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DJ Fischer Posted: Jan 20, 2009 11:41 AM	up front money Hi folks im in the process of buying a machine and starting my own business. i was wondering if anybody out there requires a downpayment from a customer when they sign a contract, or if the full bill is done when the job is done. And if so how much? Thanks. P.S. All the posts i have read have been a tremendous help to me getting goin Thanks again.
richard sucher II Posted: Jan 20, 2009 02:27 PM	Typically, for first time customers we require material costs plus mark-up, taxes and freight prior to starting work. On more than one occasion we have ordered materials and had the job cancelled on us so we are holding the bag. We tell the customer that we will give them lien waiver from supplier showing that money has been received for materials and that they do not have to pay us for the completed work until this waiver has been delivered. This way both parties are protected. Payment for the completed work is due upon completion. It is our experience that when the customer is "invested" up front that things go much better.
SPFer Posted: Jan 21, 2009 11:59 AM	We generally ask for 1/3 up front, 1/3 upon start, 1/3 upon completion. For smaller jobs we do half and half. I have found that contractors do not like to give 1/2 up front. Also, in Mass. it is illegal to ask for more than 1/3. There is a stipulation that says you can ask for more to cover material cost, but most people do not like to give 1/2 up front. With 1/3 up front and 1/3 upon start, we are at least covered for material and labor if there are any issues in getting the final 1/3.

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Comments

DJ Fischer

Posted: Jan 20, 2009 11:41 AM

up front money

Hi folks im in the process of buying a machine and starting my own business. i was wondering if anybody out there requires a downpayment from a customer when they sign a contract, or if the full bill is done when the job is done. And if so how much? Thanks.
P.S. All the posts i have read have been a tremendous help to me getting goin Thanks again.

richard sucher II

Posted: Jan 20, 2009 02:27 PM

Typically, for first time customers we require material costs plus mark-up, taxes and freight prior to starting work. On more than one occasion we have ordered materials and had the job cancelled on us so we are holding the bag.

We tell the customer that we will give them lien waiver from supplier showing that money has been received for materials and that they do not have to pay us for the completed work until this waiver has been delivered. This way both parties are protected. Payment for the completed work is due upon completion.

It is our experience that when the customer is "invested" up front that things go much better.

SPFer

Posted: Jan 21, 2009 11:59 AM

We generally ask for 1/3 up front, 1/3 upon start, 1/3 upon completion. For smaller jobs we do half and half. I have found that contractors do not like to give 1/2 up front. Also, in Mass. it is illegal to ask for more than 1/3. There is a stipulation that says you can ask for more to cover material cost, but most people do not like to give 1/2 up front. With 1/3 up front and 1/3 upon start, we are at least covered for material and labor if there are any issues in getting the final 1/3.

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