What down payment percentage does Mike Andes say he tries to collect?

Mike AndesFounder, Augusta Lawn Care and Homeworks · Founder of Homeworks and Augusta Lawn Care

Get Paid FIRST... Then Do the Work (Here's Why) #landscaping #homeservice #smallbusiness

7 Aug 2024 · 1 min

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0:46

Short advice video by Mike Andes explaining why service businesses (landscaping/homeservices) should collect deposits before starting work. He recommends collecting at least a 50% down payment (ideally 50–60% or more) so the initial payment covers cost of goods sold (materials and labor) and prevents the contractor from fronting those costs for weeks or months while waiting for final payment.

Questions this video answers

At least 50% (often 50–60% if possible)

Chapters

This is why collecting deposits on projects is so important before the job even takes place. I try to collect at least 50% down payment on a job. That way when I have the materials and all the labor associated with the job these cost money and so if you don't have a deposit what ends up happening is you pay out all this money and then you hope and pray they actually pay you and this is 30 days later. That means that you're going to be floating all the cost of materials and labor before you even see any money. That's assuming that they pay. If this is a three month job you could be floating this money for three or four months before you even get paid. This is what's called cost of goods sold. Your labor as well as all of your materials. I want to get those cogs covered by my initial down payment, 50, 60% as much as possible. I want to get paid before the job even starts.