Do you require a deposit?

[bkludecke]

I've been in business for, oh, 13 years or so and I don't take deposits in general. How soon can I expect to go out of business?

Amen! I've been in business in the same community for 29years and I don't ask for deposits either (I actually refuse them when offered). So I guess I'm on borrowed time. As I wrote earlier in this thread, the restrictions in CA for taking a down oayment are such that it's not worth it anyway.

 

[Sonny Boy]

Good replies

Good replies

I ask for 30-50%. Lets me know ahead of time of the check will clear the bank.
Heard a story from a bank teller that her son just started a business and got ripped for 5600 buckos after completing the job. I asked her if he got a deposit. Her answer was No.

 

[petersonra]

Don't expect to be in business long, if you do any job without a deposit! and if it is a day job, more then $300 and a new customer, I recommend you get their drivers lic, infor, and a verified credit card voucher signed, before you start the job, we still have to lock our doors in this area of the country.

For most small business, $300 is a lot of money, a thousand loss can be a train wreck, most small contractors 70% of the charges are for pay outs, money they pay others to operate the business, a $300 bill to the customer may give the contractor $90 if he is lucky, residential customers usually think in terms of their hourly rate, they usually do not understand the cost of doing business, on the other side of the issue, commercial customers that are operating a business, do understand your position.

I am talking from a consumer side. Most $1000 jobs are one day things where the upfront parts cost exposure on a contractor's part is limited to a few hours. I write them a check and they away paid in full. Got my new water heater that way, furnace and A/C, new gas line out to the garage, etc.

Only times I went the deposit way was a bathroom, siding, and deck. All three were a nightmare.

 

[satcom]

"I am talking from a consumer side. Most $1000 jobs are one day things where the upfront parts cost exposure on a contractor's part is limited to a few hours"

On service calls, i can understand. But I am not in the banking business, and all the work we do other then service calls are contracts, which require a deposit to enforce, in my state.

Many companies here want payment up front for service calls, or a credit check, before doing a service call, Our washer needed repair, they wanted a $90 payment on the credit card, before making the call. When our sewer backed up they wanted a $120 payment on a credit card before comming. I remember when the wind took off part of the roof, called 5 roofers, they all wanted $150 to $200 just for an estimate, Try to get any construction job done around here and they want from 30 to 50% down with few exceptions.

Very intresting to see how different business works, in other parts of the country.

 

[jjhoward]

I now always ask (and get) a deposit for projects that require $500 or more in materials. I do only residential, and when I started I did not ask for the desposits. I found myself holding materials while waiting for permits and homeowners schedules to line up....
With a deposit in hand, it is OK if I have to wait 2 weeks for a permit or for the scheduling of the job to get finalizied. The amount of the deposit that I ask for is an estimate of the materials needed.