Credit Line

My customer ( what few I have anymore) ask me how much up front? It is nothing to be ashamed of and why would you feel guilty or superior not asking? Do your job, do it well , make money. That is what this is all about. B) :) :) B) Deep Down In Florida Where The Sun Shines Damn Near Every Day

Great advice from everyone.

This only happened once, the 50% on completion wasn't being paid.

Bossman called the customer and said "if I can put it on, I can take it back off". Needless to say we got paid. PC

If you are a small co. then start by asking for materials down. I agree with Tom) Create a cash account with your supplier, have the customer write a check to to your supplier (include mark-up)

When you order the materials, your mark-up dollars stays and builds up the account. A small price to pay for the short term.

If you intend to stay small, then over time, you will not have to ask for down payment. You can simply run your business on a cash basis.

If you intend to get bigger, your supplier will see your inventory coming through and offer you an account before you take your business somewhere else.

Lanny, I agree that is doesn't seem to be that much of a risk, but I still like to get a downpayment. It ensures that they are going to wait for you to do the job, and it also solidifies the contract. IMHO

---Get an account at the dump. Then use that as a reference. ---Try more than one supplier. Once you get in you can reference them to all the others. ---Get a business Visa at your business bank. I used to have one with no limit. But even a 10k limit will work for residential. Be sure to pay off the balance every month. A buddy of mine runs all his $$$ on his Visa and racks up tons of airline miles. ---I have never taken money down. I understand the arguments. Most of my jobs are $5-8,000. I do not consider that much of a risk. When people hear that I take no money until they are satisfied with their roof they seem to like that. Lanny

Tom I knew it. This is how you all start. My boss did the same thing , driving around town looking for bad roofs. He developed himself, very successfully. I love it. Coudos to all of you. It takes conviction and hard work, that's why I love you all. :kiss: PC

Patty,

I started with zero....A lot of us have....One has to work within his/her means....I ran across an old,antique of a kettle....Had an external pump you had to heat-up with a torch....I located the owner and ended up roofing a rental property for him in exchange for the kettle....I was off & running....I had to buy my first new truck cash, as I couldn't get a loan....I'll never forget it; 1984 Ford Ranger 4x4, $9,400.....Took me till 1988,(I think), to land my first bonded job, (never forget that one either; A city project for $558,000). It's not rocket science, however, does take focus & a can-do attitude....

For years I used to have themn pay me when the job was done. That is 100 % trust in the homjeowner. If I had them pay ame up front, tha tis 100% trust for them in me. I believe 50% is a good average. Trust in both directions. Tom, if your margins were 40% I could understand 800K to 1 mil in receivables. Other than that , I would say that is crazy! Just a thought.

Tom I'm going to question this. How is he going to gather the $$. He is starting a trade , which is not easy, this economy sucks. There is an old saying " the proof is in the pudding" a start is a start. I appreciate the effort, someone has to replace you old guys. Don't get me wrong , I have such an appreciation of the trade. This a young man starting out, I'm sure you didn't have the $$ in the pocket, you know now but you made it. No reason he can't. You guys kill me, but I love ya. PC

R. If you don't have the $ to operate, you'll might ask HO's for "material deposits"....Your supplier may agree to open a "cash account" for you....I would suggest only asking for the cost of materials....Tell HO's they can pay you, or make payment directly to the supplier....This will build a repore w/supplier that will hopefully lead to a line of credit somewhere down the line.

I began business in 1983, and never, ever asked for any type of deposit up front. Only due to neccessity, aprx. 3 yrs ago, did I start asking for material deposits on residential re-roofs, and I'll tell you, to this day, I hate doing it....Asking for deposits/downpayments simply reflects mistrust &/or poor financial status.

If you plan to grow to any size at all, credit is essential....I recall in the mid-90's; Our accounts receivable consistantly hovered around $800K - $1mil....Unless you have $1mil bucks to utilize, your going to need a line of credit.

my 2cents....

Thank You Guys. Ciak & OS I said something right for a change.

Honestly R,Sales good advice. The company I worked with, I ran it by myself (yes I have to give myself credit)it took us several years to get into commercial. You need the bank account behind you. Residential won't go away, always there. We got hooked up with Carlisle Syntec, wasn't easy, but once your in your in. They offer classes for roofing & estimating, been there done that. Good Luck PC

I too started when I was just a kid. I too used to finish the joba nd then get the money. Not any more...at least for the last 20 years and I am going to be 59 in less than a week. We get 1/2 down and the rest when we finish. It just makes sense as CIAK says and Patty too. You are not a bank! A caveat; put the downpayment money into a seperate account and don't TOUCH it until you are working on the job. You can write a check for the materials as you buy them that way and you will really impress the supply houses. A few months of that and they will be offering you credit, but if you do your job well, you won't need it.

I'm with Patty on this one. Nothing wrong with asking for money up front. The customer is asking you for money up front if you don't get it. Just good business sense. 50% should be plenty. Establish your customer relationship and vendors. Just smart to ask. Not to ask??? Well, if stupidity could be cured...... lets not go there yet. B) :) :) B) Deep Down In Florida Where The Sun Shines Damn Near Every Day

I don't do this anymore. If you are just starting out you are doing residential. What I'm familiar with 50% up front 50% on completion. Don't be afraid to ask for that. This way you are covering materials and setting up an establishment with suppliers. They need to get to know you. They are in a pinch like you. This needs to be done if you want to grow into commercial.

Woody : roofing survivor, I like that, isn't that the truth. PC

The simplest way to getting a credit line is to already have one. See if you can get one established with a small sheet metal shop for flashings. Someplace where there isn't a credit dept. After paying on time for several months, use them as a reference when applying at larger companies.