Blog 001 - Performing the Hat Trick

The “hat – trick” dates back to the early 19th Century when Parisian magician Louis Comte used slight of hand and misdirection to produce the seemingly impossible live rabbit from his own top hat.

Whilst slight of hand and misdirection is more commonly the handywork of the Client, time and again Trade Contractors are expected to perform miracles by producing improbable results or procurement. During this period where Contractor / Developer budgets are squeezed, it is important to be sure your client has purchased a ticket to the magic show before you reveal the magic. The criticality of ensuring proper written instruction, in advance, is more important now than ever. This past week’s headlines have been story after story of contractor / developer lay offs and requests for supply chain savings. At times when the Tier 1’s are looking to tighten their belts and their employees looking to justify their salaries, life can become rocky for the Specialist Trade Contractors.

Remember to stick to the fundamentals, be helpful when you can, but never at the risk of your own contractual position. Specialist Trade Contractors are the backbone of the UK Construction Sector, it is more important than ever that these companies remain capitalised and profitable so they can continue to undertake the complex works, innovate and train the next generation. Following the “… rolls down hill” theory, we will see a lot of Specialists Trade Contractor’s feel the pinch in the coming months as a result of the Tier 1’s squeezing tender prices and requesting rebates and the like.

The average Trade Contractor will report approximately 5-6% profit after overheads and other expenses, to give rebates, retentions or protracted payments terms seriously risks the liquidity of the specialist contracting sector. I would like to see some significant action in the post COVID-19 government administration that dictates fair 30 day payments to the supply chain to help with cashflow and re-capitalise the specialist sector.

After all, without responsible management of the supply chain, we risk a David Copperfield vanishing of the Specialist Contracting industry.

If you want to know more, discuss any payment issues you might be having or get advice on nailing down those instructions, drop me an email.