Paying deposit before builder starts working??

phill99

jkpd wrote: »

Think you find most people buying from dfs use intrest free credit over a few years same for b&q etc,I dont know any contractors who ask for a deposit,not very professional as far as most people are concerned, as for getting stung thats all part of running a buisness if you cant handle that then you should consider doing something else,I dont need to get real, but may I suggest you enroll for a course on "how to run a buisness" you would probaly benifet, and i mean that in a nice way!

You need to enrol on a course on how to spell.

And its evident that you have never been in business. And I reiterate. The amount of jobs I have lost as a result of asking for a deposit is precisely none.

Knob jockey.

keystone

Different people have different business models. Thats life. In the greater scheme of things financing the initial cash outflow for materials on a job just adds to overheads which in turn affects prices upwards. Clients can't have it both ways.

And jkpd - Brenster hasn't got it spot on at all. He's viewing the situation from a company employee perspective. Bet his company asks for a payment schedule for major contracts including downpayments and if its an overseas client they'll be wanting a confirmed, divisible, irrevocable LOC too. If they don't then the Commercial Director wants sh...ing.

Too many "customers" out there taking the pi$$ these days over payments and/or nickel and diming the invoices when they come in.

Cheers

Tom_Jones

phill99 wrote: »

You need to enrol on a course on how to spell.

And its evident that you have never been in business. And I reiterate. The amount of jobs I have lost as a result of asking for a deposit is precisely none.

Knob jockey.

With your attitude there's a wonder you get any work at all.

jkpd

phill 99 you got it so wrong, im currently a company director of my company which I started while i was a partner in my family buisness,the largest domestic job i done was 1.2milllion, and i reguarly turn over 50k a month which is less than the family buisness use to, I have never been without work in 25years not even a single day, I have enough work to see me through to next year,in my spare time i work on my own projects,currently a substanial new build,this is how I have made the bulk of my money over the years, as for running a buisness, I have been succesfully for 22 years. As for my spelling,their is a good reason for that and it begins with D and i cant spell it.

phill99

jkpd wrote: »

phill 99 you got it so wrong, im currently a company director of my company which I started while i was a partner in my family buisness,the largest domestic job i done was 1.2milllion, and i reguarly turn over 50k a month which is less than the family buisness use to, I have never been without work in 25years not even a single day, I have enough work to see me through to next year,in my spare time i work on my own projects,currently a substanial new build,this is how I have made the bulk of my money over the years, as for running a buisness, I have been succesfully for 22 years. As for my spelling,their is a good reason for that and it begins with D and i cant spell it.

But you and I work in different markets.

In your kind of market deposits are not commonplace. But you (I guess) have contracts in place that schedule payment points and a QS to monitor. My work is typically done on an agreed specification and an exchange of letters. I also do a lot of insurance work. Some paid by the insurance companies directly and some by the customer who have received a cash settlement from their insurers. Even insurance companies have paid deposits.

And you will find that most companies in my league will seek a deposit and then draw down money as the work progresses. Small operators don't have cash reserves and are not in a position to take a hit. The vast majority of construction tradesmen in the country operate on a self employed/single director limited company basis and cash flow is critical.

My largest job was about £25k. Typically £5 - £10k is the norm. I don't have the cash reserves oir revenue that companies like yours does. Nor do I have the resources or time to put defaulting clients through courts. So to say that asking for a deposit is not the done thing and that it is unprofessional is not true.

Professionalism is (amongst many other things) about managing your clients, acting responsibly, turning up when you say you will and being corteous to your clients. Its not about how you manage cash flow.

And I reiterate, most large companies require deposits and this is seen as the norm, especially when dealing with end users. Anglian, Everest, Betta Living, Sharps Bedrooms, Dolphin Bathrooms, etc etc etc all require deposits before they will commence works.

I am pleased that you have been successful, but you need to accept that reality is actually quite different from the way you perceive it.

southcoastrgi

yes i agree every builder i have ever worked for has asked for a deposit from the customer before starting work, it's normal practice at least around here & smaller building companies

greenface

phill99 wrote: »

And your point is what exactly?

I have read it and it interested me so may do some help to others . I have a customer who insisted only paying for materials once on site for a extension. Lots of materials turned up she paid builder(3.5k for materials) .Builder never put a spade in the ground as he was "just finishing another job " Materials stayed there for about 4 weeks until the building suppliers took them back as the bill wasnt paid . Builder went bust .Deposits are somtimes no basis of trust either way.

Brenster

Quite a debate going on on here ! Yes Phill99 I mainly work on larger projects over £100k upto £10m for a consultant. And on these projects we never pay up front, only at the end of the month, when the work is valued, and by the time the payment is processed another 2 weeks has passed, so in effect before the contractor gets paid, they have forked out for 6 weeks, that is just the way modern day contracts work.

However I also price works for builders such as yourself for works between £5k adn £150k, and they do not ask for a deposit either.

Its the way the construction industry works, their are to many cowboys out their, and unfortunately all builders are tarred with the same brush. But I would still always advise a client not to pay a deposit.

Cant see why your getting personal against jkpd its just a discussion, not an argument.

southcoastrgi

Brenster wrote: »

Quite a debate going on on here ! Yes Phill99 I mainly work on larger projects over £100k upto £10m for a consultant. And on these projects we never pay up front, only at the end of the month, when the work is valued, and by the time the payment is processed another 2 weeks has passed, so in effect before the contractor gets paid, they have forked out for 6 weeks, that is just the way modern day contracts work.

However I also price works for builders such as yourself for works between £5k adn £150k, and they do not ask for a deposit either.

Its the way the construction industry works, their are to many cowboys out their, and unfortunately all builders are tarred with the same brush. But I would still always advise a client not to pay a deposit.

Cant see why your getting personal against jkpd its just a discussion, not an argument.

but that is why the building industry is going down the pan, why should customers not pay a deposit when they sign a contract it shows good faith between both parties, i sometimes sub for a couple of guys they did a job for a company called GSI it was a heating system & a number of toilets in a factory unit, the co went bust owing 1/2 million pounds, they lost £20k, at the creditors meeting last wk there was 104 contractors/companies that were owed £4k or more yet as it was a limited co the guy comes out of it scot free, had they got a deposit at least the materials would have paid for.

phill99

Brenster wrote: »

Quite a debate going on on here ! Yes Phill99 I mainly work on larger projects over £100k upto £10m for a consultant. And on these projects we never pay up front, only at the end of the month, when the work is valued, and by the time the payment is processed another 2 weeks has passed, so in effect before the contractor gets paid, they have forked out for 6 weeks, that is just the way modern day contracts work.

However I also price works for builders such as yourself for works between £5k adn £150k, and they do not ask for a deposit either.

Its the way the construction industry works, their are to many cowboys out their, and unfortunately all builders are tarred with the same brush. But I would still always advise a client not to pay a deposit.

Cant see why your getting personal against jkpd its just a discussion, not an argument.

But you seem to deal with business to business relationships. And there lies the difference. B2B don't expect to pay or receive deposits. The business system is set up differently.

But I deal with Mr & Mrs Smith or Jones in their 3 bed semi or 2 bed terrace in Smalltownsville. I don't know these people from Adam and they don't know me. I don't know the state of their finances. With B2B you can do checks at Companies House to see their trading position and whether they have cash flow. You can't do that with Mr & Mrs Average. So I have to cover my back. Thats why I ask for a deposit. Just the same way B & Q ask for a dep[osit, as do Everest, Anglian, Weatherseal etc. And no homeowner refuses to pay a deposit as they know they wont get their kitchen fitted or their windows installed.

I'm pis"ed of with jkpd as he insists that that the same business model fits everone and it clearly doesn't. Everyone works in a different way to suit their circumstances.