View Full Version : Residentail Contracts Part II
03-02-2001, 05:16 PM
Okay so the majority of you guys/girls don't have written contracts for residential properties. Do you have a hard time collecting your money for the work done? You send out your bills monthly right? What about the junior guys/girls here do you have a hard time collecting your money? Thanks again Chris
03-02-2001, 05:25 PM
I have a contract signed on *every* property we maintain. I dont want to get burned and I always explain to the customer that it is to there benefit also. That way they are happy and we are happy.
Most time my customers come out to chat a minute
and hand me the check then.Most dont do it this way as it takes a little time,but not that much.Besides thats one thing my folks need a little of .Talking to someone other than their dog or cat or bird.
03-02-2001, 06:22 PM
We have contracts for a few of our residentials. I always get my $$$$, but some just take a little longer to pay. If I have to hound them for a check, they get warned that I cannot do business that way and usually after that they are really good. If they are still really slow, I collect what they owe and drop them. I don't have time to deal with collections. That's my two cents worth.
03-02-2001, 06:51 PM
I have a contract with every customer this year. Last year I had a couple customers without a contract, & they are the ones that I had trouble collecting from. Contracts are just a good idea all around.
03-02-2001, 07:28 PM
Contracts are just agreements in writing. If someone - buyer or seller - is afraid of a contract, it`s time to question their sincerity. Also, in any contract, if one or more parties wish to exit the agreement, there is usually no way to stop them. A contract does not gaurantee payment to the seller, or gaurantee service or goods to the buyer, because if the other party wants to stiff you, you are probably going to be stiffed.
That all said, all of our business has been written contracts for the last 15 years. If something fatal, or near fatal, happens to me, my wife and father will have, in writing, the agreements with my customers, so they can properly bill the thousands of dollars that are usually outstanding - services done but not yet billed. The contracts are also a basis for a banker to judge the makeup of your business, if you ever seek to borrow for expansion. A buyer can see the real value of your business, if you or your survivors want to sell the business. Contract is just practical to me.
It's probably not good business advice, but I never use residential contracts. I advertise the fact. My philosophy is that if I feel I need a piece of paper to enforce a contract (you have a verbal contract with all customers which is every bit as binding legally) I dont want that customer anyway. As for commercial accounts it depends on the relationship. I have a few I started out on contracts and now after years of doing business together I dont see the point. My computerized invoicing system is there in the event I get hit by a meteorite or something. Any new commercial accounts I get on paper mainly because of the amount of money involved.
03-02-2001, 10:42 PM
I get along great with all my customers, most of them I can consider friends. I feel one of the reasons we all get along so well is because they know what to expect from me ('cause it's in writing) and I know what to expect from them ('cause it's in writing). I will not, nor have I ever worked for any of my customers without a signed contract. Here's something else you may or may not believe, all my customers PAY ME IN ADVANCE FOR THE MONTH! Eleven years ago, when I started this business I got shafted for almost $2000 on a commercial property. Live and learn as the saying goes. From that point on I've used the contract. If you'd like a copy just e-mail me at firstname.lastname@example.org with contract in the subject line and I'll be glad to send you a copy. Remember, a contract is there to protect BOTH parties.
I used to do monthly billing untill last year. I now bill once a year at begining of season. Set price for lawns including cleanup fall & spring. Price per cut times 25 cuts per year hear in NY. Worked out great. Spent more time working than sitting at a desk every month trying to figure out bills. No contracts sined either.
03-03-2001, 12:59 AM
I have some people pay slow but usually a call or letter gets the check here. i too have friendly relationships with all my customers. and i also have a contract for all my customers. here its the norm for people to sign a contract. I dont have a complicated one it just states what is involved in my services, and what is expected from the customer. one page one side. If you can get away with not having contracts or getting all pre-pays then thats great! I wish it was like that here. but people want a contract around here.
03-03-2001, 02:30 AM
Well said Jim! I think contracts are a waste of paper really when it comes to trying to get your money. The main reason I use them is to make sure the terms of our service is clear, the payment is clear, and that I have permission to gain access to their propery. If someone defalts on a contract @ $135 or $175 a month I'm not taking it to court.
03-03-2001, 09:17 AM
Hey Kirb come cut my lawn =) hehe.
I don't use any contracts for my residentials and my commercials are small and I deal directly with the owner. I only have one slow paying cust and this year they are going up in price to match my fustration. I never saw a need to get into contracts I tell the customers that they can expect quailty reliable service and that I won't bail out on them with out undue cause(like not getting paid) and in return if they are not happy with me there's nothing to stop them from letting me go. People like this, they feel great not getting involved with a contract, getting great service and I have great success getting paid. I would use a contract getting involed with any large commercial job though because then it seems like your dealing with a machine rather than a person directly, to many grey areas on the big stuff. Thats why I like the smaller stuff where the owner will walk around with me and show me exactly what they would like done. Contract or no contract I am lucky to do bussiness with the caliber of poeple that I do.
03-03-2001, 10:28 AM
Is is true that written contracts are more work, when compared with the handshake. However, even a photograph of the handshake will not convince the executor of your deceased client's estate that the terms of his/her and your agreement are as you wish to state them. If you are just dealing with $100-200 a month accounts, you should have no worry about a few dollars lost is a case like that. But if you expect to move up in the business in the future, maybe you can practice on your present customers on wording of a contract. Or is everyone comfortable with $500 to $5000 a month contracts on verbal agreement?
In human history, writing was developed to share ideas. If anyone is afraid to put something on paper, what does he have to hide? Or is he just doing it the easy way?
03-03-2001, 12:08 PM
Originally posted by kutnkru
Our customers hadnt signed an agreement until they came on board with us. For us to do business thats how it was - NO EXCEPTIONS !!!
There are too many "fly-by-nite" outfits for us to worry about not getting paid. If they do not have the good faith in our abilities as contractors, then I sure as heal am not about to start mowing the grass for them.
We go to all our clients in February and give them an itemized estimate for what our services are going to cost this year.
I keep the form very simple:
Mowing - 32 cuts from 1 April to 1 December:
Bagged $_____ Dispersed $_____
Services to be renedered (_)bagged or (_)dispersed
Pruning/Shearing - cut to existing shape:
July $_____ September $_____
Services to be renedered (_)July or (_)September
***Aeration/Dethatching/Fert/Lime/Clean-Ups all followed suit.
I take two photostats with me to each clients house. They check off what they want in ink and then I put it on mine in ink. Next we exchanged signatures.
I inform them that having this agreement for 32 cuts we will be billing for 4 cuts each month on the 15th. I also mention that any additional services would be on the statement according to our agreement for that particular month.
I think that contracts are a way of clients showing that they are serious about doing business with us. The other thing to keep in mind besides a red flag going up if they are opposed to contracts, is that we are a legitimate business and we need to have records for our CPAs.
This is how we track our P&L and what is used to help determine if we can afford to purchase more productive equipment or not.
Hope this helps.
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