Getting Paid Upfront: Deposit Policies for Handymen

There's an excellent way to tell if a customer is going to respect you and pay you according to the contract they just signed: Ask them to pay a deposit.

There are a few rules to follow with asking for deposits, and there are times when they are not appropriate. The general rule is that if a job is going to take more than one day to complete, you should ask for a deposit. The general rule for how much the deposit should be is enough to cover your cost of materials.

Here are the exceptions to those two rules, and some clarifications:
Times when it is not usually necessary to ask for a deposit:

- If a job is going to take less than one day to complete.
- If you are working on a government contract.
- If you are doing a job for a long-term repeat customer who sends you a lot of work, like a real estate broker or a property manager.



You should ask for a larger deposit -- one that is greater than the cost of materials -- if you are doing a very large job. Asking for half up front is appropriate in this case.

Some customers and almost all general contractors will not agree to an upfront deposit. If they are customers, they may not trust you, and if they distrust you that much, their refusal to pay the deposit may be a very good indicator that they are not the kind of customers who want anyway. Offer to have the deposit money put in escrow, or offer to have the customer come with you when you buy the materials and have them pay for the materials at that time. However, sometimes even that is not acceptable to a customer. Hold no grudge, but move on.

General contractors may not want to pay the deposit because they do not yet have the money for the job, and given the state of getting credit for small businesses, especially contractors, their not having the money to pay you may also be a good indicator that this is not a good job for you to take.







More articles about starting a handyman business:

How to Start a Handyman Business

Handyman Business Cards

Handyman Clients: How to Find the Best Ones

Are You Cut Out to Be a Handyman?

Tools for a Handyman Business

Payment Options for Handymen

How To Advertise a Handyman Business

Customer Service Tips for Handymen

Choosing a Name for a Handyman Business

Record Keeping Basics for Handymen

Being a Handyman Versus Having a Handyman Business or a Franchise

Getting a Website for Your Handyman Business

Getting Paid Upfront: Deposit Policies for Handymen

How Much To Charge Per Hour

Should You Charge by the Hour, or by the Job?

Insurance for Handymen

Handyman Business Book Reviews

The Handyman Guide: How to Fix and Build 1000s of Things Around the House


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