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TOUGH CALL: Big Builder. Big Problem.

As it turned out, just as serious as they were about dominating your market, established builders were equally determined not to lose ground. The result was that Mega Homes’ homes weren’t selling nearly as well as they’d hoped. The only sales they were getting were significantly less than the original listing price. With cash not flowing, something had to give. That something was you.

Despite their assurances that they’d get their account paid in full with you, the fact is that they now have a huge balance that’s past 90 days. After more than 20 years of always paying your bills on time, you’re now past due with your major vendors. Mega Homes’ leadership has told you that they know now what they did wrong in your market and, with spring just around the corner, they’re poised to right the ship in 2015. “If you’ll give us a little more time, our success in your market this year will more than make up for the rough start.” What would you do?


1. Cut your losses. The longer you wait, the less likely you’ll get paid. Tell them if they’re not current in the next 30 days, their account is going to collections.
2. Roll the dice. From their success in other markets, you know they’re good. Extend their credit to the extent you’re able, and help them succeed in your market.
3. Collections. Now. Their lack of payment is putting your company in serious jeopardy. Regardless of the potential upside, it’s time to pull the plug—today.
4. Salvage something. Look at how much they owe you, and offer to accept the equivalent value of completed properties as payment. Not ideal, but better than nothing.

LBM Resources

White Paper: Achieving Growth During a Labor Shortage

This White Paper shows how Epicor can help boost your LBM business. Topics covered: How Did We Get Here? Industry Impact What You Can Do ...

What Would You Do?

Something else?
If you’d take a different plan of attack, email your suggested solution to Rick@LBMJournal.com.
WANTED: CHALLENGING BUSINESS SITUATIONS.
Got a Tough Call of your own? Send it to Rick@LBMJournal.com and tell me about it.

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