View Full Version : A Pricing Question For Everyone
01-19-2006, 01:02 PM
I've been in business 14 years in NJ doing both landscaping/hardscaping and maintenance both residential and some commercial. My question out to everyone is pertaining to the residential maintenance. How many of you guys charge a monthly rate as opposed to a by-the-cut-rate? I've been charging by-the-cut but am now seriously considering switching to monthly. We have 350 accounts, 80% of them weekly, the rest bi-weekly. It is becoming very difficult in the way of billing and keeping track of who was cut and not cut and when they were cut, etc, etc, etc. Also I think this will generate more steady income. I know this may turn a lot of customers away but we think we are willing to take that chance. Please give me your input and comments. Thanks, Mike
01-19-2006, 01:52 PM
I could not survive without monthly billing .... here's a sample of what I give every new bid .... your numbers may change but the format is understood
General Cash Flow is a concern for the immediate and long-term health of any business. A true understanding of the yearlong commitment with month payment breaks down to 42 visits per year, divided the 12 months in a year. What we wish to do is spread the cost of “per visit” through out the year so in the wintertime we have steady cash flow.
Mr. Doe has a normal home in Merritt Island and wishes to have lawn service; he has received a bid for $70 per month. This breaks down to $20 per cut ($20 x 42/12 = $70). This means in the Summer Months when he will receive 4 cuts yet only pay $70 not $80 and in the Winter Months he may only receive 2 services yet still pay $70. We must keep in mind that there will be 3 Summer Months when he will receive 5 cuts and 2 Winter Months when he will receive 3. November thru March he will receive bi-weekly service and April thru October he will receive weekly service, yet what he is truly paying for is 42 visits per year.
Ms. Ann has a mid size home in Merritt Island and wishes to have lawn service; she has received a bid for $ 85 per month. This breaks down to $25 per cut ($25 x 42/12 = $85). This means in the Summer Months when she will receive 4 cuts yet only pay $85 not $100 and in the Winter Months she may only receive 2 services yet still pay $85. We must keep in mind that there will be 3 Summer Months when she will receive 5 cuts and 2 Winter Months when she will receive 3. November thru March she will receive bi-weekly service and April thru October she will receive weekly service, yet what she is truly paying for is 42 visits per year.
Mr. & Mrs. Smith has a larger lawn as well as more edging & weed eating areas; they also wish to have hedging performed 4 times č spring, twice-in summer than a fall trim. They have received a bid for $ 105 per month (which is $30 per cut) just for the lawn. The hedging would be $40 per event or $160 per year when added with lawn service the monthly cost would be $120 (we round numbers up to make billing & payment easier)
We can include services such as Hedging or Spraying of Weed Killer with monthly billing or bill separate when performed. We always bill extras such as spring clean up hard trimming of hedges, crepe myrtles, ornamental grasses, mulch, flowers or palm trimming when they occur.
EARLY CANCELLATION BEFORE FULL YEAR WILL RESULT IN A FINAL BILL PRORATED TO THE EXACT NUMBER OF CUTS RECEIVED FROM 1ST DAY TO LAST DAY OF SERVICE
Example a $25 per cut or $85 per monthly account, if we started June 1st but customer cancels Nov 1st .... 5 Months @ $85 per month is total of $425 .... but in this time frame they received 22 cuts @ $25 is $550 so they would receive a final bill of $125
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