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Penelopy 20.04.2015 06:05

paying up front for work
 
Usually if I want work done where I live, the person does it and a bill comes in the post afterwards (e.g. putting a garage door on or getting a new window). As far as I can see, it is not usual to pay until after the work has been done. Now a friend is setting up a business as a handworker and says he will charge 20% up front. Is that appropriate? Or is there a level at which it becomes appropriate such as in a job with a high material value (i.e. he needs to buy 6k of building materials). I can see for a sole trader this could be a dilemma.
Thank you.

Busby 20.04.2015 07:14

Re: paying up front for work
 
Anyone who wants work to be done need to firstly ask for a written and detailed quotation - clear up the question of whether the quote is free of charge or not - ask for references to show that similar work has been done and place the business risk firmly on the shoulders of the builder/supplier wanting the work.

TiMow 20.04.2015 07:39

Re: paying up front for work
 
Your friend is free to charge as he wants ..... whether this will put off potential customers, is another matter - as this is not the usual model, to which people are used.

However, if his work involves the pre-purchase of products required for each job, it is more understandable, as he doesn't want a cancelled job and unwanted surplus goods, on his hands.

But, to me, it comes across, as a limited cash flow issue.

Jern 20.04.2015 07:53

Re: paying up front for work
 
Quote:

Originally Posted by TiMow (Post 2377231)
However, if his work involves the pre-purchase of products required for each job, it is more understandable, as he doesn't want a cancelled job and unwanted surplus goods, on his hands.

Not sure how it works here, but trade suppliers in the UK are often happy to build a relationship where tradesmen can order supplies for a job and return unused materials later.

Papa Goose 20.04.2015 09:06

Re: paying up front for work
 
If he's just starting it's not always possible to set up accounts with building firms as they often want evidence of trading history to protect them from non-payment.

It's also possible that there may be initial cash flow issues and taking a % upfront allowing for materials purchase alleviates that. But paying by CC and having a short settlement date on a contract could ease that.

So if he's decided to go down a % upfront route it's up to him, whether folks hire him should be down to the quality of his work really.

newtoswitz 20.04.2015 09:24

Re: paying up front for work
 
My first impression is I wouldn't hire him; why would I pay for something that is not done yet? I wouldn't expect that in any country, let alone Switzerland.

If materials need to be ordered and paid up-front that would be reasonable, as long as it's clear the materials are mine (i.e. if he backs out he would need to deliver them so I could get another contractor).

A fee for late cancellation would also be reasonable, although that only seems to be for fairly clearly defined one-off items, like spring cleaning and gardening.

I understand cashflow is a challenge for sole traders, but that isn't the responsibility of the customer. For a large job, breaking it into phases with intermediate payments is also reasonable, but that's for something like building a house not handwork.

meloncollie 20.04.2015 09:42

Re: paying up front for work
 
I would not use a tradesman if he required payment upfront.

Asking for payment upfront tells me that this person has a cash-flow problem, which suggests that he is not well established, which in turn makes me question his professionalism, and thus the quality of his work, his ability to get the job done on time and to my satisfaction.

Yes, it is possible that he might be skilled, honest, hardworking, reliable - but he'll never get a chance to prove that to me due to the chain of questions above that he set in motion by asking for something that is not usual practice in the trades. I would suspect that many potential customers might feel as I do.

---

I've had enough experience of poorly run businesses here, with tradesmen whose approach to sticking to a job schedule as contracted is lackadaisical to say the least. This attitude has unfortunately become the norm for tradesmen in my part of Switzerland. The only recourse I have is that the job won't be paid for until the work is done - why on earth then would I hire someone - especially someone newly set up with no record or reputation - who wants payment upfront?

IMO, your friend is shooting himself in the foot if he is trying to establish his business this way.

poot 20.04.2015 09:49

Re: paying up front for work
 
Another one here who wouldn't hire the guy.......win the deal, do the work as agreed, then get paid.

slammer 20.04.2015 10:14

Re: paying up front for work
 
...and then have the customer bitch about the work, trying to wheedle and haggle a lower price after you as a tradesman have paid for materials and assigned staff. Any company that doesnīt do Vorkasse, at least a downpayment is looking for trouble.

Chuff 20.04.2015 10:26

Re: paying up front for work
 
Quote:

Originally Posted by meloncollie (Post 2377284)
I would not use a tradesman if he required payment upfront.

Asking for payment upfront tells me that this person has a cash-flow problem, which suggests that he is not well established, which in turn makes me question his professionalism, and thus the quality of his work, his ability to get the job done on time and to my satisfaction.

Yes, it is possible that he might be skilled, honest, hardworking, reliable - but he'll never get a chance to prove that to me due to the chain of questions above that he set in motion by asking for something that is not usual practice in the trades. I would suspect that many potential customers might feel as I do.

---

I've had enough experience of poorly run businesses here, with tradesmen whose approach to sticking to a job schedule as contracted is lackadaisical to say the least. This attitude has unfortunately become the norm for tradesmen in my part of Switzerland. The only recourse I have is that the job won't be paid for until the work is done - why on earth then would I hire someone - especially someone newly set up with no record or reputation - who wants payment upfront?

IMO, your friend is shooting himself in the foot if he is trying to establish his business this way.

Ditto.

Quote:

Originally Posted by slammer (Post 2377302)
...and then have the customer bitch about the work, trying to wheedle and haggle a lower price after you as a tradesman have paid for materials and assigned staff. Any company that doesnīt do Vorkasse, at least a downpayment is looking for trouble.

As far as I'm aware an agreed price in writing is an agreed price that has to be paid upon completion of the work... and if someone agrees to it before the work starts then they can't "haggle" later without getting in trouble when the builder then issues a Betreibung, along with proof of the agreed price.

It's not normal to do Vorkasse or downpayments, and I would never use someone who wanted that unless they had a cast-iron reputation... in which case they probably wouldn't be asking for a downpayment.

bigblue2 20.04.2015 10:27

Re: paying up front for work
 
another no go here, we've had tradesmen ask for cash upfront, sorry, no go, get materials delivered to my house, turn up, do some work, then I'll pay. Way too many cowboys in the building trade (here and everywhere else) to pay a total stranger money upfront.

slammer 20.04.2015 10:54

Re: paying up front for work
 
Sorry wonīt work for me, did the work to the agreed price, bought materials spent a week installing CAT-5īs (long time ago) and the patchpanels, after a month of being brushed off, I go around with a baseball bat and the doors are closed, customer insolvent. Another time, re-alligned a laser imager and did the inspection, customer sold the device and I got a letter from some stupid Amt telling me that my customer is hopelessly in debt and that I must reduce my price, I ended up with a loss of 11.000 Marks, did the maintenance on a office printer, customer would not pay because I did not adapt the unit to use cheap third party cartridges (manufacturer policy) repaired a scanner at Siemens, didnīt pay, the list is endless.
Normally you would ask for 30/60/10, 30% Vorkasse, 60% at start and 10% by customer sign off. Everything else is risky at best.

fatmanfilms 20.04.2015 10:59

Re: paying up front for work
 
Quote:

Originally Posted by slammer (Post 2377328)
Sorry wonīt work for me, did the work to the agreed price, bought materials spent a week installing CAT-5īs (long time ago) and the patchpanels, after a month of being brushed off, I go around with a baseball bat and the doors are closed, customer insolvent. Another time, re-alligned a laser imager and did the inspection, customer sold the device and I got a letter from some stupid Amt telling me that my customer is hopelessly in debt and that I must reduce my price, I ended up with a loss of 11.000 Marks, did the maintenance on a office printer, customer would not pay because I did not adapt the unit to use cheap third party cartridges (manufacturer policy) repaired a scanner at Siemens, didnīt pay, the list is endless.

I had the same nonsense more than once in CH, of course most of the people arguing here get a salary paid in full about the 27th month & have never been self employed.

Belgianmum 20.04.2015 11:02

Re: paying up front for work
 
I agree with the others. I wouldn't pay upfront either but can appreciate how difficult it must be initially to set yourself up in business and bear all the upfront costs until the job is complete and the customer can be billed. Unfortunately there are just too many unscrupulous characters around these days who spoil things for the trustworthy ones and paying before any work is done is too big a risk.

bigblue2 20.04.2015 11:02

Re: paying up front for work
 
and as a company you can insure yourself against non paying customers, but the op isn't talking about company to company transactions, they are asking about company to public transactions, a home owner won't have the ability to suddenly pick up sticks and leave.

Guest 20.04.2015 11:10

Re: paying up front for work
 
We paid a partial amount a few weeks ago to a gardener which was fine. We have the overall estimate, he has started the job & it's coming along nicely. He said they don't get much income over the winter which is understandable for that line of work where it's not possible to do much in the frost, cold or snow. Would never pay in full in advance.

meloncollie 20.04.2015 11:14

Re: paying up front for work
 
A thought on building a customer base:

While shopping at Hornbach this weekend I saw a notice about their Handwerker-Service. Hornbach acts as a middleman, connecting customers and tradesmen. The materials are bought at Hornbach, I assume by the customer, then one contracts with the Hornbach-partner Handwerker to do the installation. If I have understood correctly, the tradesmen are independent contractors.

If there is a Hornbach (or similar) in your area, something like this might be a way for your friend to get started with less capital outlay on his part.

slammer 20.04.2015 11:49

Re: paying up front for work
 
Quote:

Originally Posted by bigblue2 (Post 2377335)
and as a company you can insure yourself against non paying customers, but the op isn't talking about company to company transactions, they are asking about company to public transactions, a home owner won't have the ability to suddenly pick up sticks and leave.

Of course not, however private customers can simply refuse to pay and by the time you have gone through the Betreibungsverfahren you gonna be gnawing your own gristle, then, try to get your money when the person is in Ausland, and how many times have private persons had a guy come round to "fix" whatever because they need whatever, knowing damn well that they donīt have the money to pay and would rather duke it out until you are worn out, broke and out of business and they donīt need to pay anymore.
It really works both ways.

Chuff 20.04.2015 11:56

Re: paying up front for work
 
Quote:

Originally Posted by slammer (Post 2377369)
Of course not, however private customers can simply refuse to pay and by the time you have gone through the Betreibungsverfahren you gonna be gnawing your own gristle, then, try to get your money when the person is in Ausland, and how many times have private persons had a guy come round to "fix" whatever because they need whatever, knowing damn well that they donīt have the money to pay and would rather duke it out until you are worn out, broke and out of business.
It really works both ways.

I think it's also possible that you also have some of the worlds worst luck. Maybe you were Ghengis Khan in a previous life? :D

slammer 20.04.2015 12:39

Re: paying up front for work
 
Quote:

Originally Posted by Chuff (Post 2377374)
I think it's also possible that you also have some of the worlds worst luck. Maybe you were Ghengis Khan in a previous life? :D

I ask myself sometimes:confused:


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