Sometimes Bigger Is Not Always Better

I had a meeting last week with an earthworks company, and one of their comments was that I don’t need terms of trade or to be a secured creditor because I only deal with large construction companies! My response was, “remember Mainzeal, Ebert, Orange H, weren’t they also large construction companies? Being a small supplier to a large company doesn’t make you safer it simply makes you part of a larger group, be that a large group that gets paid or doesn’t get paid remains to be seen.

The other main risk I have seen with small subcontractors working exclusively with one large client on a large project is that to secure the work, there are often multiple tenders or bids. To have a good chance of success amongst many competitors, the bids are often at a very low margin with the hope that the quantity of work will make up for the lower margin. In my experience, a low margin is a low margin irrespective of the job size. With it comes the risk of unexpected costs and unforeseen difficulties, making a low margin situation a no margin situation.

Another is that many of the subcontractor agreements that the large companies have the subcontractors sign are blatantly one-sided and because the company may have done hundreds of these types of projects, you better believe that every single clause in the contract is there to protect the company from loss and is based on something that does and has happened. Loss never disappears, it is always experienced by someone, and these companies hire professionals whose entire role is to ensure that it is not the company. 

A few months ago, I read this clause in a subcontractor agreement that a client had been asked to sign ” the contractor agrees that they will not increase the quoted price irrespective of changes made to plans, specifications or requirements”. Agreeing to this would be ill-advised and could be financial suicide. Now I’m not saying that just because a construction company is large, they are in some way unethical or predatory, but in a situation where something unforeseen happens that impacts the potential profit of a job, it is essential that both parties are on the bus, not one driving and one underneath. When one of the largest and oldest companies in New Zealand history can lose more than $100m on a single job, it shows that it can happen to anyone.

Entering into unsecured, unequal agreements to get the work is similar to playing rugby against a team when only one of you has a set of goalposts. They also have the referee on the payroll or getting married, and only one party writes the vows (goodness, only knows what I would have agreed to if my wife wrote our vows!). If the only difference I ever make to a business is making them a secured creditor and helping them enter more equal contractual relationships, I would consider my involvement a success.

CONTACT

Get in touch with us for guaranteed terms and conditions of trade.
Brooke Ahern
Lower North Island Manager

Based on the Kapiti Coast in Wellington, with over ten years of success as a strategic, hands-on leader, Brooke Ahern brings a wealth of experience over his career, driving innovative revenue growth and profitability for his organisations. As Brooke progressed through his career, he developed a reputation for being creative and executing high-profile product marketing and growth strategies. These have significantly impacted an organisation’s bottom line.

After ten years of management experience ranging from business development manager to chief revenue officer for a large company, Brooke joined Debt Free Limited in 2022 after observing and experiencing the difficulties in obtaining and managing business documentation. Brooke saw an opportunity to provide New Zealand businesses with industry-leading credit-checking tools and documentation they need to mitigate/prevent future risk.

Brooke has a proven record of going above and beyond for his clients, and we are excited to have him a part of the team here at Debt Free

[email protected] | 0212262563

Mark McLachlan
Director

Mark is an expert with ten years of experience dealing exclusively with business documentation and credit management processes. He has completed a New Zealand Certificate in Financial Services Level 5 qualification and consulted with thousands of companies, saving his clients millions.

Mark founded Debt Free in 2021 as he is passionate about helping New Zealand companies to succeed and flourish by getting paid their hard-earned money while avoiding typical issues faced in their industry. He has immense knowledge of real-life cases and how tailored credit management processes can prevent debt, address the unique demands of a wide range of industries, and remove risks and liabilities relevant to business activities.

Attending association and organisation speeches, Mark is a respected figure in the credit management industry and is a member of the New Zealand credit and finance institute.

[email protected].nz | 021 283 9027

Add Name
Lorem Ipsum Dolor

Lorem ipsum dolor sit amet, consectetur adipiscing elit. Imperdiet turpis ultrices ut nulla scelerisque. Phasellus posuere tristique suspendisse suspendisse at id blandit. Elit, pellentesque eget metus, massa ut mi pellentesque. Luctus libero consequat facilisi tortor volutpat morbi blandit pellentesque urna.

Mauris semper ut sed eu. Pellentesque metus integer pretium arcu velit aliquet maecenas feugiat. Nec pretium dolor vitae ultricies. Tellus morbi cursus tortor et diam amet blandit varius. Ut nisi pulvinar eget maecenas est pretium. Pellentesque eget amet posuere a faucibus condimentum pulvinar amet. Phasellus sed feugiat dignissim commodo ultrices.

[email protected] | 0212839027

Josh Whitehouse
South Island Manager

Growing up in Taranaki, Josh worked in business consulting for eight years, delivering successful solutions to his clients before relocating to Christchurch and joining Debt Free in early 2022 to look after the beautiful South Island.

Josh is a trusted and valued team member specialising in business documentation, business development, credit management and account management. He has helped the companies he consulted with to implement best practice credit management processes and saved individual clients hundreds of thousands of dollars. Josh entered this space for one reason, his absolute love and adoration for people and a passion for helping others to achieve greatness in business and life.

Josh’s business motto is “there is untapped greatness in all of us. Sometimes we just need a little help to cultivate it.”

[email protected].nz0272722132

 

Rana searle
Office Manager

Rana started as an Office Manager when she was only a teenager and has extensive experience across many different industries, including building, horticulture and healthcare. She is a great communicator, an avid list maker, and always plans things well in advance.

Rana is super helpful, caring and kind and is a perfectionist when it comes to documentation. She has an incredible eye for detail and thrives on getting stuck in and succeeding. Rana prides herself on being people-focused, loves motivating others to be their best and always puts her client’s needs first as she genuinely cares and wants the best outcome.

Rana is always smiling, has a proven track record, is a natural-born leader who loves managing a team and genuinely loves to help whenever and wherever she can. She is passionate about our purpose to make sure New Zealand businesses flourish and grow. Rana loves being able to help the people behind those businesses feel safe and secure to succeed and is a big part of the Debt Free team.

[email protected] | 0212226425