Any GC, and the absolute worst GC’s – commercial/public works. GC’s have it down to a science how not pay your invoice. THEY DON’T CARE. Call any GC AP dept, it’s crickets, no response. My wife worked for a GC. She got to see all there shennigans. They were trying to get a bond, so they were holding onto funds, not paying the subs so there bank account looked better. We have had projects go 180 days, it’ was insane. We finally wised up, changed our terms and front load. If they don’t like the terms, we won’t do the project, non-negotiable. There is plenty of work out there. You definately touched on a sore subject for a lot of sub contractors. Thanks for talking about this.
We won’t work for the government ever again after they strung along a six figure project back in 2015 and we couldn’t get any payment until it was 100% completed and signed off to their stupid corrective liking. We also used to do utility work and they don’t care at all about you and make you jump thru many hoops. We were like puppets on a string to them as I liked to call it.