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When reading the other thread I had this question come to mind, but didn’t want to appear to try a hijack.
On a major type job, how long between receipt of deposit and start of job?
Some of the time frames to start a job that I’ve been hearing, don’t know time between deposit and start, is 3-6+ months. That’s a lot of time for someone to have a deposit. Also can change the cost of the job.
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I schedule my deposit as two payments.
The first is usually about 5% - enough to bind the contract and get scheduling under way.
I get my full deposit when construction actually starts - either at excavation or material delivery or whatever the job demands to begin.
I will vary the amount of the full deposit depending the job and how much outlay I anticipate spending before the next scheduled draw.
I try to consider the customers' concerns when structuring my payments - but most important is that my financial involvement is kept to a minimum. I've got enough on my plate with the construction of the job without becoming a source for a construction loan.
Very seldom does a project occur that I don't have significant amounts of my money tied up. I am trying to minimize that involvement.
Terry
*bobl, Never really thought of it, thanks.I get a small or design deposit upon signing if I won't be starting with-in two weeks. Like Terry said, to make it binding.Otherwise, it's the next job I on, unless the Owner has a fixture of custom work that must be started early so as not to delay the progresion of work.I've had clients offer a deposit up to a year in advance to book me, but I've never taken them up on it. What do you think, should I? and Why?Luck
*Here's my attitude about deposits. Even knowing there are those incompetent and just plain cons in our industry, I look at it form the perspective of our own business. and we are generally booked up for 6 -12 months in advance.From the onset, the cards are stacked against our business. 1. W extend credit to clients via those payouts, yet do not take a credit app on them.2. We cannot repossess what is in their home.3. Too many will refuse to make even a $5000 payout if them don't like something worth $200, either in workmanship or a product. 4. If they decide not to pay, regardless of the reason, the onus is on us to kiss ass, eat a change order, or whatever to get paid. Or it's arbitration, mediation or a law suit. Meanwhile, they are still enjoying the fruits of our labor and materials.5. The justice system "assumes" we're in the wrong - regardless.6. Have a disagreement, they will not return calls, not emails, nor letters. Meanwhile, again, they are still enjoying the fruits of our labor and materials.So, even with a job not scheduled to start for several months, we get as large of a deposit as we can and place it in a money market account, except for those monies used for special order materials, and to reimburse ourselves for the time taken for the original Proposal, or SCA. We cater to our clients far to much, if that's possible, "not" to request a large deposit up front. Besides, think about how many phone calls and/or additional meetings that occur between the contract signing and the start date. Who pays for all of that time, and where does it come from. Think I'm wrong or being greedy? Look at the banking industry, and what they are getting away with, and notice, I''ve never heard of one going under. Origination fee. Documentation fee. Contract "generation" fee. Use the bathroom fee. (-: And the list goes on. Read the fine print on your mortgage, credit card app, truck loan, etc. The purpose of a "business" is to generate as much return on it's investment as it can. And the word "investment" includes a lot more than just bricks, mortar and cash.
*Thank You Sonny!!!!!!Louis
*Sonny, Good idea 'bout putting the long range deposit in a seperate money market account.Ditto on the risks that people are unaware of. The example I use sometimes is: I'm a fabrication factory. But unlike a fabricator, in a closed, controlled enviroment, I set my factory up in your home. Name any other industry that would be so foolish to do the same. So many things beyond my control, including the daily mood swings of the Owner.Sonny, you are really good at laying it out. Must be that fridge and cookie cabinet you live with.Luck
*Mark, as I mentioned in a different thread, I'm greatly expanding "The Process" and it will include what's done before a contract is signed, after it's signed and before the project starts, and a few other pieces of info to separate ourselves from the rest, act as a qualifier, and justify why the client should be glad to pay for a detailed Proposal, or as I call it, an SCA.When it's done, in about 2 weeks, I'll see if I can figure out how to post or link it as a PDF file format (I use a Mac and ClarisWorks) for critiquing and modification for use by the rest of our friends here if they find it valuable to their operation. Guess I should continue learning Word since it translates easily into PC Word format.
*You go, boy!
*Thanks for the info everyone. Very enlightening.BobL
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When reading the other thread I had this question come to mind, but didn't want to appear to try a hijack.
On a major type job, how long between receipt of deposit and start of job?
Some of the time frames to start a job that I've been hearing, don't know time between deposit and start, is 3-6+ months. That's a lot of time for someone to have a deposit. Also can change the cost of the job.