getting paid for custom work
#11
  
I've recently taken the plunge from hobby to professional and just landed my first job. I'll be building and installing an entertainment center and some bedroom furniture for this person's latest Air BnB property. I've already requested a deposit for the price of the lumber plus my time to go pick it up. I feel like I should ask for another payment for my shop labor before I deliver and install stuff, and then a final payment for installation time and any last expenses. 

I'm sure getting paid looks different for different customers but since this is my first official client, I don't have a relationship or any history with them. I'm sure a repeat customer whom you've already gained trust with can pay on a different schedule than a brand new client, right? I want to be fair and protect myself, but I don't want to be a pain for the client. What does everyone think? 

One more thing, If you have a form for submitting receipts for payment, please share. This is a multi-part job and I want to be on top of the paperwork from the get-go.
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#12
  Re: getting paid for custom work by mr_skittle (I've recently taken ...)
(10-22-2021, 02:41 PM)mr_skittle Wrote: I've recently taken the plunge from hobby to professional and just landed my first job. I'll be building and installing an entertainment center and some bedroom furniture for this person's latest Air BnB property. I've already requested a deposit for the price of the lumber plus my time to go pick it up. I feel like I should ask for another payment for my shop labor before I deliver and install stuff, and then a final payment for installation time and any last expenses. 

I'm sure getting paid looks different for different customers but since this is my first official client, I don't have a relationship or any history with them. I'm sure a repeat customer whom you've already gained trust with can pay on a different schedule than a brand new client, right? I want to be fair and protect myself, but I don't want to be a pain for the client. What does everyone think? 

One more thing, If you have a form for submitting receipts for payment, please share. This is a multi-part job and I want to be on top of the paperwork from the get-go.

Lawyer here.  You should have a contract that specs the job appropriately, and a change order process in case the client requests additional work.  It was wise to get the initial deposit, but the contract should also require a significant payment past that, enough with the deposit to be 40% or so of the total, then at time of installation scheduling, but before actual on site work, an additional 30% before you install, with the balance to be paid when the work is done.  People play with these percentages, but this is one way. If you don't have a contract already, get one signed at the time of the initial materials deposit.  As far as repeat customers, once you have done work under such a contract, that's what they will expect for every job, so always protect yourself. Also, I don't know what state you are in, but if for some reason you don't get paid, after installation, there are mechanics lien statutes where you can put a lien on the property to secure your payables; just something to keep in mind.  Back when I did contracts and commercial collections for a living (I don't anymore, work for a corporation now) we always told clients "I'm sure you'd rather not do work and not get paid for it, than actually do work and not get paid for it." 

But, there's many ways to skin this cat; bottom line is you want to get paid for the work, and hopefully not lose money on the deal.
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#13
  Re: getting paid for custom work by mr_skittle (I've recently taken ...)
A friend told me a out his brother getting stuck for custom work until he started getting 50%
Gary

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#14
  Re: getting paid for custom work by mr_skittle (I've recently taken ...)
I have done custom work and home remodeling for years now, and I have always collected 50% to schedule the work. Clients often feel a little more urgency to give me a deposit when they hear that. When the work is done, I collect the remaining 50%. I’ve had almost no pushback from anyone. It’s a red flag to me if they resist, and I move on to better clients.

For estimating and invoicing, you can use an app called Joist. It’s simple and presentable. I also use it to take CC payments.
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#15
  Re: getting paid for custom work by mr_skittle (I've recently taken ...)
To add to what Admiral said (in my state) I learned that if the contract doesn't specify they owe you collection cost and interest on unpaid balance you can't collect it.

Hopefully you will never need it but I did have to take a few people to small claims court to collect. Not woodworking though.
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#16
  Re: getting paid for custom work by mr_skittle (I've recently taken ...)
Thanks for the input so far.

Most people I've talked to say to get 50% down but when there is installation work, that's pretty hard to determine. When it comes to a straight piece of furniture that 50% down seems a lot easier to land on. Here's my train of thought on the topic. Treat this particular project like two separate ones. The building of the furniture and then the delivery and install. That way I don't have to roll the installation price into the initial 50% down. Because, frankly, I'm not experienced enough yet to give very good estimates for install time. It will end up being 3 separate payments but I don't see any harm in that. The initial deposit should be half the price of the finished furniture, the second payment will happen when I'm done with furniture but before installation, and then a final payment to cover installation and any misc expenses that came up.

I think my deposit amount this time around was closer to 35-40% but that's not the end of the world. I didn't specify that it was a 50% down payment. I only referred to it as a materials deposit so I'm not locked into a final price. The work is for a younger couple that operates a number of Air BnB properties. They seem like really nice folks and already paid me a deposit without any request for paperwork outside of the estimate. Considering that, I think I can be fairly straightforward with my beginner status when it comes to pricing, etc. As long as my work is top-notch, I don't imagine them giving me a hard time because a price or time estimate is off the mark.

I did look into the Joist app but I'm not sure I want to spend the money considering how little I'm likely to use it. I'll keep it on the list but am going to keep looking for similar stuff.
How do you know you're learning anything if you don't screw up once in awhile?

My blog: http://birdsandboards.blogspot.com/
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#17
  Re: RE: getting paid for custom work by mr_skittle (Thanks for the input...)
(10-24-2021, 09:35 AM)mr_skittle Wrote: Thanks for the input so far.

Most people I've talked to say to get 50% down but when there is installation work, that's pretty hard to determine. When it comes to a straight piece of furniture that 50% down seems a lot easier to land on. Here's my train of thought on the topic. Treat this particular project like two separate ones. The building of the furniture and then the delivery and install. That way I don't have to roll the installation price into the initial 50% down. Because, frankly, I'm not experienced enough yet to give very good estimates for install time. It will end up being 3 separate payments but I don't see any harm in that. The initial deposit should be half the price of the finished furniture, the second payment will happen when I'm done with furniture but before installation, and then a final payment to cover installation and any misc expenses that came up.

I think my deposit amount this time around was closer to 35-40% but that's not the end of the world. I didn't specify that it was a 50% down payment. I only referred to it as a materials deposit so I'm not locked into a final price. The work is for a younger couple that operates a number of Air BnB properties. They seem like really nice folks and already paid me a deposit without any request for paperwork outside of the estimate. Considering that, I think I can be fairly straightforward with my beginner status when it comes to pricing, etc. As long as my work is top-notch, I don't imagine them giving me a hard time because a price or time estimate is off the mark.

I did look into the Joist app but I'm not sure I want to spend the money considering how little I'm likely to use it. I'll keep it on the list but am going to keep looking for similar stuff.

Good thoughts. I use the free version of the Joist app. You could do the install work hourly, like $40-50 per hour.
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#18
  Re: getting paid for custom work by mr_skittle (I've recently taken ...)
Typical industry transactions are 50% due at signing, 40% due before but no later than day of delivery with 10% collected at substantial completion. 

You’re thought train is on the wrong track, it’s a complete project unless you’re selling a piece(s) f.o.b. your shop.  If you don’t know what the delivery and install will cost , you’re not ready for this endeavor.   Is there overhead an profit onboard your train ? If not , you’d best get off at the next station before the derailment.
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#19
  Re: getting paid for custom work by mr_skittle (I've recently taken ...)
(10-22-2021, 02:41 PM)mr_skittle Wrote: I've recently taken the plunge from hobby to professional and just landed my first job. I'll be building and installing an entertainment center and some bedroom furniture for this person's latest Air BnB property. I've already requested a deposit for the price of the lumber plus my time to go pick it up. I feel like I should ask for another payment for my shop labor before I deliver and install stuff, and then a final payment for installation time and any last expenses. 

I'm sure getting paid looks different for different customers but since this is my first official client, I don't have a relationship or any history with them. I'm sure a repeat customer whom you've already gained trust with can pay on a different schedule than a brand new client, right? I want to be fair and protect myself, but I don't want to be a pain for the client. What does everyone think? 

One more thing, If you have a form for submitting receipts for payment, please share. This is a multi-part job and I want to be on top of the paperwork from the get-go.

Attached is a sample contract you may find useful/helpful.


.pdf   agreement example.pdf (Size: 219 KB / Downloads: 49)
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#20
  Re: getting paid for custom work by mr_skittle (I've recently taken ...)
50% down should cover your materials and enough profit to live on during the duration of the project if you're doing built-ins and freestanding furniture.  The remaining 50% goes straight into your wallet - meaning no outstanding invoices remain for materials, subcontractors, nothing.  If these %s don't work, you've probably priced the job too low or you're too slow completing the job. By 'not working' I mean you're not eating pork and beans for three weeks while you wrap up.

If it's a long and very expensive project, then 50%, 25%, and 25% on a set schedule NOT by % complete. Make sure that any boilerplate off-the-shelf contract you use does not tie draws to % complete.  You have to be able to live and some delays might be completely beyond your control, especially in today's environment. If you don't need the work to actually live on, then pretend you do. The rest of us would appreciate you not whoring up the market. Be suspicious of potential customers who don't appear to be able to afford the work they're asking for. Get your last installment payment before delivery and make sure funds clear the bank.

If you get into work that some states would classify as home improvement or general contracting then check your state's law.  In TN, for example, you can't get more than 1/3rd up front for certain kinds of work and draws DO have to tie, in essence, to % complete. Always being the cheapest bidder is easily the best strategy you can pursue if you never want your business to get off the ground in a meaningful way.

Walk away from anything booked in mid to late October to early November that "has to be completed in time for Thanksgiving" or "this is going to be a Christmas present" unless you are absolutely darn sure you can do it, that materials and hardware are abundant, and AVAILABLE FROM MORE THAN ONE SUPPLIER AT THE COST YOU USED TO FORMULATE YOUR BID. DAMHIKT. Pass on using suppliers whose prices are way lower than everybody else's. They are a disaster waiting to happen. If you do find a low price deal from a good supplier, don't pass the savings to the customer. Use the cost from higher priced suppliers to formulate your bid. This is an opportunity for you to make a little extra.
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