Payment Breakdown for Custom Construction

Discussion in 'Boat Design' started by makobuilders, Jul 24, 2017.

  1. makobuilders
    Joined: Feb 2009
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    Location: Atlanta, USA

    makobuilders Member

    What are typical and reasonable payment breakdowns for a new design/construction? It looks like we are agreeing on the following, but haven't a percentage breakdown yet:
    1. Begin design works
    2. Begin construction works
    3. Hull welding complete
    4. Engine installation complete
    5. Delivery and successful sea trials
     
  2. gonzo
    Joined: Aug 2002
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    Location: Milwaukee, WI

    gonzo Senior Member

    There are other important stages:
    Electrical wiring
    Hydraulic systems
    Plumbing and tankage
    Interior cabinetry
    Electronics and appliances
    Painting
    ***Very important*** Any additions, changes and other things that may have added time and materials to the job.
     
  3. PAR
    Joined: Nov 2003
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    Location: Eustis, FL

    PAR Yacht Designer/Builder

    Generally I price things at the natural "plateaus" of the build. If you include design work, there would be an initial payment, typically 1/4 - 1/3 of the value of the plans, then additional payments after hydros and a the GA have been accepted and the last on plans completion. On a full project, you might want to homogenize the plans costs into the first payment. So, you have the the first payment for the plans, next would be after station molds or frames had been erected, next at the roll over or exterior paint, next I'd expect a payment for the fit out, which is usually the longest period, so considering dividing this into two separate "pulls". Lastly would be completion or delivery. Sea trials are a separate matter, if it's someone else's design, but I don't charge for this on my own, generally knowing how it'll do, particularly after just building it. Lastly, and to Gonzo's point, "charge backs" can eat up a lot of time and materials, so keep track and bill it.
     
  4. rxcomposite
    Joined: Jan 2005
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    Location: Philippines

    rxcomposite Senior Member

    Usually,Design and Engineering is a separate division but if you are doing it, it will be from 20-25% of the total cost of the project. It is money up front or it can be split into two with the last payment upon completion and approval of design.

    If design is not yours, 30-50% down is required as this is where the bulk of the material is going to be purchased. The rest is progress billing depending on the schedule and duration of the project. Just make sure you are fully covered for all labor and materials plus so you don't lose money in any event the project is delayed or stopped. Engine installation (if powerboat) is a major cost so make sure you are covered in the cash outlay.

    Usually, 100% full payment is effected after a successful sea trial and handover of the boat BUT the client may bargain for 10% retention to cover warranties of machinery and equipment or a certain period of time after handover. Your call.
     

  5. Squidly-Diddly
    Joined: Sep 2007
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    Location: SF bay

    Squidly-Diddly Senior Member

    Electrical through Painting happens between stage 4 and 5.

    "additions, changes"

    The basic cost breakdown by stages is- the first 90% of the job takes the first 90% of the budget, and the last 10% of the job takes 2nd 90% of the budget.
     
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