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Old 11-25-2009, 08:38 AM   #1
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I've had an unusually high amount of them for this interior season. Over 50%!! I'm used to having one or two cancelations thru-out the entire year. I've never taken a down-pay from someone. I always thought that was shady, but now I'm re-thinking that. What do you guys do? Would you actually take someone to court? These are all residential jobs. Highest one was $5500.00 lowest was $750.00.
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Old 11-25-2009, 08:52 AM   #2
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I have more cancelations this year then ever before, times are tight for people, I try not to sweatit and move on. I dont take deposites but I do make them sighn a contract.
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Old 11-25-2009, 11:36 AM   #3
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Maybe you are too good (if that's even possible for anyone) at convincing people to buy from you during the initial meeting? Tone down your sales pitch so only people who really want a paint job buy? You could also start taking deposits.

Lastly, how far out are you scheduling? The further out, the greater the chance of a cancellation occurring.
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Old 11-25-2009, 12:05 PM   #4
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I always think of taking deposits is only suited to contractors that are in a position of 'power'. Seems to me we need customers more than they need us right now - so out the door is the deposit. I am thinking for the future where a signed contract does not guarantee against price increase, unless a 10-15% deposit is given at the signing. This will give customers the oppurtunity to 'lock' in at a certain price - or if they are uncomfortable with handing out a deposit - then price may fluctuate. Of course again - you have to be in a position of power to be secure that you will have the upper hand.

In the stock world and real estate world this is called an 'option' to buy. It's a good faith deposit to purchase a piece of real estate at a certain price for a limited time. Say you see a house on the market for 300k - you purchase an option to buy it at that price - and the price is good for 90 days. At which point if you haven't purchased - you are out the purchase money of the option - and the house goes on back on the market and the new value is recalculated.

Why the trades don't adapt these standard practices among most other industries is ridiculous to me. But it goes to show how high the ***** index is in the painting industry.
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Old 11-25-2009, 12:38 PM   #5
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Nope! I require a non-refundable 10% deposit. Had 1 drop out this year. But I refunded the money. I do non-refundable in case materials were bought or cancel when my guys are rolling up. This is all explained in my presentation. IMO it is more professional to require a deposit according to your state laws.
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Old 11-25-2009, 01:29 PM   #6
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Well most painters around here require a down payment, and I do most of the time. I drive home the point that we pay a bond company to keep their investment safe.Besides we are the ones with the most at stake.
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Old 11-25-2009, 03:43 PM   #7
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In my contract there is a clause that says that if they cancel, I keep a certain %. Time and money is spent with the whole process, you have to pay yourself for your time.
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Old 11-25-2009, 04:31 PM   #8
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Quote:
Originally Posted by y.painting View Post
Maybe you are too good (if that's even possible for anyone) at convincing people to buy from you during the initial meeting? Tone down your sales pitch so only people who really want a paint job buy? You could also start taking deposits.

Lastly, how far out are you scheduling? The further out, the greater the chance of a cancellation occurring.
Yeah, most of these cancellations were from people that hired me on the spot. These people hire you without thinking about it. On that note, I am hardly the salesman. I don't pressure people at all. And a couple of them were from people that hired me in the summer for the work to be done in the fall. I'm leaning towards non-refundable deposits, 10% seems fair.
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Old 11-25-2009, 05:05 PM   #9
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Here customers have the right to cancel 3 days before starting no matter what you might think your contract states. That is the law. You must pay back any deposits in full.
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Old 11-25-2009, 07:08 PM   #10
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Quote:
Originally Posted by One Coat Coverage View Post
I've had an unusually high amount of them for this interior season. Over 50%!! I'm used to having one or two cancelations thru-out the entire year. I've never taken a down-pay from someone. I always thought that was shady, but now I'm re-thinking that. What do you guys do? Would you actually take someone to court? These are all residential jobs. Highest one was $5500.00 lowest was $750.00.
I had the same thing happen to me the first year the economy went bad. I too thought taking a deposit was a bad move and still dont do it. I dont know what would hold up in court if you were ever take it there, I didnt think it would be good for business to sue a customer. It really gets to you and even more so when you see someone else doing the job a week later. I could understand if someones finances change but to give someone the job and then take it from them cause they found someone cheaper sucks. I had one old lady tell me that your health had gone south and would not be able to afford painting her house after she gave me the job, then ran into the hack she got in the paint store a week later.
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Old 11-25-2009, 08:07 PM   #11
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I actually just had a near cancellation but salvaged it by putting together a financing program gathering payment over 3 months. Due to a strike times were getting tough so a paint job wasn;t a priority so i made it one for them by offering as I could afford to finance it.
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Old 11-25-2009, 09:07 PM   #12
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Whatever works for you my friend. I know I wouldn't do that here in cali any ways. May be you can trust your neighbors where your at. But mine
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Old 11-25-2009, 09:15 PM   #13
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Originally Posted by ewingpainting.net View Post

Whatever works for you my friend. I know I wouldn't do that here in cali any ways. May be you can trust your neighbors where your at. But mine

That is exactly it. I live in a small town and this one was a referall. It will work fine for me. I am just collecting my last few checks now for work completed in the july and august months so waiting 3 months for a small basement is not out of the question at all. It will be nice to have money roll in, in Feb.
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Old 11-25-2009, 09:19 PM   #14
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Quote:
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That is exactly it. I live in a small town and this one was a referall. It will work fine for me. I am just collecting my last few checks now for work completed in the july and august months so waiting 3 months for a small basement is not out of the question at all. It will be nice to have money roll in, in Feb.
That's why we take CC's let the bank finance & we'll keep painting!!
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Old 11-25-2009, 09:23 PM   #15
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Quote:
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That's why we take CC's let the bank finance & we'll keep painting!!
Exactly. We do all kinds of creative financing (as long as we got their cc #'s)

Nice move - wje. Nice close.
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Old 11-25-2009, 09:28 PM   #16
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It's not closed until a mod closes it. So who are you to say "nice close".
.
Aaron knows his limitations. Who he can trust. So nice opening.
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Old 11-25-2009, 09:36 PM   #17
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Quote:
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It's not closed until a mod closes it. So who are you to say "nice close".
.
Aaron knows his limitations. Who he can trust. So nice opening.
Wing: What are you talkin' about? I was agreeing with Aaron and telling wje that they did a nice job of closing a deal by being flexible and creative. I don't understand your post.
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Old 11-25-2009, 10:00 PM   #18
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I'm just being a jokester. Your all good.
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Old 11-25-2009, 10:21 PM   #19
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I'm just being a jokester. Your all good.
It's cool. Couldn't read your "tone" and had no idea where you were coming from. Rock on...
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Old 11-25-2009, 10:45 PM   #20
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Back on topic. IMO, I can't see how taking money from a client who canceled (for whatever reason – it’s their freakin’ right / money) benefits a company in the long run.

We get a few cancellations but that comes with the territory. We’ve got it in our contract that x percent is due to us once the contract is signed. But, there is no way I would enforce this unless absolutely necessary (matl’s, equip, etc… up front).

Think about it… A neighbor tells another neighbor that they had to pay this painting company (fill in the name) x amount and yet they did no work. Not a reputation I would want to build.
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