Landscaping down payment??

Discussion in 'Business Operations' started by KUtravis, Jul 21, 2013.

  1. KUtravis

    KUtravis LawnSite Member
    Messages: 9

    We are starting to get more landscape jobs and I was wanting to know what is the norm for requiring down payments.

    Do most of you have a price that requires an upfront payment? $5,000 or $10,000 or $20,000 or ????

    What percentage do you ask for, 10%, 20%???

    When hardscaping what is the best way to figure an estimate?

    Any help would be appreciated. Thanks
     
  2. Stillwater

    Stillwater LawnSite Platinum Member
    Messages: 4,889

    Most tates have limits on the deposit you collect
     
  3. APLUS LAWN CARE

    APLUS LAWN CARE LawnSite Senior Member
    Male, from North Missouri
    Messages: 587

    I don't know if this is the right way to do this, but I always collect the cost of materials for the project and then when the project is completed I collect the labor portion.
     
  4. KUtravis

    KUtravis LawnSite Member
    Messages: 9

    Is this for all jobs or do you have starting point? Or do you go off feel for the clients ability to pay?
     
  5. APLUS LAWN CARE

    APLUS LAWN CARE LawnSite Senior Member
    Male, from North Missouri
    Messages: 587

    That is or all jobs. Keep in mind, however, that I don't do any very expensive jobs. The most expensive jobs I do are in the $5,000 range, and most are smaller. It may be different on larger landscaping jobs.
     
  6. 94gt331

    94gt331 LawnSite Bronze Member
    Male
    Messages: 1,718

    I usually ask for 30-%50 down payment with a signed contract I know my state regulates differently but I never screwed a customer so I never had any problems, when I take a deposit I usually start within a couple days, most of the time I'm allready starting when they hand me the deposit. I mean there's time I do a job and there's %60 or more just in materials it allways depends on the job and what I feel I need to get started.
     
  7. AI Inc

    AI Inc LawnSite Fanatic
    Messages: 27,296

    What he said. Round here the max DP is 1/3. So that's what we get.
     
  8. clydebusa

    clydebusa Inactive
    Messages: 1,660

    10% to be on the schedule. Don't pay 10% down not on the schedule. Show up for job 40%. 50% paid at the end. This is my basic contract, might differ if a lot of material cost.
     
  9. dllawson

    dllawson LawnSite Member
    Messages: 172

    Let your customer know up front that you will be expecting a 50% deposit the day you start working on their job. Make sure your contract includes a deposit amount and give them a proposed start date when they sign. Call them a day or two in advance of your actual start date, tell them when you will start working and make arrangements to collect the deposit.

    Repeat this process when you are finishing a job. Call the customer a day or two before you plan on finishing. Tell them you would like to meet on your final day for a walk through to make sure they are completely satisfied while your crew is still onsite. Tell them you will have the final invoice at that time.

    When I followed those steps I always had good cash flow and my jobs were profitable. I only had problems when I was "too busy" to pay attention to the details.

    Exceptions:
    1. Obviously, you can only collect the amount of deposit allowed by your state.
    2. If you need to preorder any special materials, like hardscapes or lighting, collect the deposit when you place the order instead of the day you start working.
    3. If you are only going to be on a job for 1 or 2 days, you may not need to collect a deposit. This also helps answer your question about a price that does not require a deposit. That number may be between $2500 and $5000 depending on your company or the type of job.
    4. If you have not been charging a deposit, be flexible with your best customers that have paid quickly in the past. You do not want to mess up a good relationship, but those customers also trust you and are usually happy to pay a deposit.
     
  10. seabee24

    seabee24 LawnSite Senior Member
    Messages: 619

    Our policy is. Any job with over $1000 in material cost, or any job over $2500 total needs a down payment

    We are flexible based in the job, mainly I'm looking to get all the material paid for, plus something to help cover any direct labor expenses.

    At a minimum 10% the day they sign

    Material paid for when ordering.

    I like 50% down. I have done 30% with signing, 30% the day materials are delivered and work has started. That's nice because you have 60% before you have done any major work.

    Each state maybe different but, if the material is delivered you can charge for it in full.

    On larger jobs, more than 3 days we tell the customers that we will talley up all work completed and every Friday they must cut us a check for any thing. Sometimes a 3 day project runs long so we just make it known ahead of time that is our policy.

    I have found as long as you tell them ahead of time prior to signing, and you stick to your word on the start date, generally you don't have problems in asking for it
     

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