I still remember the first bad financial decision I ever made. My seven-year-old buddy told me that if I lent him a few dollars, he would pay me back ten a few weeks later. Unfortunately, he forgot all about his debt, and I was left without my allowance. Although it might seem like a silly example, bad financial decisions like that one plague adults everyday. I have had my fair share, and so I decided to create a blog dedicated to helping you to invest your money properly. Before you take your hard-earned money and throw it at a cause, think about the advice on my website to make a great decision.
As a contractor, your reputation means a lot. In addition to ensuring you only hire a skilled and professional crew, you also work hard to ensure you deliver the best services. A part of delivering on the promise to your customers is completing your projects on time. However, even though you work towards the goal of timely completion, there are instances when you're unable to control the uncontrollable. A performance bond can help you in those situations.
Financial Protection
When you take on a project, there is generally a contract agreement that you must adhere to. While contracts can include all types of different verbiage and demands, a common insert is a guideline about completion expectations including a date for completion. Within the agreement, there are also likely details that include the penalty for not adhering to the completion guideline. If you miss the deadline, the other party may be able to sue you or withhold a specific portion of your final payment.
A performance bond will deliver for you in this instance because it provides financial protection should you face a financial loss due to an issue that is beyond your control. Additionally, in the event of an unforeseeable delay that causes a performance problem and results in a project that you were unable to complete according to the exact specifications, a performance bond can also help cover you in the event there are financial penalties to pay.
Overextension
Sometimes a delay in payment can result in a problem known as overextension. For example, assume you had one project that was due to be completed by March. Weather issues delayed the completion, and you won't finish the project until June. However, you have another project that you had planned to start in May.
If you don't have enough crew members to begin the new project by May, and the delay will result in a loss for the new client, the performance bond can be used in place to help cover any of their losses so that your company is not held liable. For many large projects, such as those with government organizations or corporations, you may be required to have a performance bond in place as part of the contract.
A performance bond helps you maintain your professional reputation. Make sure you aren't overlooking the option to meet your business's needs. Seeking professional performance bond construction contractor services can assist you with this step.
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