Start job with no deposit???

Discussion in 'Landscape Architecture and Design' started by JimLewis, Mar 6, 2007.

  1. JimLewis

    JimLewis LawnSite Fanatic
    Posts: 6,842

    Well, this is a first for me. I still can't believe I caved in, like I did. It was just so unexpected, it caught me off guard and totally ruined my posture with the customer. Let me explain.....

    So our company has a policy that we collect 50% down payment, at the signing of the contract, for any job over $1000.00. That's just been a policy of mine for years and years. And I've never really had anyone balk at it before. Everyone just understands that's business as usual and they're always happy to pay up.

    Well, this evening I was signing a contract for a small French drain job. The total was just under $2000.00. And when I gave the bid, I checked the box in the estimate form that said, "Terms: ____ 1/2 Down and remainder due on completion." I also verbally state the terms of the job as I had the estimate to them. Always.

    So I am pretty much done drawing up the contract and getting ready for the customer to sign and he first asks me how long the job will take. I tell him it will most likely take just one day. There's a slight chance it would take us a few hours into the second day, but that's it. I explain there's a 90% chance it will only take one day. So he says to me, "Ok. Jim. I gotta tell you...the only problem I have with all of this is the down payment. That's a lot of money for me to put down and I've had bad experiences in the past where I've given a contractor a deposit and then it's taken me several weeks to get them to show up and finish the job. And since this is just a one-day job, I'd rather just pay you the entire amount when you are finished. So let's do it that way."

    Well, this totally took me off guard. And I kind of reluctantly agreed. I mean, I didn't really have any reason to object. He's right. If it's just a one-day job, I really don't NEED the deposit. It's just something I usually get.

    But I still feel like a Clod for not sticking to my guns. I am usually pretty firm about my policies. And I feel like I totally caved in (no offense to any Cave Men reading this).

    I mean, this guy lives in a nice $800,000 home and seem very professional. I have no question he'll pay. It just feels wrong to start a job without a down payment.

    So your thoughts...Should I have stuck to my guns? Or would you have done the same thing and agreed to do a small job with no deposit?
     
  2. sildoc

    sildoc LawnSite Silver Member
    Posts: 2,925

    Ya know Jim this leaves me waiting for the after story. I find that the richer they are the cheaper they are. I feel for ya. totally awkward and yet kicking your self in the A$$ as you walked out of there. I am sure it will go well. I have to say I really try to stick to my guns but General Contractors give us all bad names. or the other side. any ways I fee your hurt since I have been there. at least it is a home owner instead of a commercial account. Commercial accounts seem to take way longer than residential.
     
  3. mdvaden

    mdvaden LawnSite Bronze Member
    Posts: 1,946

    Hey Jim !!

    Just think of it like having one extra drink on a rare occassion just to get a buzz.

    Kind of gives you a short time feeling and the effects will wear off in no time at all. :)
     
  4. topsites

    topsites LawnSite Fanatic
    Posts: 21,653

    It wouldn't be the first time I allowed myself to be talked into a mess, sometimes I see the problem as soon as I head out of their driveway, other times I see it later, but so long I see the problem before I start the job, I am under no obligation to finish what has not gotten started.

    It is unfortunate that it has to come to this sometimes, but while it isn't exactly always my fault that I got talked into it, what is most important is that I do not allow myself and my company to enter into an agreement which suddenly has a noticeable potential of financial disaster. While I can appreciate the collections aspect of my business now being an integral part of the billing cycle, it is my job as the owner to foresee potential problems and to avoid these at all costs. First because I would frankly rather have the money, but I'm also sure the customers are not amused by the resulting marks on their credit records later, either.

    By doing my job properly, I am in effect protecting both my own and the customer's best interests.

    So what I normally do is print out and send this gentleman a polite job refusal letter, as follows:

    [Headers (your address / his address / date /etc)]
    Hi,

    I'm sorry, but having considered the work and the requirements involved, I'm afraid I can not help you at this time.

    Thank you for the opportunity.

    ////////////////////////////////////////////

    That's all I would do, you had a failure to reach an agreement, the man didn't follow through on his end of the bargain by failing to make the down payment, it is at this point not your fault anymore than it's his, these things happen but you can't let the boat sink because of it.

    I'm not sure if that's what you wanted to hear, but that's how I do it, I dislike this part of things but what can you do...
     
  5. JimLewis

    JimLewis LawnSite Fanatic
    Posts: 6,842

    The problem is we have a signed contract. I can't just back out of that. We both agreed to the terms of the contract, which was Zero down and entire amount due upon completion.

    Had it just been a gentleman's handshake, I probably would back out. The whole thing kinda bugs me. But I am bound by contract to keep my end of the deal. If I fail to, I am in breach of contract. And although that may never amount to much. I still have my pride in myself and my company. I'm never going to let it be said that our company didn't fulfill our end of an obligation.

    So at this point, I am stuck. I've gotta follow through.

    The good news is I've never been screwed for money on an install job. And having done hundreds of them, that says a lot. I've been screwed out of money for maintenance lots of times. But never for landscape install stuff like this. And I feel confident this guy will pay.

    I guess the only thing I resent is this guy telling me what my terms are. I spelled out the terms clearly, he accepted the job, he called and said he was ready to go ahead, he invited me over to his house, and then only at the last minute did he let me know he wasn't prepared to agree to my terms. That's the part that keeps nagging me.

    It's probably nothing. The job will probably go just fine. Like I said, I've never been screwed yet. I doubt this will be my first.
     
  6. Smitty58

    Smitty58 LawnSite Senior Member
    Posts: 531

    I know how you feel Jim. I did a small job ($900) for a formwe NBA player last year. Huge house and obviously no problem paying. I have the same basic policy ,but I too let my guard down and didn't get anything up front. So we did the job and then the fun started. The guy couldn't be found after the job because "he was busy". Then I get a call from his cousin who basically acted as his secretary that he was unhappy with the job. This is over a week later! So now he starts complaining and wants me to come over to discuss it. It gave me a bad feeling because his home is back in the woods on a private lane and I guess I've watched too much court tv (and this guy served time before) so I never went. Of course he never called again.
    So now I never do a job without a dn pmt. If they have a problem with that ,I walk.
    You'll probably be fine ,but contract or not if you don't want to do it either just tell the guy or drag your feet getting to it. He'll show his cards either way and then you'll know how to proceed.
     
  7. EgansCountryGardens

    EgansCountryGardens LawnSite Member
    Posts: 163

    What we usually do in these circumstances, is if the customer feels uncomfortable giving us this much deposit on a one day job- I give them the option of postdating a check for the full amount of the deposit for the day that the job is to be scheduled. We keep the check in the job folder, and we will not cash until we have both the deposit and the balance check at the end of the job. I know that it's not much better, but at least it's a small comfort that you stuck to your guns, and got something. It also adds that little psychological aspect that the customer has somehow sealed a deal, and won't shop elsewhere. I will only ask for this option with a customer if they don't want to give me the deposit at the time of the signing. I don't do this on a regular basis.

    If there is materials involved, postdating the check is out of the question though.
     
  8. Tim Wright

    Tim Wright LawnSite Bronze Member
    Posts: 1,034

    Let us know how this turns out. When I read your initial post my reaction was, we'll see how this turns out.

    Tim
     
  9. topsites

    topsites LawnSite Fanatic
    Posts: 21,653

    As far as I'm concerned you have a breach of contract and you made a simple mistake when things got buddy-buddy, but if you wish to proceed then I wish you the best of luck, it will probably turn out ok.
     
  10. SOUTHERNGREENSCAPES

    SOUTHERNGREENSCAPES LawnSite Senior Member
    Posts: 763

    Here Are My Thoughts. I Have Not Had To Argue This With A Customer Yet, But I Have Rehearsed It In My Head. If And When A Customer Expresses A Problem With Giving You Money Up Front Because Of Bad Experiences, Just Explain To The Customer That You Have Experienced The Same Distasteful Acts In Your Line Of Business And That Is Why You Are Only Asking For Half The Money Up Front. That Way Each Of You Have An Equal Stake In The Equation. If Someone Isn't Willing To Match Your Bet In Poker, It Is Time For Them To Get Out Of The Game. And As Far As The Comment "if It Was Just A Handshake Deal, You Would Try To Get Out Of It". If A Mans Word And Handshake Are No Good, Then Maybe He Shouldn't Be Working With Others. I Know That Is Harsh, But I Am Still An Old School Beliver That If You Are Only As Good As Your Word. Take Your Licks On This One And Learn From It If Something Goes Astray.
     

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