Most contractors don't go out of business because they lose money — they go out because they run out of cash. Profitable jobs with bad payment terms can drain your account faster than unprofitable jobs with good terms. Cash flow is the survival metric.
10-30% upfront is industry standard for residential. The deposit pays for materials and locks in customer commitment. Check your state's deposit cap (California is the strictest at 10% or style="max-width:780px;margin:0 auto;padding:48px 24px;font-family:system-ui,-apple-system,sans-serif;line-height:1.55;color:#0f172a",000).
On multi-week jobs, structure draws so you're always paid for work just completed, not work you're about to do. Bad schedule: 'pay at midpoint, balance at end.' Good schedule: 'deposit, then weekly progress draws based on % complete, then final at substantial completion.'
Accept cards (Stripe / FieldKrew makes this one click). The 2.9% fee is cheaper than waiting 30 days for a check. Send invoices the same day work completes, not Sunday night.
A $25-50K business line of credit from your bank, opened when you don't need it, is cheap insurance against a slow-paying customer or surprise expense. Trying to open one when you actually need it is much harder.
From the day you order materials to the day the customer's payment clears — that's your cash cycle. Aim to shorten it. Every week you can trim is direct cash flow improvement.
10-30% is standard, but state caps apply (CA: 10% or style="max-width:780px;margin:0 auto;padding:48px 24px;font-family:system-ui,-apple-system,sans-serif;line-height:1.55;color:#0f172a"K, whichever is less; many other states have higher caps or none).