It depends on the nature of the contractor. If you`re using a general contractor or custom builder, a requirement for 50% of the entire order is far too steep in advance. Typical pre-and-retainers/instalments for significant improvements should be in the 10-20% range. @Jennifer Jacobs, the best way to build a relationship is to separate it from your team. Vet promoter friendly contractors who understand both your budget and the execution schedule. Like any other supplier with whom you do business regularly, you must establish relationships with your contractors. In this way, it didn`t focus on the overhead-benefits of a project, but it focused on the amount of work you could bring immediately and long-term. Also, you don`t expect these guys to support your project and be profitable. You will probably have one or the other. If you expect them to support the project and some will increase your costs just right. Please note that the day-to-day management of these guys is an acquired skill. Until you learn these skills, please use an experienced site manager or mentor to manage your contracting relationships. You manage the acquisition policy of projects, the scope of thought, specifications, production plans, necessary authorizations, communication, execution plans, liscence and insurance limits, etc.
I know that if the contractor funds a large part of it himself, sometimes short of money and he has to spend money to work on another job, it slows down my project. We have contacted several serious companies and all of them are asking for a down payment of 25-50% in advance. Perhaps you can place the deposit in a trust account? For subcontractors, this is a good way to get a down payment for a project to improve cash flow and make sure you can pay for your materials. For CGs, the requirement to pay a deposit can reduce cash flow. It can also scare them to know if a sub-performer will once they make the down payment. In, Its by for most contractors, we don`t personally follow all these “Everyone makes standards`, and collect monies in advance. I think if you`re in this business, you should have the finances to manage your business. But that`s just my opinion. Always check your contractor`s background as well as ask for some recent recommendations, before handing over funds for some reason.
Cover up, and make the payment payable to the company, not the person. But before you lean back to convince your GC that you deserve a deposit, you contact your own office manager or credit team. Take a close look at your own collection practices. If you don`t have enough cash to start a new no-deposit project, your team probably won`t take appropriate steps to protect the payment of your current orders. A contractor`s cash flow is more important than a single project. The faster you can get paid for the work you`ve already done, the more money you have available to take on new, bigger jobs – with or without a deposit. I just entreine tumbleweeds of real estate I do not excavate at all we clean the garbage on the ground load a trailer and tow them to the landfill requires a contractor license I do not do it only by the hour What do you do if your contractor asks for a security deposit? I`ve been in business for over 25 years and I`ve never asked for less than 33% down, but my projects are not nickel and Dime, so your $30,000 invested in a project, even before they even have a penny and the client returns the one on whom they win the lawyers are not the contractor.