At what point do you require pre-payment?

Discussion in 'Business Operations' started by hi_speedreed, Mar 14, 2012.

  1. hi_speedreed

    hi_speedreed LawnSite Senior Member
    Messages: 534

    Just a general question. I'm not talking about installs, but just general mowing. The reason I ask is I did an estimate for a vacant house and the guy lives two states away. The house had been broken into and was ransacked. Keep in mind this is a neighborhood where the homes are in the 175-250k range. Every other yard is beautifully landscaped. It is a very large property and hasn't been taken care of since August. I would be investing almost a day to get it under control. I asked for half down before I would start and he said he felt that was fair. Just wondering about you guys. Do you ever require a down payment for labor only jobs? I never even think about it on the small city lots and even a couple of the bigger jobs I've done. This just felt a little sketchy, but he said he would send me the money. I have learned to trust my gut and limit my losses.
  2. JCLawn and more

    JCLawn and more LawnSite Fanatic
    from MI
    Messages: 5,281

    I could even see getting enough to cover your costs just so he knows your not going to run with the money because the trust is going both ways. Just my thought.
  3. Dr.NewEarth

    Dr.NewEarth LawnSite Bronze Member
    Messages: 1,476

    Deposit and then post dated cheques for the first of the month preceeding any work.
  4. CircleC

    CircleC LawnSite Senior Member
    from NW
    Messages: 309

    For mowing "ALL WAYS GET PRE PAYED" I don't care if they have been with me for 10 yrs....everyone says "O, I'll pay". For install/mulch, half up front other half due day work in complete. I have been burned way too many times! Burned by people in multi million dollar homes to people in 100k homes....

    If the home hasn't been taken care of since August maybe there is a reason...dude doesn't pay! Or he doesn't care....
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  5. JimLewis

    JimLewis LawnSite Fanatic
    Messages: 6,872

    It sounds like your talking about 1-time work (like clean-ups) where there isn't much expense but labor. For those kind of jobs, we'll usually get a down payment if it's more than $1000. Sometimes, if we're feeling like it's a sketchy situation, we'll ask for it as low as a $500 job. Having someone who isn't even there and lives out of state is what I would consider a sketchy situation. So yah, in that case I would say there is more risk and I would require a 1/2 down.

    The client has nothing to lose in this case. We're bonded. So they could always go against my bond and get paid, if I took the money and ran. I, on the other hand, would be taking a lot more risk, if I didn't get a deposit. It's very difficult to go after someone in a different state when all you have is their name and phone number.

    For regular maintenance service, if the home is for sale, we will only take the account if they pre-pay every month or if they sign up for our AutoPay system. Been burned one too many times on that deal. Someone sells the house and forgets to tell us. Then 3 months later when we finally realize that they bill is getting a little too far past due, we call and they say, "Oh! I sold that house 3 months ago and moved out of town. My realtor was supposed to tell you. She didn't? Oops. Sorry."

    We also always collect payment on completion. So once we're finished with the job, the client meets us on the property, looks everything over, and writes a check right then and there. We never send out invoices and wait for payments. Always paid on the spot. So that helps mitigate the risk as well.

    CS-LAWNSERVICE LawnSite Member
    Messages: 63

    I have several customers that live out of town and I do the lawns and clean up on there weekend homes and they always pay 30 days in advance .not a one has complained and I never get burned for payment.
    For any job over $1,000 I require 50 percent up front

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