I've never collected deposits from customers because alteration work is generally a pay per service/piece trade; it's labor/knowledge intensive. Supplies are usually negligeable (zippers, interfacing, buttons/snaps, etc.) and they're items I have on hand that are certainly not expensive to stock. But now I want to move into work that requires a more expensive supply inventory; specific fabrics/supply requirements. How do you guys handle deposits? how much do you require? do you base the deposit amount on the total job estimate? need help... don't want to struggle any more than I must to bring my fledgling business "up to speed".
I think everyone has a different policy. for me if it's a good repeat customer or a small job with not many supplies I just take it in and do it. People I don't know as well or bigger jobs with lots of supplies involved I get half down. I think standard deposits woud be anywhere from a third to half down. Make up a binding contract too that states everything in writting so both you and the customer know what to expect.
Kyle
My longtime regular customers would be highly offended if I asked for a deposit.
But on all "new" customers, I get a deposit to cover the material. If they furnish their own material, then I consider THAT to be their deposit.
Years ago, we had a competitor in town that got a bunch of deposits, and then "flew the coop". So, for a very long time after that, local customers were very dis-trusting about laying down a deposit.
Nowadays, most customers offer up a deposit without being asked.
I really only have one rule regarding deposits: They're NON-REFUNDABLE.
So, if the customer changes their mind before I start their job, too bad.
As for that binding contract thing. I probably should do that. But I never have.
I guess I'm going to have to get burned once in order to motovate me to draw one up.
When I was located in Upstate NY I would require a deposit in order to be placed on the schedule. Old time customers were exempt from this as I knew them.
Here in Florida I require a 50% deposit for the complete estimate. Scheduling isn't as strong here but I have been burnt before and it hurts. :o
As for a contract. I come from the hand shake world. My word is good and I think any customer willing to give a deposit is also. I do write up a work order / estimate explaining what will be done. No signature required.
I had a sailboat owner call me t bit on a dodger recover and new bimini . I didnt get the job but was called later 6 months. he didnt like the job and asked me to come bid look at it again, he wanted me to do it and i make up a contract but he balked when i asked for a deposite. I said I always get this to oprder materials and sheduale the work in. he said he never givesd deposts. i told he then that I would sheduale the work but the day I come to pattern the canvas ill ned the deposite. then ill order the materials. he said OK and signed the deal. this was friday. sundayt he called me to cancle the job that when i lost it and told him this is exactly why I need a deposit ??? me i ask for a 1/3 down. it makes the foinal payment more fun and most people are good. I only had one guy s#%ew me around in the past 6 years here in FL. and only one before that in NH total in 21 years
Quote from: Mike8560 on October 09, 2010, 05:31:41 pm
i told he then that I would sheduale the work but the day I come to pattern the canvas ill ned the deposite. then ill order the materials. he said OK and signed the deal. this was friday.
Smart move. At least it just screwed up you're schedule and not your wallet.
The PRO Stitch Check-In Form is filled out and SIGNED by the customer (I can send you a blank copy if you hop over to the facebook local business page -- search/PRO Stitch and give me your contact info). Not only does this state a deposit is required, but also that the customer agrees to accept the job upon removal, AND any balking (cancel payment, etc) will be met with sending the account to a collection agency. The customer agrees that the collection agency gets fees above and beyond what I am owed.
I figure up an estimate of cost, most notably the materials that will be needed. That is the amount of deposit I require. Then, if they decide to cancel the job, I've not lost anything but maybe a day on teh schedule. If that happens, I also a lot of times end up keeping the material and selling reselling it, or my suppliers let me return it, and I've made profit on the retail cost. For instance, today I sent a .pdf copy of the check-in form to a customer to complete and return to me with their deposit on a Honda S2000 convertible top. The top alone is in the $1,000 range, so I'm NOT one to front that kind of money.
I always get a 50% deposit on the total estimate and it takes a deposit to get on the schedule. I also have my competitors business cards on my desk if they want to look someplace else.
50% of my Estimate for a deposit, also. The remainder is due when the job is finished.
Any fabric or other big costs, such as new foam for outdoor furniture cushions, is paid in full along with my deposit.
It has never happened to me, but, if a customer dies, changes their mind, gets into a nasty divorce proceeding, disappears, becomes a monastic hermit, or whatever, I at least have some of my labor paid for, all the big supplies paid for, and the furniture to donate to the free store.
Also, the perceived value of a product or service diminishes greatly as soon as the product or service is delivered or rendered.
My business adviser says, "If the job is $50.00, get a deposit for $25.00.
Gene
Quote from: stitcher_guy on October 09, 2010, 07:10:04 pm
The PRO Stitch Check-In Form is filled out and SIGNED by the customer (I can send you a blank copy if you hop over to the facebook local business page -- search/PRO Stitch and give me your contact info). Not only does this state a deposit is required, but also that the customer agrees to accept the job upon removal, AND any balking (cancel payment, etc) will be met with sending the account to a collection agency. The customer agrees that the collection agency gets fees above and beyond what I am owed.
I figure up an estimate of cost, most notably the materials that will be needed. That is the amount of deposit I require. Then, if they decide to cancel the job, I've not lost anything but maybe a day on teh schedule. If that happens, I also a lot of times end up keeping the material and selling reselling it, or my suppliers let me return it, and I've made profit on the retail cost. For instance, today I sent a .pdf copy of the check-in form to a customer to complete and return to me with their deposit on a Honda S2000 convertible top. The top alone is in the $1,000 range, so I'm NOT one to front that kind of money.
This
And, for the record, I did have a guy die on me. Key fob Singer 68 class. I got half up front. And I got stuck with the custom one of a kind machine nobody else but him could have used. Can you say loss? Seems I always have a custom order machine or even repair or parts I need to chase someone down for.
I had a customer Die on me years ago (well not on me, but you know) I restored a 60 Buick from the ground up and this guy was a VP for a investment firm in St. Louis. Luckily, all materials were paid for in advance with just the labor bill to be paid on completion. His son inherited the car and flew in from Seattle to see it after his fathers passing. His only complaint was asking me why wasn't the chrome plating re-done, to which I replied "I tried to get your father to do it but he didn't want to pay for it."
It turned out ok in the end and the son paid to get everything re-chromed then paid me the labor, but I saw that it could really go the other way too. That's why I do contracts now to know exactly whats expected of me and the customer.
I posted earlier that I only take deposits on big jobs or people I don't know. I was actually burned several years ago by the preacher of our church. I had a charge account at the local parts store and I did a valve job on his car, rebuilt the transmission, and put a new engine on his lawn mower that blew up. charging all the parts to my account. I finished the jobs and he was paying me here and there a little at a time.
It wasn't long into this he was asked to leave the church when another in the congregation who the preacher helped set up a business fabricating tug boats and barges discovered his bank account was down over $200,000.
the preacher split town before his family found out what was going on never to be seen or heard from again. He left me with about a $1000. charge account I owed not to mention the labor cost.
Just from the reminder I've had from this post I guess I need to start collecting deposits from every job I do. Oh well, we're still in church doing better than ever. I suppose that would turn some people off from ever going again.
Kyle
Quote from: SHHR on October 16, 2010, 07:12:55 am
Just from the reminder I've had from this post I guess I need to start collecting deposits from every job I do.
Kyle
And why not?
Goes to show you NEVER know who is going to stiff you. Sure, over time you develop a sense of things, but you still never know. Even large companies, and like said, when they go out, the leave a lot of folks hanging.
If they can't won't pay half up front, how the heck are they going to be able to pay in full, say a week later when the job is done? Deposits work both ways, and in many cases protect both parties involved.
Especially these days.
Hey, when my local paper is running low on obituaries, they call me. Because ALL of my customers have just had a death in the family (now that it's time to pick-up, and PAY for their furniture).
I almost always get 50% down for any canvas fabrication or seat recovering even if it's a regular customer. This policy keeps me out of the soup kitchen!
I get 50% down from most customers, the only ones I let slide are my regular accounts and they supply their own fabric anyway. My estimate doubles as a work order, it has a written disclaimer that also gives me a mechanics lean on anything they should drop off and releases me from any liability for damages that may happen to their property.
I typically ask for 50% with the deposit being non-refundable once materials are ordered (agreed upon in the signing). In the busy season of canvas work, the money down along with the binding agreement are required to get on the schedule. Its really obnoxious to stick to, but when I tried to be nice I got burned related to my schedule too many times. I was waiting until the project was here to order materials at the time, but that delay got old.