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View Full Version : Commercial vs Residential - Which do you favor?


DaveinVa
03-07-2001, 07:29 AM
To refresh your memory folks - I'm the guy with the commercial janitorial service that is kicking back and watching you pro's debate the critical issues on this forum as a forerunner to adding a lawn care division of our company..........so here's my question for you guys "in the know".... Do you prefer commercial clients over residential and if so - why? In my janitorial business we phased out our residential services years ago because they were not at all profitable for us - the customers were always wanting service dates switched and forever wanting more and more for less and less money..........so we cut the cord - and went straight commercial and have never regretted it. Our commercial clients number over 350 now and we never get jerked around although the performance standards expected of us are much higher which we have no problem with. So would you say the same is pretty much true in lawn care?
Thanks,
Dave Roberts
Rite Way Janitorial Service

Wildwood
03-07-2001, 07:43 AM
The important thing about getting commercial accounts is to try and get as broad and varied a client list as possible,right from the start. If you have most of your work with one or two large commercial accounts, and they make a change in contractors for whatever reason, you could be scrambling. At least the withdrawal of one or two residential accounts doesn't do much to disrupt one's income

tpirobert
03-07-2001, 07:51 AM
Ditto on Wildwood post above. Since you already have a commercial customer base, I would target those accounts. Just take your time and have all systems in place before diving in. However, I don't know how far you travel for your janitorial service, but if you travel into DC that could be a pain with truck and trailer. It is easy to put commercial accounts on annual contract...helps with cash flow. All the problems you mentioned with res. janitorial apply to lawn care as well.

kutnkru
03-07-2001, 07:58 AM
I believe that a career in the Custodial Arts as far as Industrial/Commercial accounts are concerned is far superior to Grounds Management.

In our profession they are constantly looking to manage the budget, and the overall exterior appearance even though important is not as important as keeping their offices and cubicals sparkling clean. I have never competed for a position in the custodial arts so I could not tell you which is more profitable. I do know that you as an interior contractor will find less competiton than we will and do each season for the exterior maintenance contract. The reason I feel this way is that I dont see 1000 contractors in my area for competeing for the interior market.The numbers are closer to 100-200 companies, which makes a drastic difference.

As far as which is more profitable, under the right circumstances I would vote for Industrial/Commercial accounts. The cold-hard-truth is that no matter how superb or spectacular we may project a companies image by meticulous care for thier grounds management needs, that our contracts always seem to go up for re-bid each season. If they do not put it out to public bid, it has definitely been scrutinized.

When compared to Residential accounts, I think that it is much easier to find and keep loyalty amongst them and in turn make more money in the long run thru repeat business. Under the right circumstances you could be cutting 3-5 residentials an hour and make more per hour than the Industrial/Commercial accounts.

At one point or another, I believe that Residential/Commercial/Industrial accounts all asses whether or not they are getting their moneys worth. So each account will go up for re-bid, its just a matter of how long it takes for them to get to the block.

Thanks for reading my term paper -LOL
Kris

DaveinVa
03-07-2001, 07:58 AM
Yes indeed - I have seen many companies come and go because they put all their time and energy into one or two large accounts - and were held hostage to their every whim .... - who was it that said "don't put all your eggs in one basket"?
Dave

GrassMaster
03-07-2001, 09:10 AM
Hello Everybody:

The Residential Customer is far more trouble, but they give you loyality?

The Commercial Customer, is not as demanding & far more profitable. Butt not as much loyality?

In your situation I would go after the Commercial Customers you have now! The more services you can provide them the Better!

Providing both Janitorial Services with Lawn Service should be an excellent blend for you! :-)

lawrence stone
03-07-2001, 09:43 AM
If you can combine the lawn care and cleaning services at the same visit you have an advantage of no travel time.

But is not most office/factory cleaning done on 2nd and third shift.

You need to be a auto tech to be in the lawn mow and landscape maint biz because of the sheer number of gasoline engines we have to maintain.

For every machine you will be using you will need to have at least one back up with you on site.

If you can't work on your own stuff all your profit will
be left at your local OPE dealer.

joshua
03-07-2001, 01:41 PM
commercial is by far a higher paying job in only a few guys bid on it, but if a lot of guys bid then the price is gunna be driven way down, and thats not good if you want a profit. it all depends on the customer. if they want their yard to look like one of the best in the area its worth having them because they will pay to make it the best, if they don't care and don't want any extra's then it might nt be worth it. unless you just cut.

John DiMartino
03-07-2001, 02:08 PM
Stone-you are so right about knwing how to wrench on things-I know guy who gross big bucks-but they have 2500 dollar a month repair and maintance bills,between trucks,trailers and equipment.I look at the invoices,and they are getting actually 300-400 in actaul parts-the rest is profit,labor,sharpening,services-Most of it could be done on saturdays in there own shop.These same guys buy old trucks and complain that they cost so much to keep fixing,but wont take the time to try to figure out how they work,so they could save a lot of money.

65hoss
03-07-2001, 04:00 PM
I prefer residential mostly. With commercial you have to deal with the cars in the parking lot, traffic, trash and tons of competition to lowball you. I can make the same or more money doing residential and during the day usually nobody is home to bother you. Like it was said above, you will also get more loyalty from residential customers and you get references from them also.