I have just turned down quite a large job after much negotiation via email following the survey. The reason I have turned this customer down is because he was reluctant to pay the 30% deposit or 'first payment' I always ask for. The product requested was Pallmann Magic Oil with a colour and this is quite an expensive outlay apart from the abrasives etc. It would be nice to know how many of you request money up front and what you think of the letter I sent him: Dear xxxxx, There are not only bad contractors out there, there are also bad customers - some who really intend to hold your money back even after the project has been completed to their satisfaction. The main reason for our 30% deposit policy is because I have previously been let down and needed to take court action to recover payment. Another reason I ask for a deposit is due to time wasters and there are plenty of them around these days. Taking a deposit is how successful contractors stay in business and it weeds out those customers who fully intend to hold onto your money as long as they can. A deposit payment also lets the good contractor know that his customer is serious about getting the project started. I do not have a credit account with my suppliers and use the deposit money to pay for the initial materials needed. Many of these materials have a ‘use-by’ date, are unique for each particular job (such as yours) and cannot be returned. The deposit is also required to assign a starting date on our calendar. I have actually turned up for a job without taking a deposit after allocating a full week in the diary only to be informed on arrival that they had changed their mind about having it done! The enforced lay-off for my staff was costly because they still needed to be paid. As you are reluctant to make a commitment by way of a deposit-fee from a reputable company with excellent references, I suggest you find another contractor as we will not be offering our service to you. What do you think chaps?
I ask for 50% upfront. Same as you, if they don't pay, I don't do it. Your letter seems straight and to the point.
Coming froma retail background where all payments were made up front and in full apart from the fitting costs, I still after a long 14yrs in the business find it hard that anything other than at least 50% isn't paid straight away!
Same for me 50% up front on big jobs I can't fund its all moneys for materials upfront & labour paid on completion & I don't take cheques either.
Personally, I don`t normally ask for a deposit. Only do, if I get a bad feeling about it. In 25 years, I think ive had maybe 4 or 5 problems with people paying. Mostly small builders. But I don`t deal with the public much.
As a couple of the boys have said, you are being straightforward and to the point with that particular customer, i can't see anything wrong with it myself, the points you make in the letter are entirely pertinent and relevant to the services you are offering, asking for 30% on a big job is spot on...Some jobs you are just better off without when the customers are being a bit arsey...
Same as me, why take the risk? I think any1 who doesn't take a deposit is mad, the customer could turn round and say sorry I don't have any money never did. Then what do you do?
Most of my work is domestic under £500 and don't ask for a deposit but payment on day of completion. Saying that though I have had trouble before getting full payment. If over £500 I ask for material money upfront to cover it then if the worst happens im only losing my time. Never had a problem getting a deposit when ive asked for one. Think your well in your right to say no if no deposit made.
You just have to remind yourself about what you can lose from the job instead of the work you're missing out on
Only from the start of the last year have I started taking deposits and my dad didn't take any for at least 30 years. Jobs can be 2-5k and we still didn't take a deposit. some would say mad but We haven't had any issues since I've worked with him which is 7 years. I dont know if it helps but we don't really do lower end, the people always have money but i was just starting to get some customers who were paying too late and it really irritates me when they have the flooring in their house and you don't have the money so it's now 50 % up front paid by any means but cheque has to clear then all final payments Are cash or transfer on the day. So far, no problems. How I'm looking at it now is, don't take the job if he won't commit to at least 30% but i May have had a different view before x- mas. Safety first though mate. Why should you pay for his materials upfront.
I always take a deposit to cover all materials. Don't think theres anything wrong with your letter. You've got to cover yourself and if they're not willing to pay to cover the materials walk away.
Wish I could, but I do mostly contract , had one for a large contract in the summer and I had to pay upfront to get the wood ordered and made, so I paid £30,000 and then another £30,000 to get it delivered, then got pay 30 days later, you lot don't know how lucky you are! Lol But then I might make more because of the risk, By having this on your terms it will probably always limit you to domestic, unless you sort out a payment plan with a builder Life's about being fair and your client is also taking a risk and giving a firm they don't know 30% upfront! you could go bust and they won't get there money back, so I think a small deposit for putting it in your calendar and payment when you get the materials on site, then payment when it's finished When I do domestic I ask for 20% deposit! extra 50% when we start and balance on day of completion Think the wording is a little harsh IMO, Don't think you need to give that much information, you don't need to justify it, just say 30% deposit lump it or leave it ,that's your terms if your busy and it doesn't effect your Buisness then leave it as it is, if you find your not that busy then you might need to reduce it,
I generally on domestic dont take a deposit unless its a big job, on my own jobs I weight up the customer and am usually spot on when it comes to working out their character and how to handle them, on a job for a ltd company 75% deposit balance on completion and I also credit check them just to give them that.
By the sounds of it you've gone with gut feeling which is right. In the early nineties when laminate raised it's ugly head a mate of mine's dad had his own business doing laminates . The business really took off but The amount of times him and his uncle had to go back and rip up the job they've done coz the customer refused to pay was unbelievable . They just point blank refused to pay " I've got no money sorry" , me mate said his dad just couldn't let them get away with it so they used to knock back and barge in and start ripping it up . Total waste because there was no click system then it was all glued and therefore skipped.
I'm a very small business compared to you uv, but I know what you mean with contract, I'm doing a contract job now and the plan was 1 block per week but payment every 2 weeks, which was 5k every 2 weeks but they let it run to nearly 5 weeks so we were 12.5k behind.
We take all material money upfront weather it's £100k or £100.. You ain't no charity but as uv said its abit harsh worded ... And don't justify yourself it's you business , your money aswell.. Also I get every customer to sign and we have never had a issue .. Get your terms and conditions tight as a **** **** then you will have no issue... But if in doubt walk away... I would of with that one.. Plenty of work out there
We all start small and build up NK1, builders have contracts that we have to sign,which always trump anything you put in your terms and conditions, but once you get used to them, you can use the same contracts to your advantage, In your case Nk1 next time inflate your price when you qoute but offer an extra 2.5 or 5% discount or maybe 10 if they can pay in 14 days, The larger the sum the more they are inclined to pay early. And if they don't pay quickly then you would be legally entitled to the extra rates This sounds better to a builder rather than your price is x but your terms are 14 days, the people in accounts just let you wait because the buyer has got you down to the rate, and they pay when they pay, But if they think they can earn another 10% then they are more inclined to put it in the contract. This all depends on your relatitionship and how compertitive you have to be to get the job,
