Saturday, Mar 23, 2019 at 12:01
Annelies - You enter into risk anytime you engage in a major transaction with any business.
You may get advice that the company is in business, and even speak to the manager/owner, and even give them your job that you needed done.
However, there is no way you can know if the business is solvent, or if it is teetering on the edge of bankruptcy, or if it will go into liquidation while your job is being done.
Be wary of businesses that have a poor credit rating (you can acquire business credit ratings from a number of companies), businesses that have a record of not paying suppliers, or are very slow payers.
Be wary of businesses that have a record of disputes in Small Claims Tribunals, media reports of customer "difficulties", and a list of lawsuits .
You can study up on any company lawsuits on the AUSTLii site.
The judges case summaries in lawsuits give a very good idea of the reliability and honesty of the people involved.
Finally, object to demands for large payments up front, and never pay the full amount up front.
A business should have adequate working capital to carry out your job without demands for large payments up front.
Be especially wary of businesses demanding full payment in cash, up front.
As a rough guide, a payment of around 10% to 20% up front should be a maximum payment required - unless there is a large quantity of specific or specialised materials/parts required for your job - in which case, a larger payment may be requested.
Always make payments with credit cards, this ensures you have recourse as regards getting your money back, if the company goes into liquidation, and fails to complete your job.
Finally,
check Product Review, WordofMouth.com.au, and Google reviews on the business - and ask for testimonials from satisfied customers, before entering into any agreement with any business, that involves a lot of work and serious amounts of money.
The size of a business is no guarantee of their ability to continue in business, large companies go into liquidation very swiftly, on a regular basis.
Regards, Ron.
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