What do we do if they offer no deposit??? HELP - Contractor Talk - Professional Construction and Remodeling Forum

MAC2PAINTING · 10-12-2006, 02:49 PM

well we are futher with the new construction contract and we were informed today that this contract offers no deposit for materials so we are held to supply funds for all materials. we are a small company with no credit and no backup funds to support this action. We need this contract so bad to push us into a bigger copany.we are famialy owned
<mother and son> if you have any ideas let us know.

sincerly M.A.C. Painting

Brushslingers · 10-12-2006, 03:18 PM

My best advice is to get a turnkey that supplies paint, or a quick repaint that isn't exactly sure of colors (talk up the colors) so you can get a deposit and have them pick up the paint, spec'ing what store to go to. If you need it that bad, underbid everyone and take the hit. If you have no leads, make up some flyers real quick on that printer you have sitting over there and go door to door. Starting with no capital can hurt... you gotta beat feet to make it from behind. Good luck.

Btw - Tell your mom I think she rocks.. mother and son painting.

Oh, when I first started I made these cupons, 5 dollars off front door special.. and sold 200 dollar front door repaints to "make the house look new again".

Mike Finley · 10-12-2006, 04:07 PM

Well, if you can't afford to buy the materials and they won't supply them, it sounds like you are out of luck. Have you thought about throwing yourself on the mercy of the court and begging them to work something out with you? There is always the pawn shop, maybe you can pawn your car or something temporarily.

(and I get in trouble when I say something like contractors are some of the worst businessmen as a group.

)

mahlere · 10-12-2006, 04:29 PM

Quote:

Originally Posted by Mike Finley

(and I get in trouble when I say something like contractors are some of the worst businessmen as a group.

)

said that today in a conversation with my favorite supply house sales guy, he just started laughing in my ear, telling me how true it was, and how they talk about it all the time at the supply house.

It's just that most of us have never taken a business class in our life.

As for the painting, do not, I repeat do not, do the job. If you don't have the money to front for materials, how are you going to do it when you get bigger? This job will probably eat you up and spit you out. Leave you worse off than you are now.

What happens if their payments get delayed? Retainage? No Pay? Bounced check? If you can't take the loss, try a different table.

Good luck to you, but don't get greedy and don't lose focus of the BOTTOM line. The top line is pretty, but the bottom line puts out.

Joewho · 10-12-2006, 05:37 PM

This happend to me once. Had a Sherwin/Williams cash account, but didn't really buy much paint. My prices were good considering the small amount I bought. anyway, the store mgr. wouldn't give me credit, so I went online, did some research and found a corporate number with an e-mail addy. The guy gave me a 500 credit account.

Otherwise, when a gc wants the paint up front, even if I do have the money, I will only buy enough paint to do the spray out and then I need a payout. Usually more than the paint costs, so the initial paint is paid for and I have enough to move on for a little while.

I also try to make the final payout as small as the gc will go. This is to avoid having a lot of money tied up forever and a day waiting for final payout.

If you can't get a contract with payouts at each phase, leave it alone. The gc is probably in financial trouble if he can't get you paid on a schedule. If the HO won't come across with money, then you should get out too.

On the other hand, it's shows the integrity of your company to have enough money in reserve to do the work. In any situation other than new construction, you should be able to do this. The only reason not to with new construction is the possibility of getting burned.

In Nevada, you most certainly will have the money in reserve for the amount of the entire job, or you wont' be licensed. It sucks. lol

Richard · 10-12-2006, 05:43 PM

Quote:

Originally Posted by Joewho

This happend to me once.....

On the other hand, it's shows the integrity of your company to have enough money in reserve to do the work. In any situation other than new construction, you should be able to do this. The only reason not to with new construction is the possibility of getting burned.

In Nevada, you most certainly will have the money in reserve for the amount of the entire job, or you wont' be licensed. It sucks. lol

I dont usually have enough money in reserve to do a whole job. I'm newer in the bus. and am just getting real organized. I've had to invest a ton into my company, and insisted on not taking out big loans to do so. I'm just now trying to build up funds, but it's hard.

Joewho · 10-12-2006, 05:55 PM

I usually try to work alone, so not much money needed. However, I do like to get a deposit or at least a pay out along the way. It smooths the financial picture and let's me pay bills on time.

There's different perspectives on this. I'm not sure I want to work for someone who does not have the money to pay me, unless he gets paid from the customer. That's not good. Might as well be doing the job myself, and it isn't fair for the next guy to gamble with my labor to make a profit for himself.

I was on a new construction once, and the painter with the contract wanted me to wait to get paid, until he got paid. Long story short, he had to go get a loan to pay me.

AAPaint · 10-12-2006, 05:56 PM

Wow, Nevada sux. I don't worry about having the money because I focus all my energy on repaints and require 30% down to start. I won't consider doing a job if I'm paying for it. Nothing I do comes out of my pocket, and it's funny how many of my friends keep telling me to seek new work....hah!!

Even if I do new work, payment terms will stay the same. I like the customer's money being what pays for everything, and I couldn't see changing the way I run my company to work for some GC. I doubt many GC's would deal with me that way, and that's exactly why they're not my customers.

What I don't understand is why anyone assumes it's cool when you're working for a GC to just do the job on your own dime. Why is that? Because he's a big "GC"??? I hear more stories of people screwed by unscrupulous GC's than homeowners.

I know twelve people will be in to say "that's the way it is".....and I say "only if you want to work for someone else do they determine your pay structure"......

My advice would be to focus on work that will pay something up front so you're not footing the bill for materials. I do this every single day and have TONS of happy customers to show for it. Don't over extend yourself when you're so new.

Richard · 10-12-2006, 06:01 PM

Quote:

Originally Posted by AAPaint

Wow, Nevada sux. I don't worry about having the money because I focus all my energy on repaints and require 30% down to start. I won't consider doing a job if I'm paying for it. Nothing I do comes out of my pocket, and it's funny how many of my friends keep telling me to seek new work....hah!!

Even if I do new work, payment terms will stay the same. I like the customer's money being what pays for everything, and I couldn't see changing the way I run my company to work for some GC. I doubt many GC's would deal with me that way, and that's exactly why they're not my customers.

What I don't understand is why anyone assumes it's cool when you're working for a GC to just do the job on your own dime. Why is that? Because he's a big "GC"??? I hear more stories of people screwed by unscrupulous GC's than homeowners.

I know twelve people will be in to say "that's the way it is".....and I say "only if you want to work for someone else do they determine your pay structure"......

My advice would be to focus on work that will pay something up front so you're not footing the bill for materials. I do this every single day and have TONS of happy customers to show for it. Don't over extend yourself when you're so new.

Word to Big Bird

Your perspective here is insanely right on with how I feel, may I call you 'daddy'?

**Teetorbilt** · 10-12-2006, 06:04 PM

I have the feeling that you have already made a few crucial mistakes just by the nature of 'the contract'.

Isn't this YOUR contract to be accepted or refused? It sounds as if the GC has written his own contract and expects you to sign it.

I'm also curious about your credit situation, not that it should be a factor in this instance. Here, you have to have good credit to get a license for anything.

A quick lesson from the Teetorbilt School of Hard Knocks: Never invest materials in a project that is not yours.

KellyPainting · 10-12-2006, 06:19 PM

I started the same way.... I got credit at a Ben Moore store this way though... just walked in... had a meeting with the manager.... handed him $1000 up front.. and said... now I'll trust you first.... from then I've run a balance of $600 or so since.... he never even had me do a credit form or nothing.... now I got a few hardware stores also.... I still don't have that much backup moneywise... but always get material or 1/2 money up front
or I don't work for them.... stick it out ...listen to the people here and you'll do fine... where are you located?...maybe one of us can help you out with a word to our store.

MattCoops · 10-12-2006, 09:18 PM

I don't care how bad you need the job,
if you don't get a down payment to cover for the materials, DON'T START the job
that's how a contracting business fails

it's a business, so run it like one

go to the paint store and get all your prices on EVERYTHING you plan to "sell" to the homeowner
Add your 10% to each product.
compile a materials list and tape it to your estimate clipboard
I use this as a reference so I don't forget to charge for anything

As for getting jobs,
Door hangers / flyers are great, when you use these, when on a job or estimate, make it a point to put out 100 or more around area you are at
You'll find you'll be coming to job early or staying late doing estimates for neighbors
Come up with a refferal program. Refferals are best source of leads, and they are FREE! I offered homeowners $50 cash for every signed contract I got through them. They become your salesmen.
And you just factor that in to your estimate, so it pays for itself.

Every time you go to store, make it a point to get your business card out to someone. If you see somone checking out color swatches, give a suggestion, and whip out your card, tell them if they have any questions or need a hand to give you a call, you do this for a living.
Business cards are essential. Always have them on you.

I even leave business cards next to my tip at restaraunts and bars.
The person you give it to may just hand it off to someone else that needs it.

If you really NEED business, get out there and get it.

In my opinion so long as their are people living in houses, there is work to be done. You just got to find it.

I do not suggest under-bidding
all it will do will kill your morale, you'll be regreting it whole time your at work. It just plain kills business. You'll end up losing time and money.

Brushslingers · 10-12-2006, 09:27 PM

Hey guys, dude was asking how to get the paint to start a NEW construction bid job, not repaints...... GC's will not pay up front for materials... this is well known. Dig down deep for the times you were flat out broke and needed cash, what did you do? THAT, was his question.

mahlere · 10-12-2006, 10:25 PM

Quote:

Originally Posted by MattCoops

Come up with a refferal program. Refferals are best source of leads, and they are FREE! I offered homeowners $50 cash for every signed contract I got through them.

Matt, please reread this sentence and clarify. Did you mean that referrals have no upfront cost? or that the $50 didn't really count for the free referral?

Where is Mike Finley on this one? Oh,yeah, he's still on the phone with India spelling his company name to D&B

MAC2PAINTING · 10-12-2006, 10:27 PM

well most of you pose great points and great ideas that will help should i tell him no deposit no paint? or would this ruin it all? we have only a few days to do this we were told that we would recieve the first payment at the end of the first building <in the first month>? not so good credit and i might be able to pull some credit at my sherwin williams. let me know.

lost in the fine details.

mahlere · 10-12-2006, 10:30 PM

mac, it's a recipe for disaster. stick to smaller jobs for homeowners and build up capital before trying to take on a project like this. Or say "what the heck" risk it all and pray. Seems like you already made your mind up. But this situation is played out hundreds of times a day across the country, and the GC never loses.

**ProWallGuy** · 10-12-2006, 10:38 PM

Ask the GC if he bought the materials to build the place out of his own pocket.

Yeah, I thought so. Tell him you won't buy his paint either.

Never, ever, finance someone else's job. Are you a bank too?

**Teetorbilt** · 10-12-2006, 11:17 PM

Brush, I'm not a painter (per se) but assumed that everything was equal across the board. Painters will work for a kiss and a promise? I'll have to remember that.

paint slinger · 10-12-2006, 11:45 PM

PWG your so on target.......

Zatol · 10-13-2006, 05:55 AM

MAC,

I suggest that both of you submit your quote in person. Tell the GC what is going on and that you will need for him to supply the paint, at least until you guys build some working capital. I am a builder and I have provided a painter with a deposit before. Its really not a big deal to me. I also will provide weekly draws to some of my subs who ask. I keep a check book in my truck and I will pay my subs on the job site the minute that they are finished if they will present me a bill.

I understand how difficult it can be for some and am willing to help.