Discussion in 'Hardscaping' started by Commonwealth LC, Feb 6, 2007.

  1. Commonwealth LC

    Commonwealth LC LawnSite Member
    Messages: 51

    How would you guys work out payments for larger jobs.

    I have one now that is $13000, and will take about 3-4 days.

    all input is welcome

  2. John Gamba

    John Gamba LawnSite Fanatic
    from ct
    Messages: 10,812

    1/2 up front. the rest when done.
  3. neversatisfiedj

    neversatisfiedj LawnSite Bronze Member
    Messages: 1,028

    Ditto. Even though it is a couple day job , it is unlawful to take all of the money at once.
  4. John Gamba

    John Gamba LawnSite Fanatic
    from ct
    Messages: 10,812

    You can use the "draw" method to. it all depends on the customer.
  5. hortiscape

    hortiscape LawnSite Member
    from Vermont
    Messages: 30

    How much material cost do you have?
    2-3 day job sounds like High material cost which you should never pay for.
    My rule is; materials plus 1/2 labor up front, remainder upon completion.
  6. thilawncare

    thilawncare LawnSite Member
    Messages: 58

    We take a third on signing of contract... 1/3 on start of job.. 1/3 + additions on approved completion... Just our method... state law says we cant take more than 1/3 at a time... wierd state.
  7. McKeeLand

    McKeeLand LawnSite Senior Member
    Messages: 681

    We have two methods depending on the job size.
    Little jobs 1/2 down, 1/2 due at completion
    Big jobs 1/2down to start, 1/4 due once the job starts, 1/4 due at completion.

    We used to do 1/3,1/3,1/3 but i stated to realize on big jobs 1/3 was more than our profit sometimes and i don't like have any money out that i may not get back if things go bad. I feel better knowing that i only have 1/4 on the line instead of 1/3. Plus dividing by 3 always give some weird number to work with. we are flexible and are willing to work with customers, but they are basic guide lines.
  8. DVS Hardscaper

    DVS Hardscaper LawnSite Fanatic
    Messages: 6,619

    Let me say that laws will vary from state to state in regard to how a contractor may set up payment schedules.

    I'm in MD, and the Home Improvement law reads "Contractor may not DEMAND more than 33.33% deposit". OK, I won't demand, but on some small jobs the materials may cost more than the labor! In that case, I *KINDLY* *request* 50% down. And if they refuse, then I settle for 33.33%. Most of our jobs don't fall into this category, I'M just pointing out how loosely worded the MD law is, and how one can find a way around pretty much anything.

    Here is how I set up our payment system:

    I will not even put a job on a schedule until a signed contract is in my hands. And then, I don't even want that signed contract unless a deposit of 33.33% accompanies it. I have had people sign contracts, I order the material, then at the last minute they have backed out. So because of a few that have baked out, I won't do anything further (order materials, schedule the job) until I get the deposit.

    1. 33.33% down
    2. 33.33% paid upon the day the work begins

    If the job is over $7,000, which most of our jobs ARE, I require at least 4 draws. A contract was signed last week that had 6 draws.

    - Another payment upon completion of aggregate base installation.
    Or another payment upon completion of step construction / seat wall construction and aggregate base installation.

    - Another payment upon completion of paver installation (this is for large jobs where other tasks are performed, such as lighting, planting, etc.

    - followed by more draws set up at specified intervals.

    I have learned a thing or 2 over the years.

    As mentioned before, I saw one contractor go to court looking for his $5,000 final payment. And had he set up draw schedules like I do, he would not have been lookin for so much money.

    I refuse to subsidize a homeowner's project. I am DELIGHTED to be a part of building their dream, but I ain't gonna cover it's COST.

    All of our jobs typically require regrading and seeding/sodding at the end. Which the cost to perform this task is covered in our contract. So I try to set up the draw schedules so that when the job is 100% finished (walls build, steps complete, pavements complete, regrading and seeding complete), the only thing the client owes us for is the re-grading and seeding.

    I try to plan for the worse. It costs a lotta dinero to litigate a job. Usually more money then the job was worth. So my mentality is, at the end of the job, their balance due is usually around $400 - $1500. So, if at the end, there is a dispute of some sort - we walk away and they can keep their $400 - $1500. It would cost me at least $3,000 to take them to court.

    And thats how I set up payments.
  9. McKeeLand

    McKeeLand LawnSite Senior Member
    Messages: 681

    I agree with DVS. Never fiance your customers project. I know we all want to look like big shots and say just give me half now and half when it done, leaving them to think I'm doing so well that i can afford to front you half of your project. That's crap, your just leaving yourself in a bad position when, and they will, thnigs go bad. Never give the customer the upper hand. You should always be ahead of the game. Never have more invested in their yard than they owe you.
  10. DVS Hardscaper

    DVS Hardscaper LawnSite Fanatic
    Messages: 6,619

    Take a bank for example. You wanna buy a used truck. The banks are willing to finance the truck. But...they will only finance 75% (+ or -) of the vehicle's value.

    They ain't going to invest more than its worth!

    A few weeks ago we did a small patio and the man was chatting with me. He says "I'm in sales and we don't collect a dime until the job is done".

    I replied "Our clients call us. They call us to build their dreams. We'll build their dream, but we're not going to front the money to do so"

    I know someone thats opening a child custody case against the mother of the child. Theres an attorney in our area that is well respected by the judges and is honest, and really knows his stuff. The attorney tells this person I know "For me to take your case, if I decide to take your case, I'll need 3 to 5 g's upfront".

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