Steve Payne
A deposit allows us to pay our creditors even if we end up working for free ourselves
Bridget Piper makes an eloquent defence of the often 50 per cent deposits that her family-run firm asks for
Here’s a post from Bridget Piper replying to Alex Beraskow’s “no deposit necessary” post last week. Alex did have his supporters, but not too many – and certainly not Bridget.
“We are a small company with an A+ BBB and 5 star Trusted Pros rating. We ask a 50% deposit from our clients upon signing. This is perfectly reasonable as we have large items to buy such as walk-in tubs, showers, cabinetry, counter tops, faucets, etc. costing thousands of dollars prior to starting work. In effect, we work and remain unpaid until the job is done to the satisfaction of the client.
Alex Beraskow implied that any contractor asking for a deposit was a crook who had no business sense or intention of doing or completing a project.
As a small company, if a client defaults on payment, we are out of pocket. And to go through legal routes to regain that which is owed to us is very costly. SMALL BUSINESSES GO OUT OF BUSINESS because clients default and suppliers are owed.
The deposit limits our risk – and that is GOOD BUSINESS practice: We can pay our creditors even if we end up working for free ourselves, we have not defaulted. The deposit also limits the clients risk of us going out of business due to unpaid suppliers before completing the job.
Most businesses where orders are placed, carpet stores, for example, ask for a deposit and sometimes even full payment before the service is provided. Why is a contractor viewed as bad for doing the same?
Agreed there are bad contractors and clients that have been ripped off: We find we are often viewed as guilty until we prove ourselves innocent. That is hard enough without the likes of the writer planting the idea that any contractor asking for a deposit is a crook!
It is more important that the contractor does good paperwork. That the quote gives a full detailed breakdown as to what is to be done, what IS included and what is NOT included so the client has the full picture than whether the contractor asks a deposit or not.”
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I totally agree we are in the HVAC business and we always require a deposit. After all if the client is true to their word and they know that we will deliver to them as stipulated in the contract there are no worries. We after all, have to order all the materials and apply for the gas meter and so forth.