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Question about Contractors

Eula216·Oct 08, 2021

Posted in:Advice Compensation Startups Money

Hey all, I know its typical for many contractors to ask for payment upfront, but I’m worried that this potential contractor isn’t legit. Has anyone ever been burned by paying upfront? Do most contractors insist on this and if so how do you handle it? I’ve always had contractors who were okay with me paying them by the end of the month after the work was done, so I never had to deal with this. I was thinking to try to ask for a past client to talk to as a referral but if you have any other suggestions let me know.

BrianaBrownell·Oct 08, 2021

We often structure the payment as 50%/50% or some other breakdown (30%/30%/40%) depending on the various milestones. That way the contractor gets some payment upfront but you're not out the whole amount if they don't perform.

DianePrince·Oct 08, 2021

I always ask for, and check, 2-3 past clients as referrals. I also compare them to at least 2 other options. It's a pain, but I find having that as my policy is a good tool to help me to vet people instead of rushing into relationships. But what's making you worry that this contractor isn't legit?

Filomena21·Oct 08, 2021

In my experience, 50% upfront and 50% at the end is typical. I would strongly suggest requesting 1-2 referrals, and do a phone call with the reference(s) rather than sending an email.The contractors I regret hiring the most were the ones who refused to provide a reference, which is so SO sketchy. And then once you get the references, call everyone they give you. It's shocking the number of times I've called a reference and they straight up tell me on the phone that they are about to fire the contractor or that they had a terrible time working with them.In contrast, whenever a reference is really enthusiastic on the phone, I've always had a great experience working with the contractor.

Iynna·Oct 08, 2021

As the others said, most try to split it 50-50 is what I've seen most because it's fair for everyone or 60-40 for bigger projects. However no you should not pay the full amount only once the job is done.I'd talk to the contractor about it first and not try to ask for a past client as this may be welcome with feelings of lack of trust. If you don't trust them from the get go, I'd suggest you just move on and find someone else.

leaaluie·Oct 08, 2021

Hey! I would love chat more about how you got into contracting. I'm interested in exploring this option but I have no experience in it.

Chitraf·Oct 08, 2021

Hi Eula- I am a contractor and I usually as for a kickoff payment something like 20% so that way I know they are serious and then have a payment plan depending on how long the project is. If it is more then 2 months long, I usually invoice them and they have 30 day terms. If it is a short project then I have have them pay when certain milestones are delivered. I also insist that they call references. I usually provide 3 or more. What are you hiring the contractor for? If it is for software or design work, I would be happy to offer my services. You can contact me at [email protected]Best of luck!Chitra French

sarapprobst·Oct 11, 2021

We are currently paying contractors through 3rd party platforms that help connect us (ex: Upwork) so it is nice to not have to pay up front and have control over "approving" their work prior to the payment fully going through.