do u charge a down payment on larger jobs like a service upgrade, addition.etc
if so what %

We never ask for any money upfront. On large jobs we do set up a draw schedule, but nothing upfront. If we think the customer is too risky, we don't need the work that bad. I'd rather not have the work than to have a bad check.

I've gotten money up front on unknown customers. I could get stuck paying a bond, permit fees, buying material, scheduling utilitie work, and the run around waisted just cause they got the other guy to beat out my price after the work was scheduled. I never lost a job when I got money up front. Once they put down money I think they quit shopping for the job. With out the down payment some people will have it done by another company and not even call to cancel. Special order things I shold get the cash. Have we all got stuck with non-reteranable things. Even things that can be returned don't allways. Then you end up with funny can trims or combo devices in brown. For a service we will ask for $200 to cover the above expences before work is started.

Tom

50% up front with the balance upon completion. Special consideration for small jobs, established customers. Comercial and goverment entities have their own set of rules and sometimes I don't feel like playing with them. In the past I've gotten involved in some rather large projects and although on paper the profit line looks good, after getting into the 90 day cycle it doesn't seem worth it to me, once the job is finished the money they have in the bank is no longer theirs, it is MY money in their bank account and I want it in mine. I'm not solvent enough to be financing upgrades for others.

I've read many consumer directed articles advising people not provide much of a down payment to contractors but I've never seen any where the contractors interest is taken into account.

One kitchen design center in my area has a policy of getting 50% at the acceptence of the contract, another 40% upon the actual start of the job with the remaining 10% upon completion. Their attitude is "That's our policy, If you can't agree to that, go somwhere else".

This company is one of the best in the area to do work for, the subs are paid immediately and I've not had too many "discussions" about my bills. These guys drive new Lexuses and Lincolns every other year and take several vacations a year so they must be on to something.

FRANK

CSLB in CA limits us to 10% or $1000, whichever is less. I believe this is for private party customers only. If working for a general contractor, it's whatever you negotiate.

I used to require 1/3 up front on contract signing (anything over $1000 requires a written contract signed by both the customer and myself) now I require 50% up front. This is because of slow payers. When you won't start without the up front payment they get up the money quick enough but they keep you waiting forever for the balance. Meanwhile I have to pay for materials, salaries, etc. We're not a bank!

Royta, as for CA, all I can say is get the heck out. Then when all they have is illegals doing the work maybe they will rethink their stupid laws.

-Hal

This has changed over the years for me. I used to always require advances because of cash flow issues (no money in the bank). As my account has grown beyond my monthly needs, I've relaxed that requirement. I'm in commercial work through a title company, so the money is guaranteed, but the bank won't release the funds to the title company until their guy sees the work installed (for their own protection).

Now, I do it case-by-case. The little old lady from church can get it on the easy payment plan (it may be the only way she can afford it), as opposed to Nick-the-Negotiator who I want to see money from. As LK says, it seals the deal.

Dave

royta;
I read that link you provided. It seems that the homeowner would be advantagious to that law. I don't agree with it. 10% or $1000 whichever is less doesn't fit in most cases. What if it's a larger project, and $1000 doesn't pay for materials, that makes the EC a finance institution.
Your thoughts?
~Andy

Hal and Andy,

Yep this law does suc%! I remember when it first came out. Less than a year of going out on my own.... Back working for someone else again!

Working as a sub and Commercial is still negotiable. But working for a Home Owner, you gotta work fast.

Why can't you have $1,000 advance & then another payment on completion of a portion of the project? In other words, draw up a contract with several payouts?

Dave