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Old 20.04.2015, 07:05
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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.
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Old 20.04.2015, 08:14
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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.
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Old 20.04.2015, 08:39
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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.
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Old 20.04.2015, 08:53
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Re: paying up front for work

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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.
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Old 20.04.2015, 10:06
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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.

Last edited by Papa Goose; 20.04.2015 at 14:09.
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Old 20.04.2015, 10:24
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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.
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