contracts how do you guys do them - chris smith

chris smith_2

mark,
so you do heat loss design and materials for every job or bid for free give them the design and then maybee get the job, i work on a referralls busssss this is what i'll charge you this is what you pay you have seen my work yes or no, most of my custimer base comes frome referals people see, feel what i do and want it i'm a 1 1/3 man shop so i can't waste time with dreamers diff worlds
chris smith
porter maine
paradise

chris smith_2

contracts how do you guys do themchris smith

hi all,
how do you guys do contracts, i would like to go from 1/2 down 1/2 at compleation, to one third when we sign contract one third when we start and one third upon compleation!!
chris smith
porter maine
paradise

Warmfoot

Contracts

We have a schedule of value attached to the work authorization that all of our clients sign. We get 20% up front and then a percentage based on work completed or materials on site. Usually it is 20-25% after rough-in, 20-30% after tubing is installed, 30-40% for the boiler and mechanical is on site or installed and 5-10% after trim out or final walk-through. I have found that most clients are working through there bank and the bank will not pay out money until certain times of the month. If I have done previous jobs with the contractor and know they are respectable and pay there bills on time, I will start without money up front. If it is a new client/contractor, I always make sure I get money up front!

Ernie

To Learn More About This Contractor, Click Here to Visit Their Ad in "Find A Contractor"

Mark Eatherton1

We don't get anything up front...

We do progressive billings based on work completed. Guess that's one of the things that makes us different from our competition. We have a line of credit. That's what we use for paying for our materials. The cost of the line of credit is bourne by all who do business with us. Just seemed like a more professional way of doing business.

I personally don't like giving money to someone for nothing rendered. Deliver materials, I'll give you money. Show up and work, I'll give you money. Ask me for money to pay for materials, and I'll ask for the name of the warehouse or wholesale supplier you want me to make the check out to to get those materials. Tell me you want it in your company name, and I'll find someone else to do business with. I don't want you using my money to pay for the materials you used on your last job. Been there, done that, hated it every step of the way.

I know a lot of people that disagree with me on this, but I find that if you are doing business correctly, and charging enough money, your customer shouldn't have to play bank for you.

Everyone is entitled to their opinion, and that's just mine.

ME

To Learn More About This Contractor, Click Here to Visit Their Ad in "Find A Contractor"

Wayco Wayne

I'm a

40-40 20 guy. 40% to begin work. 40% when all materials are on the job, and the balance when all is done. Some contractors I give a 30-30-40 ratio. But their usually big contractors that tell me what it will be if I want to work under them. Homeowners get the 40-40-20.

heatboy

I usually do the same.........

on projects that will take 6 mos. or better to finish. I'm not a bank and neither are my clients. You should never hold a clients money unless it it going immediately towards something on that project. With some of the pre-qualifiers I have implemented over the years and listening to my little voice, I have never been stuck for more than a few hundred dollars.

Payment schedules are dictated by the project. When a phase is completed payment is made. When I order the boiler room or mechanicals, the payment for said materials is paid upon arival on the jobsite. There is always roughly 10% of the overall project left at the end for final walk through. There could be 6 or 8 payments throughout the project. It is, in my opinion, more professional if I do it that way. You see it all of the time on the news where "contractors" take deposits and never return. Makes us all look bad. Whether you want to believe it or not, your client must like, trust and respect you if you want them to give the kind of money all of our projects cost. One of my clients told me that when these kind of monies are involved , at some point they must take a leap of faith. Those words have stuck with me since. If they don't like you, they will not spend money with you. Period. I prefer to become friends with my clients, it makes the project run smoother.

hb

To Learn More About This Contractor, Click Here to Visit Their Ad in "Find A Contractor"

John Felciano

Money

I usually only ask for a small deposit apon acceptance of a contract usually around $500.00-$1000.00.The exchange of money, no matter how small seals the contract.All our customers are prequalified before we get to that point.After that payments are due after each phase of the installation,or on delivery of equipment,and work doesn't procede until they are payed up.

I agree with Mark and Jeff.I want to put the customer at ease with me and develop trust.Personally if someone asked me for half up front I would be looking for someone else.My concern would be that they are in financial trouble and need my money to pay off the material from their last job.Just my personal opinion as a consumer.



To Learn More About This Contractor, Click Here to Visit Their Ad in "Find A Contractor"

Bill_14

Totally agree

with Mark. It is simply not a good business practice in my opinion. Working off a contract amount with progress payments based on aq percentage of work completed is the very best approach.

If you want to invoice on a bi-weekly basis or a monthly basis, it doesn't matter as long as you are consistent and fair with your progress billings.

The customer doesn't owe anything until something is completed. Managing cash flow is an integral part of managing a business.

Bill Russell

Massplumber

I'm with wayne...40/40/20. 40 to start...40 after rough inspection...20 at finish.

chris smith_2

money

i think most of you guys work a little diff than i do about 65% of a jobs cost for me is materials, the time between first check and compleation is usaully less than 2 weeks,on a boiler change out 2 days, on new houses i work with the banks schedule sometimes, sometimes the home owner pays me out of pocket and then recoups from bank. last year i had approx $6,000 in unpaid billing looking to reduce that. it has also been my experiance that those who don't like to pay something up front are those you have to chase for your cash when the job is done. as far as working with gc's and getting paid when they do thats its own can of worms ever waited on a check because the counter tops were back ordered
been there done that. my reputation is such that i don't have much in the way of trust issues i live and work in a small town pop 1300 you screw up everyone knows

chris smith

Paul Pollets_2

Contract billings

I slightly disagree, Mark. We always take a 20-35% deposit in advance of jobstart, then bill progress in accordance to work completed. This allows us to NOT have to be the bank for the client. And it allows us to do 30 days worth of work without worrying about how fast the client pays or having to present another progress billing. It also shows the client we're worth the money. I'm not in the habit of financing very wealthy tech millionaires. I also don't agree with the typical "10%" contract deposit. Fooey. It doesn't even pay for mobilization, much less thorough design. The contractor gets to set the contract terms. Yes, they are often negotiated. Clients that want to beat up the contractor to "reduce costs" or lower contract deposits, are questionable, IMHO. Each must be treated with care and firmness. Most contractors in this trade let work get way far ahead of the billings and payments.

To Learn More About This Contractor, Click Here to Visit Their Ad in "Find A Contractor"

hr

If the job requires special order materials

I explain this to the customer and I take a deposit before starting. (Not a lot of radiant materials on the shelf around here) This locks them in to my contract. I have had customers OK my proposal, I order in a boiler or materials and find they have gone elsewhere. Which is probablt better inthe long run

Simple jobs with "in stock materials" I take a first draw at delivery of materials to the jobsite, usually 1/3.

On large new construction jobs, with construction loans, I bill in increments and try to hit the CG draw schedule. Most lending institutions, around here do site visits to assure progress and materials on site.I reserve my last 10% upon inspection and approval of MY portion of the job.

Make sure the bank or lending institution gets a copy of your bid. I have seen GCs forget to include a subs number in the loan amount breakdown then do the old shuffle with all the other subs funds! If the bank knows your portion is X dollars you generally are safe.

hot rod

To Learn More About This Contractor, Click Here to Visit Their Ad in "Find A Contractor"

Bill_14

Yes,

I forgot about special order items...that is a valid exception. Even though you have a signed and executed contract, the customer could still "walk" and leave you with some stuff that would not be used for awhile, if ever.

Most stuff though is returnable less a restocking fee...sometimes as much as 50% though, plus all the time hassle. I still basically believe that you should bill as you complete your work.

Don't forget to include your markup on these special items when requesting a deposit.

Bill Russell

Bill_14

A friend of mine

contracted for a new swimming pool in his back yard four weeks ago. The pool guy got the job, even though he was 5% high on a $35,000 job. The reason he got the job...the only reason...was that he could start "by the end of the week and be finished by Labor Day".

You might be getting ahead of me, but I'll keep going anyway.

The pool guy needed 33% down before he could start...two weeks after the check was cashed, the pool guy stopped by to see if he could start right after the 4th of July weekend.

This job will be interesting to follow because my friend knows he should have never paid a penny in advance...now.

Bill Russell

Rit Roberts

Contracts

I am sure each state is different but I believe here in Maine the state requires a "Home Construction Contract" on all work that is over $1500. They also limit the downpayment to a max. of 1/3 of the total. Call your lawyer or the state to stay safe.