Plumbing Schedule of Payments

Man with a question

I'm a radiant heat contractor who also holds a plumbing license. In the past I have used that license mostly for boilers and water heaters. I will begin taking on whole house plumbing contracts in the near future and would like some suggestions on how to set up a schedule of payments on a complete residential plumbing contract. What $ do you ask for at what time? How many progress payments?

Look forward to your input.

Thanks

grindog

get as much as you can

Most of the contractors i work with pay me 2/3 after roug hinspection and final payment after last inspection. Some will give money in 1/3 icrements. But try to get as much up front as possible especially if it is some one new to tyyou

Weezbo

for the most part you need to cover your costs...

so, you would like to see 60 to 80 % at the rough -in inspection. the remainder after the finish..to me it then allows you to always stay solvent and order parts earlier and arrange for delivery and make sure there are lock sets on the door priopr to the delivery of the boiler and components...that is Standard as far as i know...*~/:)

Weezbo

site is acting s L O WWW..........

Al Letellier

payment schedule

Everyone's costs and financial situations are different. You have to look at YOUR situation when deciding how to set up payments. We are not in the construction financing business and you have to figure that out yourself. Always get a "good faith" deposit up front (limited by law in some states) and set up a payment schedule that meets your financial needs to keep the cash flowing. Your contract should reservethe right to do progress billing every 30 days should construction delays keep you from making progress and reaching your next billing opportunity in a timely manner. If the contractor doesn't agree, blow him off. There is plenty of work out there!!!!

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hr

It may depend on the loan

arrangement also. Banks don't like sub contractors getting too far ahead on the payment Your payments may have to match the dollar amount, on the job, fairly closely.

However, if a lot of special order finish parts are needed that are not restockable it is a good idea to get these covered before the final payment. Folks have a habit of changing their mind after you order a special sky blue pink (non returnable) Kohler bidet

If this is new construction plumbing you are considering think it through carefully. Typically a hard place to make good margins. Too much of a low bid ball game and lots of changes in custom homes make this a though go, often times.

Service work and niche market stuff like top notch hydronic or hybrid HVAC has a much better profit potential. Look at expanding or growing this market before you jump into the new construction "reverse auction" game

hot rod



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Mark Eatherton1

What HR said...

unless you're a masochistic son of a gun, I'd avoid the new construction field. To full of people that don't know what they're doing, or why. Just blowin' and a goin', losing money every step of the way. Seems the only one coming close to making ANY money is the builder, and he has to beat up all his subs to do that.

We have one new home builder that we work for and he doesn't ask for competetive bids, nor will he try and talk our price down. He understands the value of our service, having been raked by every other supposed expert in the neighborhood. He is a RARITY.

As for progressive billing, as the name implies, you bill for work as it gets done. Make sure you know when the contractors cut off date is so you can get your bills to him in a timely manner. Figure it will take him 30 to 45 days to get you your money from the time of submittal, and figure that interest into the job. He is, why shouldn't you?

As for playing bank, we have a line of credit that we use to temporairly subsidize our cost of doing business, and that cost is rolled into the overhead. Everyone helps pay for it. We've also never asked for money up front, and I know thats viewed as being somewhat controversial, but it sets us apart from the competition.

Look before you leap, make sure you're covering your direct and indirect costs, and don't let your business run you into the ground. It looks real tempting from the outside, but once you're in, it takes on a whole new (and UGLY) appearance.

Just my $0.02 worth.

ME

Mad Dog

We usuaslly get

50% at start of project, 30-40% after rough, remainder upon finish. We've had too mnay jobs that yoiu wind up waiting 3-4 months to do the finish due to construction delays. That leaves way to much at the end. On many jobs we do, the finish work is 1-2 days tops. That used to leave us cash-starved. No more. Mad Dog

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Weezbo

*~/:).......

it is indeed as you and hot rod say...when you work in the service world you get a healthy dosage of what can be done ,what Not to do ,what is acceptable and what is Right...from there you can develope into your own set of standards you'd like to up keep in general in mass as it were then there are jobs that you get that you are allowed some degree of responsible expenditure slightly beyon the current quality and include various quality products controls and equipment...these jobs are what i consider my favorite things to do...the pricing structure on these needs careful thought as there are indiscrepencies as to just what texture of sky blue pink the individual had in mind....and if you are speaking of the3600$ & 4600 $ variety of toilet ,misunderstandings Cannot occur too often...the freestanding red enamel with gold gilded claw leg bath tub and attending periperahry accouterments cannot be left to chance either....a multi temp zoned injection system with caravaned boilers and zippidty dodah controls and heated bench seats steam room and asanas indoor olymic wave formers ) well,these jobs expend time just in the description ,logistics..er ... well now , that is somewhat left up to the grace of God in my life....:)i cannot say howmany times a day a guy can think Thank GOD! i gotta rrun ...solly ..BRB in 5-6 hours...

Dave Stroman

I had a few jobs where I got my 70% at rough in and then the job never finished. After several months it is hard to go after any more money. I usually calculate what it will take to finish the job and set that as the final payment. On real big jobs I have had a % upon completion of waste and vents, a % upon completion of water pipe, and so on with gas pipe, ect.

Dave in Denver

Wethead7

payment

We tend to bill 1/3 at compleion of under slab, 1/2 at copletion of rough-in, The rest at trim. Final inspection at that time. They have thirty days to pay before late payment fees come in. The standard 10% witholding is permitted, but if the any of the following happen then withhold is not allowed and the builder is in defualt.

We also charge extra for cutting out counter tops[$150.00each hole],counter opening not lined-up or unable to access clamps or plumbing[$250.00], customer calls needs personel on site and no work can be preformed(not ready){$175.00 an hour two hours min.}, Floors not installed for trim out they called said ready[$150.00], Power not on and light fixtures installed and working[$150.00], other subs damaging our work[two hour min. and parts( wall/floor/ cieling repair is on the builder], paint amd trim should be completed before trim out if not[$150.00].

You may think we have allot of charges. These are limited part of the list. The rates may seam high, but the new to have some control over the GC and keeping the staff in a planned and orderly production cycle. The above and other charges are part of our standard contract. The first time local GC's saw the contract they would not sign them. They got over it.

I'am not part of the construction side of the firm. The service side keeps me occupied enough.

Mike

Geo_5

Payment

45/45/10... has not failed me yet lets face it, if your going to get it(stiffed), it's going to happen around the finish and having 1/3 out there for finish just never worked for me.How many of us have had the GC or the HO do the finish and you never see your final payment.

C. Faucher

50/25/25 allways worked for me.Usually cool with the builders to. I like the 45/45/10 but I think that would be a hard sell.

Before I got in bed with any builder I did my homework.I check with the local inspector to see what the deal was with the last Plumber/HVAC guy? Most of the time the inspector will give you the straight story. Usually plumber is a hack or builder is a dead beat. Nice to know before you bid!