Should my business charge an upfront deposit?
Hi, my husband & I own a small business w/ 5 employees (including ourselves). We've significantly grown over the past couple of years, but we have less money. Our business is custom marine canvas. Our average project is in the $5000-$10,000 range, as the yachts we build custom projects for are quite elaborate. We lease space from a large corporation that sub-contracts us for a lot work, so we definitely need to be on good terms w/ them, as they are one of our biggest customers. The problem is that once we started renting space from them (remember we are our own business entity), their payments have become slower and slower and it is killing us financially. Before we leased space from them, their checks from out of state arrived within literally 5 business days of our job completion. All of our other customers pay us within 2 weeks completion (which is acceptable), most providing a 50% deposit. To date, they owe us almost $30,000 for work done in the past 6 weeks---I just received a check in the mail for $1200 covering 2 of the smallest invoices from 7 WEEKS AGO. Granted, they do pay eventually, but we know that no boat leaves this building until they're paid their money on the spot (which part of is our money!). My husband tells me not to get "nasty" with them; we might lose their business and not be able to keep our employees busy. Should I require that with every PO I receive from them a 50% deposit on the very large jobs? What if they say "no"? Any ideas/feedback/info. You can give me will be greatly appreciated. Thank you!