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Paying Up Quickly

Construction company president pays suppliers in 30 days as a means of distinguishing his business from the competition.

september 1989

Would you like to get better service from your suppliers? You might want to take a tip from Jim Ansara, president of Shawmut Design & Construction Co., in Boston. When he started his business seven years ago, he wanted to differentiate himself from bigger competitors that were pursuing a lot of the same subcontractors and vendors. So he came up with a way to win their loyalty. Instead of paying the suppliers when he got paid by the customer, as most contractors do, he promised to pay within 30 days.

Shawmut, with revenues of $40 million, has sometimes had to take out bank loans to make good on its commitment. But as far as Ansara is concerned, the benefits of doing business in this manner far outweigh the costs. The company gets priority treatment from subcontractors -- not to mention attractive pricing. "People know they'll be paid quickly," Ansara says, "and that helps position us in the minds of the people we work with. Besides being fair to suppliers, it's been a very good business decision."

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