At some point in every builder's or contractor's career, they are bound to encounter a difficult client. If you find yourself at this juncture now, it is understandable that you might be ill-equipped to resolve the matter satisfactorily.

After all, “the customer is always right” is a motto that has been drilled into the psyche of American companies. But what happens when the customer is decidedly not right?

Your company has a lot to lose

There are many ways in which your business can take a hit over a dispute with your client, including all of the following:

• Damage to the company's reputation
• Loss of profits
• Delays of service to other customers
• Stress to business owner and employees
• Potential close of business and bankruptcy

Thankfully, none of the above repercussions are foregone conclusions. In fact, you can learn how to deftly dodge no-win situations with difficult clients.

How to mitigate your risks from difficult clients

Sometimes, you need to manage your clients carefully. Sometimes you need to choose them carefully. Here are some tips:

• Avoid know-it-alls: You get it — if only they had the time and opportunity, they could make short work of the job at half the price. Encourage them to do so.
• Offer to fix any errors: You are not perfect. Mistakes are possible. If you erred in any way, it could be expedient and far better to step up and fix the problem than to deny your culpability.
• Be willing to run (not walk) away from dishonest clients: Clients who are eager to breach code requirements or dodge permits are a nightmare waiting to unfold. Ultimately, the contractor is left holding the bag when a client refuses to comply with legal requirements.
• Insist on clear communication: Relying on relayed messages is a recipe for disaster. Any changes in the breadth and scope of the project have to be delineated clearly in writing and signed off on by both the client and the contractor.

Loop in your lawyer when you have a problem with a client

Protect yourself at every step by seeking legal guidance when you see the first indication of a construction dispute with any of your clients. Failing to act can only cost your company money and potentially damage your brand's reputation.