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Down Payments for Jobs that are waiting for Springtime

Discussion in 'Landscape Architecture and Design' started by JimLewis, Oct 17, 2006.

  1. JimLewis

    JimLewis LawnSite Fanatic
    Posts: 6,841

    Ok, this is a situation I've never been in before. We're booked for the remainder of this year and I have people who I've given bids to that are ready to sign a contract, and don't mind waiting until next spring for us to begin. In other words, they want to be "first on our list".

    So typically the way it works here is we get a 50% deposit at the time that we sign the contract, and then we collect the remaining balance the day we finish the job. And I don't mind collecting a large deposit from someone if I know we're going to be starting the job in a month. But when it's going to be like 4 months until we even start, I feel a little akward asking for a 50% deposit.

    Who here has experience dealing with this situation? How do you handle it?

    I was thinking maybe I just make a list of these people and then wait to sign a contract until the end of February or something. Or should I lock them in now with a contract and a smaller deposit and then collect a larger deposit later as we get closer to starting the job?
  2. DBL

    DBL LawnSite Silver Member
    Posts: 2,219

    have them sign the contract now so theyre locked in then collect the deposit in a few months to buy material and go from there
  3. olderthandirt

    olderthandirt LawnSite Platinum Member
    from here
    Posts: 4,900

    10% non refundable now. That locks a spot on next yrs busy spring scheldule, then another 40% more, 30 days before start date.

    People that balk at the non refundable part are usually going to spend the next 3-4 months price shopping for a cheaper price. If there serious they understand that to be 1st in line they need to lock in there spot. And the 10% is their guarentee of an early spring spot.
  4. Green-Pro

    Green-Pro LawnSite Bronze Member
    Posts: 1,420

    Some very good advice here
  5. DBL

    DBL LawnSite Silver Member
    Posts: 2,219

    they wont back out after they put 10% down that they cant back out and you have what 4 months to plan...better than my idea
  6. dcondon

    dcondon LawnSite Silver Member
    Posts: 2,246

    If you tried doing that around here people would just laugh at you.:dizzy:
  7. JimLewis

    JimLewis LawnSite Fanatic
    Posts: 6,841

    I guess it's different everywhere. But around here licensed landscape contractors with lots of good references are tough to find and when you find them they're even tougher to get a return phone call from. Seems like people jump on it once they find one. I've had people offer me 50% down now for jobs we don't plan on doing until spring. And I've had two people pay me 100% up front for jobs we did for them this year. I protested each time. But they insisted it was easier for them and they trusted us. So I quit protesting. Anyway, seems like it's a different market here. People seem to like to throw money our way.
  8. RockSet N' Grade

    RockSet N' Grade LawnSite Silver Member
    Posts: 2,454

    The problem I had last year coming into this year is what you are facing now. I took a deposit ( 10% ) and by the time this year started the number I had committed to, because of rising prices, was way below market......the rise in fuel prices killed me on those jobs...not only in fuel itself, but in the higher costs of materials in general.
    My idea now is to take the 10% deposit and have a price adjustment clause in the contract just in case and because of the unknowns.....I do not have my verbage yet.....but I will do it that way or not at all
  9. newz7151

    newz7151 LawnSite Silver Member
    from Tejas
    Posts: 2,419

    Do you figure in any unforeseen cost in your bids when they are so far out like this? Like, say the bid calls for a large number of a certain plant.. but over the winter, a large number of the nurseries that grow those plants are hit by a natural disaster or some pest that wipes out their spring sale inventory. If the available sources were cut by 1/2 or 3/4, is there enough in there to cover the increased demand with the decreased supply?
  10. RockSet N' Grade

    RockSet N' Grade LawnSite Silver Member
    Posts: 2,454

    And that is an example of the problem......and it translates to each and every element of that particular job.......I am not convinced on a hard number to increase the price by, I am however, convinced that there has to be an understanding that the price I am quoting now is at current price structure and if it changes, then my prices will change accordingly......bottom line, what I am trying to do is leave some flexibility in there so I do not get caught at a 30% deficit on a hard non-flexible contract like I did this year. By the way, I went through your website, and your work presented is outstanding.

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