Billing Before Plans?

nadonailer

I've got a situation that's new (for me anyhow?) I was referred to a client that wants a fairly large remodel done. They are well recommended and really nice people (honest)
They didn't have any plans and only vague ideas, so I jumped in and did some rough drawings and came up with some bitchin' ideas, and thay are thrilled.
Well, you've already figured out that I haven't been paid yet, right? I've figured out roughly what this is gonna cost and its around $100k. I discussed that with them and they are fine with that price level. Now, they've offered to pay me for my plan/permit time, but I want to get a deposit to lock up the whole job. How would you guys go about this? I can't come up with a firm price because the plans won't be done until next week, so should I ask for 10% of $75k???? Don't want to scare them away either!
BW

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"History does not long entrust the care of freedom to the weak or the timid”.
Dwight D. Eisenhower

Tom R

I'd go ahead and get 10% of the 100, - - just tell 'em, - - 10% is your normal down payment to 'lock time' on the schedule. Getting 10% of 75 gives them false hope, - - it's comin' off their total either way.

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nadonailer

Thanks, Tom - I was thinkin' like that, it just helps to have some other experienced guys throw in their 2 cents! Usually I do my bid off of the plans, but in this case there weren't any!
Cheers!

__________________
"History does not long entrust the care of freedom to the weak or the timid”.
Dwight D. Eisenhower

tzzzz216

10% sounds pretty good to me too, heck if they were buying an existing house the banks would want 20 % down.




Try to send thses jobs overseas!!

GenConJ

I dont know if you have done this scale of work before so my suggestion may be irrevelant... but, when I was just getting started, I found myself struggling deciding on profit margins, deposits, rates and large dollar amounts in general.
It took awhile for me to realize that customers who wanted large projects done were expecting these charges and could afford them and while the amounts were far beyond what I (my family) could afford they were legitimate for the work quoted.
10% of anticipated project cost is fine and you can deduct the 10% from the initial deposit amount you calculate later. Its also the point in the process of filing the whole project or moving forward and lining up your subs and suppliers. The scope of work to be done is large and the deposit ensures you arent just wasting your time.

Best of luck,
Jason

DecksEtc

I don't think asking for a $10,000 deposit is too much for a job of the scale you describe. I think the phrase "pay me now or pay me later" really applies here. They're going to have to pay well over that $10,000 figure before you're done. I agree with Tom, you don't want to set them up for a surprise by having them think the total will be around $75,000 because despite the fact you pre-warned them it "could" be around $100,000. If you ask for a 10% deposit of $7,500 they're going to have that 10% figure in the back of their mind when you give them the real total. Also, don't forget change orders, a project this big is likely to have more than a few.

Mike Finley

Did I miss something? Is wanting to pay for plans/permit time the same as a deposit/down payment subtracted off the total job cost or does it mean a simple fee for the plans, whether they go through with the build or not, and would be in addition to the total job cost?