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Keegan
11-02-2010, 02:40 PM
I am writing up several proposals for a property mgmt co. just for fertilizing their grounds. Is it customary to ask for a down payment to start off a season?

JD2320
11-02-2010, 03:37 PM
Yes, if you want them to give the contract to someone else.

The answer is No.

One of the things management companies consider when considering a contract and contractor is whether you are financially stable and asking for a down payment screams you're not.

PROCUT1
11-02-2010, 04:26 PM
Dont call it a down payment. Just spell out the billing terms and have the first bill be before the first service.

Puddle of Oil
11-02-2010, 06:12 PM
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domain311
11-02-2010, 11:12 PM
Yes, if you want them to give the contract to someone else.

The answer is No.

One of the things management companies consider when considering a contract and contractor is whether you are financially stable and asking for a down payment screams you're not.

Completely disagree.

Started doing it for our maintenance accounts a few years ago and its one of the best things we ever did to keep cash flow going in the beginning of the season. Sure, have had a few people ask questions...less than 5 in 3 years out of 60-70....so overall its great, and this year we had about 15% or so doing pre-pay for the entire year-4 of which were completely new clients that came by referral.

There is nothing binding in our contracts though either...they can cancel at any time...this makes our customers feel more comfortable and I just don't agree with trying to hold someone to a contract if they are dissatisfied with our service.

We chase money enough and it doesn't mean we have financial instability to ask for a deposit...its business, and in our business where we usually have to wait weeks if not more to get paid after a job is complete, it only makes sense to me. A lot of our accounts that we prep in the spring cost 2k and up for the first month of their clean up, edging, mulch, weed prevention, etc. With that amount of materials and labor it adds up and the customer should put a deposit down just as if they were doing a regular landscape job like planting or a hardscape. If someone makes a fuss over it, then its usually not someone we want to deal with anyway.

lukemelo216
11-02-2010, 11:21 PM
We dont offer a down payment, however we do offer a prepay discount. Usually in the neighbor hood of 10-15%. Otherwise its billing after each service, or they are on a monthly cost which starts april 1 and ends october 1. I have some customers that want quarterly payments which I am ok with too. Only time i do down payment is on landscape work.

bohiaa
11-03-2010, 08:37 AM
anything over 10,000.00 we ask for 50% up front

STL Cuts
11-03-2010, 12:46 PM
We dont offer a down payment, however we do offer a prepay discount. Usually in the neighbor hood of 10-15%. Otherwise its billing after each service, or they are on a monthly cost which starts april 1 and ends october 1. I have some customers that want quarterly payments which I am ok with too. Only time i do down payment is on landscape work.

Are you serious? 10%-15%??? That's craziness.

domain311
11-03-2010, 03:55 PM
We dont offer a down payment, however we do offer a prepay discount. Usually in the neighbor hood of 10-15%. Otherwise its billing after each service, or they are on a monthly cost which starts april 1 and ends october 1. I have some customers that want quarterly payments which I am ok with too. Only time i do down payment is on landscape work.

We do 7% full pre-pay and 3% if half pre-pay for the year.

JD2320
11-03-2010, 06:50 PM
Completely disagree.

Started doing it for our maintenance accounts a few years ago and its one of the best things we ever did to keep cash flow going in the beginning of the season. Sure, have had a few people ask questions...less than 5 in 3 years out of 60-70....so overall its great, and this year we had about 15% or so doing pre-pay for the entire year-4 of which were completely new clients that came by referral.

There is nothing binding in our contracts though either...they can cancel at any time...this makes our customers feel more comfortable and I just don't agree with trying to hold someone to a contract if they are dissatisfied with our service.

We chase money enough and it doesn't mean we have financial instability to ask for a deposit...its business, and in our business where we usually have to wait weeks if not more to get paid after a job is complete, it only makes sense to me. A lot of our accounts that we prep in the spring cost 2k and up for the first month of their clean up, edging, mulch, weed prevention, etc. With that amount of materials and labor it adds up and the customer should put a deposit down just as if they were doing a regular landscape job like planting or a hardscape. If someone makes a fuss over it, then its usually not someone we want to deal with anyway.

The original poster was asking about "Management Companies"

Not commercial work here and there.

Yeah a small commercial maybe ask if they want to pre pay, but the "management companies" I work for and know of are really big companies that would laugh at asking for pre payment or, a down payment. Even if you gave a discount. As a matter of fact it's quite the opposite and they get 30-60 days to pay, and most take every minute of it to do so. These are not "Mom and Pop" management firms though and maybe it's different for you.

If I wasn't financially stable they would simply not do business with me or my company. What happens if you take their pre pay and go out of business?

I'm telling you that "asking" for a down payment or pre pay is like showing them a bankbook that reads "zero"

Offering an optional pre pay is fine but it's up to the client to take advantage, or not.

domain311
11-03-2010, 08:48 PM
The original poster was asking about "Management Companies"

Not commercial work here and there.

Yeah a small commercial maybe ask if they want to pre pay, but the "management companies" I work for and know of are really big companies that would laugh at asking for pre payment or, a down payment. Even if you gave a discount. As a matter of fact it's quite the opposite and they get 30-60 days to pay, and most take every minute of it to do so. These are not "Mom and Pop" management firms though and maybe it's different for you.

If I wasn't financially stable they would simply not do business with me or my company. What happens if you take their pre pay and go out of business?

I'm telling you that "asking" for a down payment or pre pay is like showing them a bankbook that reads "zero"

Offering an optional pre pay is fine but it's up to the client to take advantage, or not.

I understand, but still disagree. Different opinions I guess or different areas entirely will not react the same maybe. But being "financially stable" means to me keeping cash flow flowing....and cash flow is king in any business.

Not asking, but "requiring" a deposit...in most cases, just makes smart business sense to me.

Savatree, for example, has multiple locations in 7 or 8 states...yet, they offer pre-pay discounts. They also sometimes require a deposit. Would that mean they are financially unstable?

I guess it also depends on if one wants to put that risk out there of signing some deals and not getting paid a penny for months...the risk of not getting paid for months worth of work (your money out the window) and no cash flow coming in at the same time is enough for me to say, no thanks.

JD2320
11-03-2010, 08:54 PM
I understand, but still disagree. Different opinions I guess or different areas entirely will not react the same maybe. But being "financially stable" means to me keeping cash flow flowing....and cash flow is king in any business.

Not asking, but "requiring" a deposit...in most cases, just makes smart business sense to me.

Savatree, for example, has multiple locations in 7 or 8 states...yet, they offer pre-pay discounts. They also sometimes require a deposit. Would that mean they are financially unstable?

I guess it also depends on if one wants to put that risk out there of signing some deals and not getting paid a penny for months...the risk of not getting paid for months worth of work (your money out the window) and no cash flow coming in at the same time is enough for me to say, no thanks.

Well maybe where you are it works differently. But here, management companies do not pay up front and I wouldn't ever expect them too.

Cash flow is good but not King. Resources, ability to weather out a storm and money in the bank is King.

domain311
11-03-2010, 09:06 PM
Resources, ability to weather out a storm and money in the bank is King.

Which all of the above ultimately require cash flow. :)

PROCUT1
11-03-2010, 10:08 PM
Are you billing per application or a flat monthly rate?
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