Deposit or Not --- That is the Question

Is a deposit requirement a good thing for a pool project?We've all heard the stories - 80% up front and then the contractor is gone for a long time or for good. We've also had the experience of a customer changing his/her mind after the sale and having a deposit might make them think twice about cancelling -- especially if there is a cancellation penalty.We've done fairly large deposits and also fairly small. In late 2007 we at Mermaid Pools of Central Florida went to a 'no deposit' requirement. Now exactly how we do this is important -- clearly we don't want to get too far into the project without payment with the emphasis on physical improvements to the property. Obviously, ripping stuff out of the ground is not a good option.So what we do is don't require a payment until the first 'big event' be it a fiberglass shell delivery or the steel work on a concrete pool. We do this so that we are not upside down.So why do it? We do it to build confidence in the customer that we aren't using their money to build someone else's pool. We are able to get them to feel better about us. Additionally, we do it because we are able to advertise it or to gain publicity in the local paper www.orlandosentinel.com/community/news/apopka/orl-dawson1908jan19,0,131394.column. Customers are fearful or cautious and this is one thing we do to get them over the top. We're not the only swimming pool contractor in Central Florida (Orlando) doing this either. Times might be changing.We've never had a problem with getting this first payment.
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Comments

  • After I sell the job, get a signed contract, do all the leg work including paperwork for the permitt process, then I take a $500 to $1000 non refundable deposit. No additional cancelation charge if they change their mind after permits are approved. Then I file the permits. After approval of permitts, it reverts to the pre arranged / agreed on payment schedule. So far, we have had no resistance doing t this way for a large reno or new pool
  • Colin,
    Thanks for the comments. Your method on the first payment is EXACTLY what we use for the final payment.
    Mark
  • I agree with this. The only thing I do different is I take the last 3 figures of the contract price and use that as the deposit, but I never make it over $ 500. If a contract comes out to be $52,275 the deposit would be $ 275 if the contract is $52,865 I would make the deposit $ 365. It has worke for me.
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