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Business Question for Plumbers

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  • Business Question for Plumbers

    How do you like to be paid, if you have a contract agreement with a G.C.???

    I do 3 labor payments and 2 allowances for materials. I set the criteria and never had one problem with this and my plumbers. Usually they are on a build for the whole time, but in stages of course. First allowance is for all rough in materials, 2nd allowance is for the finishing materials. This is on a house build...

    Smaller jobs, its either 50/50 or full payment on completion and no allowance, well sometimes there can be, but for most jobs, no.

    So how do you structure your pay, when dealing with a G.C., or does the G.C. structure the payments as I do?????

    Lets keep this about payments received and not about how much you make. I'm just curious as to see, how the rest of you like to receive payment on a build. I do believe, I must be doing this right, because I have never had a problem with my plumbers demanding more money in the middle of a build, so thats a good thing.

    But with electricians, I give 1 allowance at the beginning and 50/50 with the labor. Also, never had a money problem this way. This is a little more riskier, but if I didn't know them it would be different.
    Last edited by garager; 05-05-2008, 09:26 AM.
    Great Link for a Construction Owner/Tradesmen, and just say Garager sent you....

    http://www.contractorspub.com

    A good climbing rope will last you 3 to 5 years, a bad climbing rope will last you a life time !!!

  • #2
    Re: Business Question for Plumbers

    First off, I never, never let the G.C. set the pay schedule.
    sigpic

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    • #3
      Re: Business Question for Plumbers

      I have done 50/50. But I now do 65/35. And that's the least way I'll do it. I have more involved in the first stages.

      If it's someone I haven't done work for before, I get paid before I start. The last job I did for a new contractor I had him show up with the total that morning. May sound extreme but with the downturn in building contractors can go bankrupt any second.

      J.C.

      Comment


      • #4
        Re: Business Question for Plumbers

        Originally posted by JCsPlumbing View Post
        I have done 50/50. But I now do 65/35. And that's the least way I'll do it. I have more involved in the first stages.

        If it's someone I haven't done work for before, I get paid before I start. The last job I did for a new contractor I had him show up with the total that morning. May sound extreme but with the downturn in building contractors can go bankrupt any second.

        J.C.
        I do pretty much the same ratio 60% for rough in 30% to trim out and 10% upon completion, gives the GC peace of mind that little 10% in the end

        Comment


        • #5
          Re: Business Question for Plumbers

          On a small job it's 100% at completion. With the larger jobs it's 30% at ground work, 30% at top out, 30% at finish and 10% within 30-days of completion.

          Mark
          "Somewhere a Village is Missing Twelve Idiots!" - Casey Anthony

          I never lost a cent on the jobs I didn't get!

          Comment


          • #6
            Re: Business Question for Plumbers

            We are a service company and do not do any new construction, so most of my jobs are done the same day. In the case of doing a remodel I make sure to get 70 percent after the first day of work and the remaining 30 percent upon completion.
            Distractions are everywhere, don't lose sight of your dream.

            Comment


            • #7
              Re: Business Question for Plumbers

              single family homes
              40%.................ground
              40%through wood/steel+inspection
              20%...................finish

              Commercial tenant improvement
              40%.................waste
              40%.copper+inspection
              20%.finish

              Over $20,000 or copper under slab I utilize 10% down payment startup.

              Comment


              • #8
                Re: Business Question for Plumbers

                It's been a while (10 years) since I plumbed houses, but generally, I broke the job into either rough-in and trim or groundwork, rough-in and trim. If I could do the whole job at once, that's what I preferred to do.

                I got 70% for the full rough in, or 35% each for the ground and rough, then 30% for the trim.

                For each part, I got 70% upfront, until the banks tightened up and would no longer release money until the work was finished, and after that I used my own money. So, if I was doing the entire rough-in, I got 70% of 70% upfront. If I was just doing the groundwork, I got 70% of 35% upfront.

                Part of the trick was to make sure you got paid far enough upfront that they didn't get stupid and try to finish the job themselves without calling you back.

                Comment


                • #9
                  Re: Business Question for Plumbers

                  Originally posted by Herk View Post
                  It's been a while (10 years) since I plumbed houses, but generally, I broke the job into either rough-in and trim or groundwork, rough-in and trim. If I could do the whole job at once, that's what I preferred to do.

                  I got 70% for the full rough in, or 35% each for the ground and rough, then 30% for the trim.

                  For each part, I got 70% upfront, until the banks tightened up and would no longer release money until the work was finished, and after that I used my own money. So, if I was doing the entire rough-in, I got 70% of 70% upfront. If I was just doing the groundwork, I got 70% of 35% upfront.

                  Part of the trick was to make sure you got paid far enough upfront that they didn't get stupid and try to finish the job themselves without calling you back.
                  Unfortunately I don't feel comfortable leaving 35% on the table so the homeowner/builder can get a handyman to set finish or he can give me the "I don't have any money,how bout 25cents on the dollar".I've always been paid.Just don't like the way things are going downhill(in a moral sense).

                  Comment


                  • #10
                    Re: Business Question for Plumbers

                    I agree. That last payment is the hardest one to get. No more than 10% left out there hanging on final. Even if I get stiffed on that for some reason I've still made a profit.

                    Comment


                    • #11
                      Re: Business Question for Plumbers

                      Originally posted by drtyhands View Post
                      Unfortunately I don't feel comfortable leaving 35% on the table so the homeowner/builder can get a handyman to set finish or he can give me the "I don't have any money,how bout 25cents on the dollar".I've always been paid.Just don't like the way things are going downhill(in a moral sense).
                      Don't you have a contract, for this not to happen. Never have I ever even considered a breach of contract. And of course if we were to do business often enough, yes the pay structure can change to benefit the Plumbers and Electricians, etc, this would be trust. And happens all the time in this business of residential trades. But I have to consider the fact, money that goes out is not mine, but the Home Owner, thus I must protect it, as if it were my money and more so. But we are fairly similar in the pay structure, for pay and receive.

                      Breach of contract could result, up to 3 times the amount agreed upon and loss of License and fines. Verbal agreements are tough to prove, for either side. Am I stepping out of bounds here and went to deep, OK I'll shut up now...
                      Great Link for a Construction Owner/Tradesmen, and just say Garager sent you....

                      http://www.contractorspub.com

                      A good climbing rope will last you 3 to 5 years, a bad climbing rope will last you a life time !!!

                      Comment


                      • #12
                        Re: Business Question for Plumbers

                        Originally posted by garager View Post
                        Don't you have a contract, for this not to happen. Never have I ever even considered a breach of contract. And of course if we were to do business often enough, yes the pay structure can change to benefit the Plumbers and Electricians, etc, this would be trust. And happens all the time in this business of residential trades. But I have to consider the fact, money that goes out is not mine, but the Home Owner, thus I must protect it, as if it were my money and more so. But we are fairly similar in the pay structure, for pay and receive.

                        Breach of contract could result, up to 3 times the amount agreed upon and loss of License and fines. Verbal agreements are tough to prove, for either side. Am I stepping out of bounds here and went to deep, OK I'll shut up now...
                        The guy I'm working with it going through a mess right now.This area is extremely shark infested.I am making it sound worse than it is.Most of the guys telling stories of not getting their money are usually less than professional.I just cannot afford to let someone exercize their ability to screw another.

                        Comment


                        • #13
                          Re: Business Question for Plumbers

                          Originally posted by drtyhands View Post
                          Unfortunately I don't feel comfortable leaving 35% on the table so the homeowner/builder can get a handyman to set finish or he can give me the "I don't have any money,how bout 25cents on the dollar".I've always been paid.Just don't like the way things are going downhill(in a moral sense).
                          Right on! Over the years way way too many contractors have made promises and broken contracts. After a while you get so you don't trust any of them. A few years back I got burned for over 20 grand from a "reputable" contractor who went chapter 11. Ended up in court with the Judge ordering him to pay 10 cents on the dollar. Again, I never let the contractor dictate the payment terms and guess what? 30 years later, I'm still in business while most of the G.C.'s have come and gone along with the plumbers that trusted them in the first place. Unfortunatly the building trades have always been filled with get rich quick scumbags that have no problem taking their cut and screwing everyone else.
                          sigpic

                          Comment


                          • #14
                            Re: Business Question for Plumbers

                            I'm sure times are changing but I always took 100% at completion on jobs under $10,000. I never even ask for a deposit on those because I told the customer I wanted them to want to pay me when the job was over because they were happy with our work. Many of our larger jobs were done over a hand-shank and the only time we had a written contract was when a construction management company was paying the bills. After 20-years of business the only time I went to court to get paid was a small claims case where the guy told the Judge he would not pay me because I refused to write a false invoice so he could defraud his insurance company (guess who won).

                            Mark
                            "Somewhere a Village is Missing Twelve Idiots!" - Casey Anthony

                            I never lost a cent on the jobs I didn't get!

                            Comment


                            • #15
                              Re: Business Question for Plumbers

                              Originally posted by NHMaster3015 View Post
                              Right on! Over the years way way too many contractors have made promises and broken contracts. After a while you get so you don't trust any of them. A few years back I got burned for over 20 grand from a "reputable" contractor who went chapter 11. Ended up in court with the Judge ordering him to pay 10 cents on the dollar. Again, I never let the contractor dictate the payment terms and guess what? 30 years later, I'm still in business while most of the G.C.'s have come and gone along with the plumbers that trusted them in the first place. Unfortunatly the building trades have always been filled with get rich quick scumbags that have no problem taking their cut and screwing everyone else.
                              Now that I can certainly understand. I keep forgetting about where I live. I wouldn't say I live in Mayberry, but its close.
                              Great Link for a Construction Owner/Tradesmen, and just say Garager sent you....

                              http://www.contractorspub.com

                              A good climbing rope will last you 3 to 5 years, a bad climbing rope will last you a life time !!!

                              Comment

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