Deposits anyone????

[Don EMS 14]

How many of you ask for a deposit if your scheduling work more then a couple Weeks out. We just started asking for a 25% deposit if the job is to be done more then a month after its scheduled. We send out the invoice, a envelope w/return address and a letter thanking them for using our services and that if a deposit is not set out within ten days their job will be canceled. Its seems to be working good so far, haven't had any complaints yet. I think its a good way to keep people from backing out the day before you arrive.

[jnoden 15]

I ask for 25% down for most work over $500 and that is mostly for deck work. I have it written in to my customer agreement. It stipulates that the 25% down reserves their date and pays for supplies and is non refundable. I had no problems last year as the first year I implemented it.

[Aqua Pro 22]

My 2 cents..50% down, rest when job is completed and your happy with it. Only had one person last year that didn't agree to it. I do a lot of residential deck/fence jobs. I tried the "no money down" approach but found out that a month straight of rain left me with no cash flow on all those wash jobs.....

[PressurePros 248]

No deposit to schedule work (and I sell it). Thirty five percent due after first day of work (if multi day job) I stress to my customers that mosney is due upon jopb completion and that there is a $50 fee f we show up and cannot work.

[TalcottPressureWashing 14]

No deposit to schedule work (and I sell it). Thirty five percent due after first day of work (if multi day job) I stress to my customers that mosney is due upon jopb completion and that there is a $50 fee f we show up and cannot work.

I was acutally thinking of adding this same thing to my contract. stressing the things that need to be done in order for us start working , windows closed dogs put away that sort of thing.

Have you had sucess with this and have people been understanding about the fee for you not b eing able to work because of something they had done or didn't do??

[Beth n Rod 1,279]

You also have to consider what you are allowed to ask for as a deposit. Be careful. If your state requires licensing (ours does) then you might want to check before you establish your deposit amount. In Maryland, we are allowed to ask for up to 1/3 down. It's important to do this, because if you end up with an unhappy customer who decides to make problems for you, and they say "well, XYZ Company asked for half down" and the law says you can't, it just looks worse for you. Cover yourself and check before you take a deposit. Try your State agency that governs home improvements...they should have your answer....

More coffee....:cup:

Beth

[Jarrod 22]

We don't take deposits. We do require half after the deck or pavers are washed. I don't have time to collect deposits. Usually customers call and accept the proposal. At that point, going to collect is impossible for me. It's hard enough doing 200-300 estimates let alone collecting on 65% of those too.

[RyanH 14]

You also have to consider what you are allowed to ask for as a deposit. Be careful. If your state requires licensing (ours does) then you might want to check before you establish your deposit amount. In Maryland, we are allowed to ask for up to 1/3 down. It's important to do this, because if you end up with an unhappy customer who decides to make problems for you, and they say "well, XYZ Company asked for half down" and the law says you can't, it just looks worse for you. Cover yourself and check before you take a deposit. Try your State agency that governs home improvements...they should have your answer....

More coffee....:cup:

Beth

Stupid government telling private companies what they can and can't charge. I have to pay 100% for items I order online days before I receive them, why should services be any different?

As for the fee if the job can't be completed, that's a good idea. I had a customer who had other work being done at his house at the same time he wanted me out. I was expected to work "around" the guys installing a pool while I was cleaning a roof, and to work "around" carpenters while I was supposed to clean a driveway (their equipment took up 1/3 of the driveway...the "expectation" was that I would return at a later date to complete the other 1/3). He was shocked when my final price included service charges for the 5 trips I made to the jobsite for a job that should have taken a total of about 8 hours. The service fees totaled more than the cleaning job itself. Having that arrangement up front saves both of you in these situations.

[PRESSURE PACKED 14]

It DependS Most Of The Time If There Is No Products Involved...no Deposit Is Required,,however If I Am A Month Out B4 I Can Get To The Job..a Contract Must Be Sign To Prohibit Joe Lowballair From Taking My Money

[PressurePros 248]

I was acutally thinking of adding this same thing to my contract. stressing the things that need to be done in order for us start working , windows closed dogs put away that sort of thing.

Have you had sucess with this and have people been understanding about the fee for you not b eing able to work because of something they had done or didn't do??

Just last night I was watching the local news and they had an expose on a contractor in Philadelphia that collects huge deposits on work and either does nothing or digs a couple footers that won't pass code and then uses a million excuses until people give up. There is no licensing in PA and this is a doorwayd for gypsy contractors and shysters. Just about everyone I have ever talked to has a horror story about getting burned. In my presentation towards the end I talk about well meaning contractors that use one deposit to finance the materials from another job. These guys inevitably get buried by Murphy's Law and someone gets hurt. Since I am selling an experience, not merely a pressure washing job, this adds to the customer confidence.

The majority of my work still comes from new lead generation which means they don't know my company. No matter how professional I am, there is going to be a certain doubt factor. The "no deposit 'til you see what we can do" becomes an effective tool.

I'll talk more about my experience with the program in St Louis.

[John Doherty 126]

I do not pay contractors deposits, period. If you ask, I'll ask why, if you tell me it's for materials, give me the $ amount and supplier name and I'll make a check out to them. If it's for 'expenses' or 'overhead', I haven't cost you anything yet, or if it's, 'just your policy', NEXT.

The chances are pretty good that my house, roof, deck, etc will be here in a month, will the contractor be in business?

[Don EMS 14]

I think the deposit is there to protect the us from last minute cancellations, slow pays and no pays. If your a reputable business you should have no problem getting something down. When we work with builders or large company we go with a Net 30. Residential all require 25% down. It sucks when you show up the day of the job only to be told that they forgot to call you to cancel. Deposits make it less likely for that to happen.

[jnoden 15]

Jarod I never go back to collect the down payment. I get the check/ credit card at time of estimate or they mail it to me. It really helps when you are booked a few weeks out and you want to ensure that the jobs you have lined up are going to be there. Maybe its just me but it is also seems better when I present the final bill and it is not as shocking because they already paid 25%

I had two ocassions last year where customers basically said; Please do not take this personal but I got burnt on making a deposit before and the guy never showed up. I told the one guy that I got burnt before on ordering $300 materials and then the person cancelled. He understood and made the payment. The other guy I didnt feel comfortable saying that and his story seemed legitimate and very unfortunate so i let him slide and he paid it all at the end.

I do show up at their house with a lettered vehicle, company emboidered shirt and hat, company brochure, customer agreement and various company specific forms (not generic forms from Staples) etc and I think that does help to give you a little credibility when asking for a deposit. I am also now licensed in the state. big deal.

[TalcottPressureWashing 14]

Just last night I was watching the local news and they had an expose on a contractor in Philadelphia that collects huge deposits on work and either does nothing or digs a couple footers that won't pass code and then uses a million excuses until people give up. There is no licensing in PA and this is a doorwayd for gypsy contractors and shysters. Just about everyone I have ever talked to has a horror story about getting burned. In my presentation towards the end I talk about well meaning contractors that use one deposit to finance the materials from another job. These guys inevitably get buried by Murphy's Law and someone gets hurt. Since I am selling an experience, not merely a pressure washing job, this adds to the customer confidence.

The majority of my work still comes from new lead generation which means they don't know my company. No matter how professional I am, there is going to be a certain doubt factor. The "no deposit 'til you see what we can do" becomes an effective tool.

I'll talk more about my experience with the program in St Louis.

Acutally what i was referring to was not a deposit but more of a fee. Kinda like they have a huge doberman running loose in the back yard or windows open and the owner is not home in which case I would be unable to do the job that they have contracted . so it would have to be rescheulded because as we all know our time is not free and the job that I could not do that day just cost me .I was thinking something along the lines of a $50 dollar fee if the job cannot done because of something the owner did or did not do

[Curb Appeal 14]

In my proposals for PMs, I always ask for 25% up front to cover "materials and a small amount of initial labor". On really large jobs, I also ask for another 25% halfway through the job. The remaining balance is due "after satisfied inspection but no later than 14 days after job completion". All of this is in writing, signed by the PM.

I've not had any problems collecting this way...

[sflasealcoatinginc 14]

50% down after contract signed for every customer... Contracts mean NOTHING. Try taking someone to small claims court for not paying you on a 1000.00 job itll cost you almost that much and by the time you even get any money it could be monthes to years...ive gone down that road. 50% for everyone and at least if they bail i have my materials covered.

[PLD 14]

Ditto. same %, same explanation. Worked great for me also.

I ask for 25% down for most work over $500 and that is mostly for deck work. I have it written in to my customer agreement. It stipulates that the 25% down reserves their date and pays for supplies and is non refundable. I had no problems last year as the first year I implemented it.

[PLD 14]

No. I do it also, but I have a 100% cancellation rate after trying to collect a "re-trip" fee.

Have you had sucess with this and have people been understanding about the fee for you not b eing able to work because of something they had done or didn't do??

[PLD 14]

I don't have time to collect deposits.

Visa/MC. One call and I have a deposit.

[PLD 14]

check before you take a deposit. Try your State agency that governs home improvements...they should have your answer...

Beth is right. Check you state agency. If they govern such behavior, contact your local UHaul office. The customer's deposit is the least of your worries.

[PLD 14]

Thanks for letting me know up front. NEXT customer.

Your thought process is just not realistic in a residential business environment where cash flow is problematic. Not only does a contrator have materials to cover, but the spot they have reserved for you has tangible value. If you cancel at the last minute, you have cost them real $$$ that they can never recover.

I do not pay contractors deposits, period. If you ask, I'll ask why, if you tell me it's for materials, give me the $ amount and supplier name and I'll make a check out to them. If it's for 'expenses' or 'overhead', I haven't cost you anything yet, or if it's, 'just your policy', NEXT.

The chances are pretty good that my house, roof, deck, etc will be here in a month, will the contractor be in business?

[PLD 14]

I do exactly that. Customer is informed up front. $65 add'l if I show up, cannot work, and must come back. $145 (my min charge) If I show up, can't work, and you decide/ed to cancel.

My results, 100% cancellation upon mention of the fee. 100% non-payment of the min fee. It is worth mentioning that all were rental homes. As a result, I no longer do rentals w/o payment in full up front.

Acutally what i was referring to was not a deposit but more of a fee. Kinda like they have a huge doberman running loose in the back yard or windows open and the owner is not home in which case I would be unable to do the job that they have contracted . so it would have to be rescheulded because as we all know our time is not free and the job that I could not do that day just cost me .I was thinking something along the lines of a $50 dollar fee if the job cannot done because of something the owner did or did not do

[PressurePros 248]

For me, I look at this thing as a whole of my model and projected image. I sell a pleasant experience above selling a pressure washing job. I want the customer to feel no risk. With everything there is risk. I feel I can manage it and provide a benefit which sets me apart, thus I take it on. My analysis on implemeting the program went as follows. I always look at "whats the worst thing that can happen."

1) Little I do requires stocking custom materials. All PW jobs are performed from existing materials.

2) I have business growth oriented margin built into every sale. My service is not for everyone and it does make me the highest bidder usually. I have to build value into what I am selling. No deposit is a selling point.

3) The majority of jobs (at the washing stage which is where I take my risk) are completed in under 5 hours. In a worst case scenario I would lose some payroll and a few dollars in soap.

4) My customers are chosen very carefully. They are not where they are because they are deadbeats or con artists. They don't run out money and look to bilk a contractor out of a house wash.

5) Scheduling issues created by inability to perform work. What good would taking 25% have done me? I can't keep all of it if now work was performed. So I subtract the $50 penalty and GURANTEE the customer cancels the job and now becomes a poison referral. Not worth it.

6) Taking #5 a bit further.. Getting a deposit doesn't mean someone will be more concientous about making sure their water is on unless they are a jerk to begin with. We call to confirm appointments the night before as a gentle reminder. If worse comes to worst we call a few customers and ask if we can come right over instead of the following morning. Something gets filled in.

7) To share the risk with the customer and to cover more expensive mateials such as sealer we collect 35% the first day work is performed. The customers get the peace of mind already seeing what we can do and knowing that their materials for completion are bought and paid for and remain on the jobsite.

If someone were to not pay for a housewash or deck cleaning, my attorney sends them an intent to file lien. Thus far, three years of implementing this incentive has cost me maybe $400 in wages (where we couldn't alternate schedule) and have been stiffed 0 times.

[tony szabo 14]

good post!

In the last 16.5 years I have never required money up front or money down for any size project. I feel this is part of my creditability as a business owner to do as I promise to my customer.

"I don't get paid until your happy with our work" that is what I tell every customer. I want all my customers to feel at ease with me and my business. If I were to tell my customers that I need money down to buy supplies,labor cost, etc they would think that times must be rough for our business, because we need money up front to operate. If I was to ask for money up front I would not use that excusse.

It all works out sometimes we get no checks in the mail for a week and the following week we can count the $$ fast enough.

Keeping the cash flow going is very important and that is what you guys are doing to help run your business, and that is very smart. I sometimes wonder if I should ask for the % down. I just perefer to gain 110% trust when meeting a new customer and that way they will not call someone else for a bid, and they will wait for our quality service we will provide. This has always worked for us.

Every area is different and everyone' s customer's are different which also effects this type of dission.

[Belmont 14]

What about a HOA clean and stain fence job that is over $78K what kind of deposit do you require then?

whats fair? or your industry standard?

We're doing a 3rd down, a 3rd half way, and a 3rd on completion.

[Beth n Rod 1,279]

Another way to look at it, is that when you have to outlay money for materials prior to starting a job, you are using working capital to do it. If you collect a deposit (of an allowed amount) you are eliminating the need to tap into these funds. If you have say two weeks of solid work on the books and can purchase a bulk of supplies at a discount for example based upon jobs booked and deposits collected, to me that is just smart. These are just some points to consider folks. But then in our area, the vast majority of home improvement contractors asks for the deposit. People around here are used to it, and it seems to help other contractors in various fields we know here.

Beth :cup: