Yes, this. We are totally NUTS if we are not as brave as freakin' Home Depot when we ask people to pay for their gear!

It's part of a payment assurance strategy.

"Mr. Customer, we don't stock a lot of product. That means that we design your system with latest product and choose from the entire world instead of choosing from what's in the warehouse. This means we buy your product for you, so once it's ordered, it's yours. For that we require prepayment, including tax, for all items (in reality, all major components and a figure for parts)."

This sticks him to the deal. He's already paid for the stuff.

Another thing is that, in California, you can't collect more than 10% of the installation cost before the work is done. This approach severs the parts from the installation. The profit on the parts subsidizes the labor for a while.

Labor payments are defined as an initial amount, usually zero, with, say, 75% due upon "substantial completion." This gives the client the knowledge that there's some amount of money they can be a dick about, but limits what that is to something I can stand.

I'm sure hes been on the edge of his seat for the past 18 months waiting for that response....

I don't follow what you're saying.

Good. That's a viable business model -- just ask almost every business!


Nobody has to collect up front. Most of us do so to finance the job; to establish trust with the client (if we don't do the job, they don't get kicked out of a house, but if they don't pay, we might get kicked out of business, and yes, they trust us when we come through); to provide ongoing capitalization of the parts and labor they want; and sometimes to help survive because someone else whom we should not have trusted is late on their payments.


What does this mean? Go behind? Take the client out back and beat the money out of him?


Oh, you now owe $20K and you have not asked the client to pay it. Well, yeah, I suppose deals that don't require payment have a pretty high close rate! The problem is that trustworthy customer would be good with that deal, but a guy who's going to stiff you just racked up $20k in stiffage because you did not try to get payment from him. (Actually, I have had a hew clients who have insisted on paying when services were added, both in order to lower the end-of-contract payment amount and because they really understand that we have to pay our costs. Are ALL of your clients these good guys?)


I am sure that, up to now, this would work for all of us if we had enough money in the bank to totally lay out costs on new jobs before collecting ANY money on those new jobs.


Here's where it might put you out of business. You don't find out if they're going to stiff you until they stiff you. We had clients in central Beverly Hills who wanted the best deal; were given the best deal; we did not structure payments to leave very little on the table at the end; and they refused to simply pay what they owed. When 30% of the project cost was left to pay and they had agreed to pay what was on the table, they declared they wanted to start negotiating.

I hope before you come to this post in this saga that you've got things worked out. But you can't just trust everyone to pay everything. Sorry.

Bottom line... if you are going to disable a clients system due to non-payment, do NOT let anyone know about it. Do it discreetly / alone at the end of the day on a weekend and wait for the service call.

Let the call go to VM and deal with it on Monday morning. This way, they will have had a couple days to realize what is like to live without it.

At that point, you can discuss final payment before rolling a truck.

It is the "This client screwed me and now I am going to screw them and let them know about it" people who get into trouble.

Yeah, you're so right.......... I wonder why the hell I responded to an old thread! I think it was it referenced in a current thread and I lost my mind and commented on it. Sorry, guys. I hate it when people do that, myself included!

This is the current thread; same topic, different year:

[Link: remotecentral.com]

Oops, now I did it.