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Timing of a contract and a deposit8/21/15
My questions to you shop owners and managers out there is, at what point are you requiring a retainer/deposit? Is it before any drawings are made or after some general drawings are made? I am thinking of doing some drawings before requiring a deposit but charging a design fee that would be deducted from the price of the job if they move forward with us. I want to keep the window shoppers away yet not discourage a potential sale due to someone not feeling comfortable putting money down without being able to visualize the project. I am interested in any thoughts or models that you are currently using. Thanks
We make the initial meeting to get info on design and style. We then draw up the rooms and call the clients. We will give them the pricing and the 3d drawings, but not the dimensional drawings. We generally will make 1 revision before asking for a signed contract. We take a deposit either then or at time of build.
Our deposit structure is 50% prior to production, 40% prior to installation. 10% when the project is completely finished. Larger projects are negotiable as the joinery generally goes out in stages rather than one shot.
If the client wants to see drawings before paying a deposit I offer a $1000 design fee that is deducted from the total if they proceed, 99% of the time they proceed. Just make it clear that the design fee is non refundable if they don't proceed but the drawings are theres to take to other cabinet makers ready to produce from. Be very clear and formal about revisions, have two rounds built into the design fee. Clients tend to ring you up and tell you one thing. Then a day later an email with another "thought" ect. You need all the info and a marked up drawing returned to you so you can formally respond to it prefereably with a revised drawing and a short document that outlines the changes you made and any costs associated with the changes.
Those drawings are of great value to you and the client, it's bad enough we quote for free because the quote itself is a design process. If a client emails you a plan and says this is what I want, how much? that's fine....thats great!! but you go to the house and are asked many questions about the knowledge you have built up over the years. You input greatly into the functionality of the kitchen all with a great risk of not seeing any payment.
I offer a 5 minute hand sketch to confirm the design layout we discussed, anything CAD based we need to see some money (and more importantly) commitment first.
Thank you Mike and chipbored for your responses. I think chipboreds model fits my situation and what I am wanting to do. Do you ever get any flack for wanting 90% of your money before the client has a cabinet in there space?
If you want to order cabinets at the local big box or most other kitchen stores, you will pay 100% of the costs with your order. Then you'll wait for somewhere between 2-6 weeks before you get your order.
Installation and cabinet fabrication are two different items, in my opinion. You could separate them into two contracts, if you wish. I'd recommend you follow the advice above and collect the lion's share, if not all of the cost of the cabinetry and accessories well before you begin installation.
Just follow best practices, and your chance of getting burned go down significantly.