The vast majority of BV practices (79%) requires up-front retainers before beginning a project, according to BVR’s soon-to-be-released 2007 Business Valuation Firm Economics & Best Practices Survey. The standard amount is 50% (the median is 50% and the mean is 52%), as shown in the table below. The second, third, and fourth most popular alternatives are 25%, 33%, and 100%, respectively. Many business owners in more traditional fields would envy these cash flow characteristics, which alleviate the more common headaches associated with receivables:
What percent of project fees do you require as down payment? |
|
100% |
4.2% |
80-99% |
3.4% |
51-79% |
2.5% |
50% |
60.5% |
34-49% |
3.4% |
26-33% |
10.9% |
25% |
10.9% |
<25% |
4.2% |
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