After starting our business at the start of the recession I carried on this tradition and often found that we were struggling with cash flow due to this practice. In 2012 we implemented our new policy. It is as follows:
*First time client 50% deposit for materials and final payment on completion of works for 5 day job or less. Otherwise progress payments
*Return client 30% deposit and final payment as mentioned above.
In some instances like high materials cost we will ask for 50% from a return client.
As a small business we have opted to pay as we go for materials and do not operate credit accounts, this gives us the opportunity to negotiate better rates from our suppliers and reduces stress when it comes time to pay the bills.
Beware of the dodgy contractor- I recently completed a project for one of our old customers. It came out that she had already paid 100% to another landscaper for works to be done and he had failed to do so. She was left out of pocket and had not gotten an invoice or receipt from this person.
A reputable business will never ask for 100% payment unless they are not confident in being paid for works to be completed. Always get an invoice and ask for a receipt.