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View Full Version : How much deposit do you charge on big jobs?


Century Landscape
02-20-2011, 09:00 PM
Hey guys,

How much of a deposit/How much money down do you normally require on big jobs. I referring to bids where materials are included. I've done a few, so far just charged like a 25% deposit so that I'm not totally screwed in event they don't pay.

Do you think that's too much, way too little, do you make customers put money down up front at all? If not, what kind of payment schedule do you use?

I'm trying to figure what's par for the course so that I'm not way out of line with my competition. To me, it doesn't seem practical to not take some money from the customer to guarantee that they are serious and not a deadbeat. Obviously, on the other hand, it's not like I wouldn't know where they lived :laugh:

My main sticking point is the fact that I'm providing materials and paying other charges (equipment rental, etc.) up front.

Please weigh in, all responses are helpful.

nepatsfan
02-20-2011, 09:02 PM
50% due upon acceptance, 50% due upon completion on all residential jobs that require materials

Century Landscape
02-20-2011, 09:15 PM
At 50%, do you get much balking? Some people are kinda cheap and suspicious to boot.

Different rate/fee schedule on commercial?

White Gardens
02-20-2011, 09:37 PM
50% due upon acceptance, 50% due upon completion on all residential jobs that require materials

Same here and no people are generally serious and have no problems paying half for a deposit.

You might run into a few occurrences though where it might be prohibitive to ask for a deposit, such as in the case of commercial installs. So you might want to maybe find a small line of credit somewhere either through a bank or your suppliers to compensate for that.

Even with lines of credit at places, I still take deposits in order to not have to use them unless I have to.

ReddensLawnCare
02-20-2011, 09:42 PM
If it is just service..i bill after the job unless it is HUGE and then I segment it into steps of completion. If it involves materials..the owner ALWAYS pays upfront and I typically charge them what it would cost them. I might be able to get pipe for 175 a roll but they will pay 250 or more..that way My cost are covered if they dont pay and I have still made a little extra money to somewhat cover my labor costs. I have only had one person not pay me for a small install I did with there plants...I didnt do the down payment thing and they kept telling me they were going to pay me...1 month later..i showed up...asked for my check..they had some lame excuse..i started digging up the azaleas I had planted. They got all up in arms, but I had the reciept for the plants and they had not paid for them, so they were still mine by the law. I got my check a few hours later...i did have to replant 4 bushes tho

johnsonslawnmanagement
02-20-2011, 09:47 PM
Jobs over 10k I require a 1/3 deposit and a contract. I take draws ever (2) weeks on longer projects for work completed and the balance upon completion. Done this for many years and the 1/3 usually pays for materials and labor.
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2ndNature
02-20-2011, 11:10 PM
Jobs over 10k I require a 1/3 deposit and a contract. I take draws ever (2) weeks on longer projects for work completed and the balance upon completion. Done this for many years and the 1/3 usually pays for materials and labor.
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I agree with draws. I get them weekly on larger jobs

johnsonslawnmanagement
02-21-2011, 11:52 PM
Draws are a necessity for a job to pay for it's own labor. I like to seperate each job to ensure an accurate profit margin.
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Turf Dawg
02-22-2011, 11:47 PM
All materials, rentals, ect....... [anything witch would have to come out of my pocket] gets paid for up front.

Century Landscape
02-23-2011, 07:47 AM
All materials, rentals, ect....... [anything witch would have to come out of my pocket] gets paid for up front.

This is always my concern, I don't want to get screwed on monney out of pocket on a large job.

I gotta say anyway, seems like a lot of times, the old rule of thumb that "a contractor's labor price is normally equal to the price of materials" that you always hear from old timers is often accurate. I guess in that sense a 50% down before commencement of work makes sense.

FLCthes4:11-12
02-23-2011, 08:06 AM
On jobs 10k and smaller I get 50% down and balance upon completetion. On jobs more than that I like to start with 1/3 down and then balance with be drawed each week base on amount of work completed.

tree_hugger
02-23-2011, 10:02 AM
man it doesnt matter if commercial or residential...anything over 1500 i get 50% up front before i start and then they have one week to pay the rest after i finish. commercial do not mind giving you a deposit especially since theres a contract involved. im installing irrigation and landscaping on 7 hotels and 3 restaurants over this year and they have paid me half up front already. if they comlain about paying a deposit then most of the time they will be hard to get paid from. jmo

tree_hugger
02-23-2011, 10:10 AM
If it is just service..i bill after the job unless it is HUGE and then I segment it into steps of completion. If it involves materials..the owner ALWAYS pays upfront and I typically charge them what it would cost them. I might be able to get pipe for 175 a roll but they will pay 250 or more..that way My cost are covered if they dont pay and I have still made a little extra money to somewhat cover my labor costs. I have only had one person not pay me for a small install I did with there plants...I didnt do the down payment thing and they kept telling me they were going to pay me...1 month later..i showed up...asked for my check..they had some lame excuse..i started digging up the azaleas I had planted. They got all up in arms, but I had the reciept for the plants and they had not paid for them, so they were still mine by the law. I got my check a few hours later...i did have to replant 4 bushes tho


not sure about north carolina but in tennessee once you plant the bushes you cant go back and dig them up. customer can sue you for theft and vandalism. saw a guy do that one time and he got arrested for it. the one time i had to go after my money i put a lein against the brand new building and the problem was i wasnt getting paid from the contractor not the company we were all working for so once i put the lein on the building it brought it to the attention of the company and they fixed the issue real quick

TurnerLawn&Landscape
02-23-2011, 06:38 PM
deposit is a great idea....just be careful that you are accurate in your bids.

AI Inc
02-23-2011, 06:46 PM
Hey guys,

How much of a deposit/How much money down do you normally require on big jobs. I referring to bids where materials are included. I've done a few, so far just charged like a 25% deposit so that I'm not totally screwed in event they don't pay.

Do you think that's too much, way too little, do you make customers put money down up front at all? If not, what kind of payment schedule do you use?

I'm trying to figure what's par for the course so that I'm not way out of line with my competition. To me, it doesn't seem practical to not take some money from the customer to guarantee that they are serious and not a deadbeat. Obviously, on the other hand, it's not like I wouldn't know where they lived :laugh:

My main sticking point is the fact that I'm providing materials and paying other charges (equipment rental, etc.) up front.

Please weigh in, all responses are helpful.

You need to check your state laws concerning deposits for home improvement. Then require the max down allowed by law.

alf500series
02-24-2011, 12:30 AM
i usually require 50% of total bid and then the remaining when finished. any changes to the bid -be it less or more can be taken care of with the remaining due. got burned a couple of times-residental and commercial so know i don't take any chances. after explaining i haven't had a problem with that yet. commercial is a little different, but usually i get paid before i get the bill for the products-example mulch or plants.

rocklandls
02-24-2011, 01:01 AM
For brand new customers, I get 100% of the materials and 50% of the labor. For long time existing, good customers I take no deposit unless its a huge job with $$$K of materials.