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  • Money Question

    Im getting my first big job as a contractor to install 20 2" Rpv backflows. My question is when I write up the contract would it be wrong to ask for half the money upfront and other half when I finish. Thanks
    You can lose with me, but you can't win without me!.... PPI

  • #2
    Re: Money Question

    Originally posted by PlumbingParamedics View Post
    Im getting my first big job as a contractor to install 20 2" Rpv backflows. My question is when I write up the contract would it be wrong to ask for half the money upfront and other half when I finish. Thanks
    I think you should make the contract on your terms. Some do a 50-50, some 3-33's (I know abut the other 1 ), some 40-40-20.

    Make it how you need it and are comfortable with it.



    • #3
      Re: Money Question

      Any contract job requires a deposit to cover your material and some labor. Any business that questions this practice should not be dealt with...

      And just because they may be a big corporation or a big name does not mean you wont get stiffed.


      • #4
        Re: Money Question

        out here we can't get more than 10% or $500 whichever is less as a deposit.

        but you can get whatever you want once the job or material shows up.

        years ago when i was just starting on my own. i had a high rise that needed $20k worth of custom made non returnable cla valves. 6 week lead time.

        had the building write a check directly to the supply house with my account # on it. basically they were fronting the money for the valves just in case.

        normally i don't ask for anything until i'm finished and typically with commercial it takes another 30 days to get paid.

        you can't do this with every situation, but i can't remember the last time i asked for anything until i finished.

        phoebe it is


        • #5
          I'd pass on jobs like this

          And in a situation like that,

          "Purchase the product and have it there for us to install"

          That simple. Big companies like that could drag 6-12 months without paying and put a business out of business.
          Northern Kentucky Plumbers Twitter Feed | Plumbing Videos


          • #6
            Re: Money Question

            With us it depends on the size of the job. If it is a week or 2 week job then we ask for 50% up front as we can't work that long without payment especially when a high volume of materials are required.
            engineered hardwood flooring


            • #7
              Re: Money Question

              We always try to get a third down to cover the cost of the parts. Been stiffed to many times with a company filing bankruptcy when the job is finished.
              Ron Hasil Lic #058-160417
              Ron's Facebook
              A-Archer Sewer & Plumbing specializing in:
              Tankless Water Heaters | Drain and Sewer Cleaning
              Sump and Ejector Pumps | Backflow RPZ Testing


              • #8
                Re: Money Question

                Originally posted by Drip Trip
                How much is it going to cost you in parts and labor? Is this a national company you are working for?

                I have a national company account that need parts that cost 1000.00/each, but since it would be more of a hassle to get a down payment, I bill them the whole amount. I get a little nervous about doing it, but the manager appreciates it. The parts is the big expense, the labor is 200-300.
                This very same company was late on a big invoice, their stock earnings is -12.50, and the phone was shut off at their site here.

                I have their corporate credit card number on file, so this morning I charged the balance, then called their AP in Chicago and let them know what I did.

                Strange times, indeed.
                (The Low Spark of Steel-Toed Boys)


                • #9
                  Re: Money Question

                  You can ask for whatever you want in your contracts. If it's a large job for a new customer, I get half up front. If they have a problem with that, I have plenty of other customers to work for.


                  • #10
                    Re: Money Question

                    Deposit up front, whatever your comfortable with, then progress payments. Maybe payment after every four or five installs. No payment, no progress!

                    If permits are involved get the permit money upfront, maybe a check made out to the city by the customer. Don't let them get ahead of you. If they do not trust you why should you trust them??

                    Big guys are usually harder to get paid from than little guys.

                    Isn't it great being in business and landing a nice juicy job!!


                    • #11
                      Re: Money Question

                      The bigger a company is the worst they treat contractors. The only time we get anything up front is when ordering new equipment, usually 25%, with 25 on delivery and balance on completion. GE is one of the worst to deal with, 10%discount will get you paid in 90 days and 20% will get you paid in 30 days, otherwise it is 180 days to receive payment on any invoice. We pad all parts and labor 25% then give them thier 10% to get 90 day service out of them!
                      info for all: --- "I like long walks, especially when they are taken by people who annoy me."


                      • #12
                        Re: Money Question

                        The point here being that in order to qualify for the very best 0 percent credit cards you must have a very good to excellent credit rating. It certainly wouldn't hurt to check your credit score before you apply so you know exactly where you stand. It's also an excellent way to check for errors and erroneous information that may be causing you to have a lower credit score than you should.
                        credit check company


                        • #13
                          Re: Money Question

                          Usually i get 100% up front or a credit card number pre-authorized if it is an out of town customer, maintenance company, landlord, or real-estate agent, until they develop a good repor with me.
                          Distractions are everywhere, don't lose sight of your dream.


                          • #14
                            Re: Money Question

                            Hi all, im new to the site.

                            if you can get away with 1/2 up front in your state, i would say go for it. In CA, we can only ask for 1k OR 10% down which ever is less. good luck and i hope they agree to your contract.


                            • #15
                              Re: Money Question

                              Most of you guys are small contractors that customers feel don't have the resources or the time to collect when they pay late or stiff you for the balance due.
                              The other problem is there generally is not enough cash flow, even with repeat dependable customers, to "float" their dreams/projects.
                              In my opinion, the following is an example of how I would quote a potential project.
                              Let's say it's a kitchen requiring new cabinets, countertops, and paint/trim etc.

                              Project cost: $19,000 (Materials and labor)
                              Material cost from above: $10,000
                              Labor: $9000

                              Quote to customer: $24,700.00 (Total cost +30%)

                              Quote to specify the following:

                              50% down at acceptance ($12350)
                              30% when cabinets are delivered and ready to be installed ($7410)
                              20% upon final paint and trim. ($4940)

                              The above insures a few things. Your cash flow is not affected in buying needed materials.
                              The labor is covered.
                              You have not lost a dime on labor or materials and at worst you made 10% if the customer decides to screw you at the end.
                              In 99% of the cases, they will pay you the final 20%, unless you are a butcher, ran way over on the time you estimated, or left their residence a mess.
                              Cleanliness and customer service, along with a good professional appearance and work attitude go a long way in landing that final 20% (30%) margin that will ensure you can grow the business.

                              My experience is that anything less than 30%, is why any and all business's fail.
                              If you can't work close to these figures with a customer, run, don't walk from the job.