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Old 01-03-2009, 02:04 PM
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etwman etwman is offline
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Join Date: Dec 2002
Location: central PA
Posts: 1,212
Business 102

Winter Work. In a time in which many contractors are slow the first thing that comes to mind is discount work over the winter months to keep things moving. This is a dangerous incentive to offer and can very quickly put you in the red if you are inefficient or the weather plays havoc.

If you decide to play that game, and work through the winter (which can be done if you take the right precautions), there are several things to keep in mind.

First, in your contracts, you want to word them in a way that you are never upside down on your winter projects. This can be done in several ways. One…getting a larger deposit up front. Two, requesting multiple draws on certain dates or after certain phases are done. Three, (and this is kind of my preference) quote the project, get a signed contract and a 50% deposit, and bill them at the end of each week for the work that was done. While their deposit holds up their balance due will be $0, after that they will owe you for each weeks work completed with terms due on receipt. By the end of the project the final invoice will not exceed the total cost of the project. Yes this is a lot of paperwork, and I wouldn’t encourage it during your busy season, but it will keep things cash flowing for you. It protects both the customer and you in harsh working conditions.

Let’s draw this scenario: Project costs $30,000. You get 50% down to start the project. You’re 80% done and the ground freezes solid or you get a blizzard. In a normal summer season the weather will usually turn fairly quickly and you’ll be back at it. In the winter it could be 6 weeks before you are back in there, now you’re in the red. To request another 25% draw spontaneously, the customer may say, well when will you be done? Or it wasn’t in the contract. But by billing them at the end of each week (with due on receipt terms) for work completed, you’ll be okay until the weather breaks. It just boils down to communication and being upfront with the customer.

Cash flowing winter projects can be a challenge, we’ve got two large ones open now and the weather is playing with us, but we are making progress and we aren't upside down on either one. However, we’ve talked with both customers about this going into the winter and they understand the payment strategy.

Bottom line: Be careful working in the winter, discounts is not always the best option. Thinking ahead will often save you a lot of aggravation.

Just my two cents...
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etwman
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"Earth, Turf, & Wood, Inc. is a high-end residential landscape & hardscape company that offers superior employment experiences for employees, exceptional opportunities for our architects, a premium service to our customers and value to the community through service and stewardship. We attempt to honor God in all we do by encouraging teamwork, pursuing excellence passionately, serving those who lead, and demonstrating stewardship of resources."
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