Does anyone only do Residential maintenance?

[RB]

I'm to the point where I have had to drop several commercial accounts because I don't plow them and they are very late payors. Plus it seems they are always shopping me around. and if they don't shop me around, in a couple of years or so a new prop. manager is hired and somehow he or she brings another co. in to do the work.

I was wondering if anyone has "been there done that" with commercial properties and now strictly sticks to residential customers?

I've been in biz for only 5 years, but I think the stress is not worth the extra $ in commercial work. I'd rather mow 3k lawns for $25 any day.

Ron

[Bob Minney]

I do only residential work myself, except that I had 1 commercial property for 4 years untill it sold. Because it was owned by one of my residential customers + very small, was the only reason I took it. I prefer more smaller accounts so if someone is paying slow it's not as serious as a commercial customer that might be 5-20% of my business. But thats just me.

[LAWNGODFATHER]

I don't waste to much time bidding comercial because of the reasons listed.

[Mykster]

When I first started I wanted to target just commercial. My first two accts. were commercial properties. One property sold and the new owner did not want to pay the money, so he cancelled. The place hasn't been touched since mid-season last year. The other was always late on their payment. Constantly had to ride them to get my money. It's a large storage unit company and I'm sure that if people were late paying them they would not hesitate to add on late fees. Find that kind of ironic. So now I lean more toward residential. They seem to be on time more with their payments and seem not to eager to look around.

[Nebraska]

There are guys that make good money on a strictly commercial maintenance focus... In my opinion I would rather grow steadily pursuing higher profit accounts. In our area the higher profit accounts seem to be more readily available in the residential sector of the market. Add this to the fact that our residential customers stay with us MUCH longer (till they move or die) and we find no reason to pursue the commercial accounts; the ones we have, have come to us on their own. This is were you have to ask yourself the question of gross revenue versus net profit. I also notice the "newer" guys are eager to bring commercial properties on at rock bottom prices; and believe me they take advantage of it.

[JimLewis]

We do strictly residential work. I never did get into commercial too much because I can't make the hourly rate that we do with residential. So most of the times in the past when I've bid big commercial maintenance, my bids are way too high and are almost never accepted.

However, the 4 or 5 commercial accounts we have had over the years have all turned into nightmares in short time which just furthered my dedication to only doing residentials.

[Commander]

Here is how I am trying to grow my business.
1) get about 60 or so estates.
2) get at least 100 little places
3) get a few good relationships going with some "commercial accounts" which pay extremely well.

I find that with the estates you will make very little money cutting grass, however you make a good chunk of money doing landscaping and other side work. Much more so than with the little places. The little places though, in and out in under an hour is good money for lawns and provides a good amount of smaller side jobs as well as your occasional mid size project. Then you have what I don't really consider commercial properties, but they are. These are the ones where you don't have to worry about them getting rid of you next year because you know the owner of the place and he/she isn't going anywhere for a long time unless you really screw up. Those types of accounts have very little grass to cut, and a whole heck of a lot of landscape services that pay well because you are the only one that they call. Trust me, those types of "commercial accounts" are out there. The estates and small lawns are usually the same way. They will stay with you through thick and thin.

[Commander]

By the way, if there is any question as to what the other type of place is, it's something like this.

[rodfather]

Hey Commander, is that JR's place on Dallas?

[LawnLad]

I understand the commercial concerns. Residential customers can be finicky too. I think it comes down to relationships and finding those customers that value you as a person and the service your company provides to them. They have to get value for their dollars, which means you have to meet their expectations. Don't work for someone that has different priorities than yourself.

Commercial or residential can be both profitable and unprofitable depending on who the operator of the company is.

Check out ALCA's Operating Cost Study book and look at the numbers for the regular companies and the high profit companies and see what the difference is in their numbers. How you run your business will determine what your profit margin is.

[jaybird24]

I've found my best luck with a cross between the two- condos. Around here most of them are fairly large -some with 20 or more buildings and easy to do. It's nice because these people own them so they are more discriminite and like some of the others have said- get to know some of the owners or at least managers at some commercial accounts and they'll tend to stick with you. Heck I've even had some leave the property management place that I was originally contracted with and they told the new property mgmt. to bring me in. Guess what --that led to even more work. These also happen to be the first to pay-usually within a few days after i send out invoices because they have accounts set up just for maintenance.

As far as profitability goesI often make more because you can lump a few different services together when your there and your not losing anything in drive time. Alot of guys around here dont want these accounts because they think they're too picky - but no more so than any homeowner and its like having 10 or twenty homes on the same street.

[Kent Lawns]

I 2nd LawnLad.

They key is figuring out WHICH commercial to do. The ones that are owned by an out-of-town corporation is my first red flag.
Main contact person other than the owner: 2nd red flag.
-And the list goes on.

With commercial, the GOOD accounts always come down to relationships. If you're good at that, commercial is the way to go. If not, residentials may suit you better.

[Bladewielder]

I agree with Lawnlad. The important thing regardless of what classification of account is the relationship between you and your customers. We have mostly residential accounts and then some businesses. We do try to treat both of them the same personally but sometimes that is just not practical with a commercial account. Definitely our favorite thing about our resi's is how much they like us and the service we provide. Sometimes it is hard to "make time" when every person you come across in a day wants to shoot the breeze. While we do like to talk to everyone there are times like this when we appreciate the quick in, quick out approach that is possible with our commercial accounts.

[the point man]

Yep, residential only. I'd do commercial if one fell into my lap,
but I don't solicit them. I love my old ladies and lack of headaches
thereof. But I don't feed my family with this business; I'm
retired and do it for the beer money.

[proline32]

I used to do mostly commercial, Taco bells, KFC's, IHOPS, burger kings, you name it..... Today I strictly do residential, I got tired of not getting paid in a timely manner, or store managers bitching about stuff like they wanted us to do work that we wern't contracted to do, or what really got me was the companies started to cut back the amount of time we had alloted for each store to save a few bucks, then they ***** about how the flowerbeds didn't look as nice, then it got to the point that some of the companies were getting 90 days behind in payment and not returning our calls for payment. You name it, today I let the big guys have those accounts.

[65hoss]

I've moved back to more residential. I don't even go looking for comm'l stuff anymore. I hate the new person right out of college with a business degree that they call him/her "business mgr". They think they have to prove their worth. Guess who gets taken out 1st?

[odin]

Vast majority of our accounts are residential .
Like 65 hoss said dealing with the smart a$$ so called business managers and purchaseing agents is a pain.
We also got hit with a bank rupsey on a big commercial account.

[grasscanuck]

I have over 230 small residential contracts and couldn't be happier. My overhead is next to nothing and I definitely don't have all my eggs in one basket. If anyone gives me problems, it is not an issue to drop them, they can't make or break my business. I have never done commercial, so I don't have that persective, but I have no stress, no hassles, and five months a year vacation. Couln't be better.

[1MajorTom]

Yes, we only do residential now.
All of our commericals always paid late. And the amount of debris that we had to pick up was not good.

There are pros and cons with both. We just happen to like residentials more.

[Commander]

I would just like to interject something about residentials. You have your residentials who pay $100 a month, and then you have your residentials who pay $1000+ a month. You take a hit from one of those $1000+ a month lawns and that's not exactly a good thing. As far as condo's go, they are cheap SOB's. Few look for the best quality, most go for the best price.

[Tony Harrell]

I'm glad to hear everyones opinion about commercial accounts. I'm just getting started but my experience in commercial pest elimination doing all of these types of accounts have soured me in having anything to do with them, unless maybe if they were locally owned. Even then, they are subject to be sold. Fast food places are bought and sold all the time. I was reliving a lot of my experiences while reading all of the previous posts. I'm sure there's some LCO's out there that go after these, they can have them.

[landscaper3]

We are mostly commercial but we do maintain around at this time 60 homes, Only reason we stay mostly commercial is its a regular paycheck EVERY month wether we work or not! Plowing up here is $$$$$$$$ and commercial accounts are the way to fly and as the same with mowing. We do love our residential but alot of people still remeber 9-11 and dont want to spend money for many reasons and even the stocks and bonds and trading are slightly increasing they are way down from before 9-11. We make our greatest EXTRA income from our residential customers, like landscape lighting, hydroseeding, trees & shrubs, mulch, irrigation systems and more. Residential customers (most) love extras like listed and will pay big $$$$ for them. Mt 02cents stay 50% & 50% or close to that area and you will do just fine!!!!!!!

[proline32]

I agree with commander's statement about condo's..... I recently was asked to bid on one that basicly was neglected over the winter and hasn't had a blade touch it since last late october. I told the president of the condo association that it would cost $150 per unit for initial clean up X 20 units and $1000 a month for basic mowing trimming and edging.... My bill is to be paid by the tenth of the next month or thier will be a late charge I also wanted the name of the previous LCO that took care of the place to ask them for a credit reference on the condo association. The guy ( condo Prez) informed me that they won't pay over 800 a month for services, I left and called the previous LCO, he told me the reason they no longer do the condo's was because of late payments and that some of the owners were a real pain in the ass.

[Just Cut]

I like the loyalty of residentials, with the commercail properties I find that I am always getting my pockets picked

Ron

[Loosestrife]

We are about 50/50% commercial/residential. I prefer the commercial.

The commercial that we do are perhaps not the commercial that others are referring to, ie. fast food resturants, small shops run by the owner. Yes, we do have a few of these, but the majority of our commercial is property that is owned by a group of individuals, and is managed by a professional property management company. We also maintain a few cemeteries.

We find that while there is a bit less loyalty with commercial, it is a trade off for all the aggrivation that is caused by homeowners. We don't like to deal with Mrs. Jones not wanting you there on a Tues. morning, because it is her bridge party. We don't have the problem with customers coming out and wanting to know "what is wrong with this plant, or how much to do this or that". Don't get me wrong, we still have some of that with the commercial accounts, but it is mostly handled over the telephone.

Payment from residential accounts is a little faster. We do have some commercial accounts that are late payers, HOWEVER, we were told of the payment process up front, and we are able to accomidate it. We budget our cash flow so that the slow payment is not much of an issue. This can hurt a small operator, especially if they do not budget for it. It becomes almost a non issue if you budget for it.

With commercial, we are usually working within a budget, and often do not have the oppertunities to sell high profit add ons.

Residential customers are more likely to purchase the high profit add ons, however, those high profit add ons are also at times competing with a car payment, vacation, new kitchen... and cannot be depended on.

Commercial accounts usually have a master plan for the property. I.e. biuld building and landscape in 1980. Continue with normal maintenance each year, and in 1990, do a minor landscape renovation. In year 2000, do a major landscape renovation. These are just fun numbers. They also do this planning with all facets of the property, from repaving the parking lot to replacing the roof, to major remodeling. With homeowners, often they do not budget for thiongs like roof replacemet, and when that time comes, they are forced to cut back in other areas.

We find that with commercial accounts we are competing with contractors on a little higher level. BEcause of the insurance and licensing recommendations, we are not dealing with a guy with a murray in the back of his Torino. With residential, this guy can be your competition. I think that I can count on one hand the number of residential accounts that have asked for proof of insurance in the last 10 years. On some commercial, insurance proof is required to be submitted with the bid, if not, the bid is automaticlly rejected.

With commercial, we do, however find ourselves bidding against new comapnies trying to get market share, or get their foot in the door in an area, and will bid low, or even worse yet, bid low becuse they do not have an accurate pricing schedule. We have combatted this by targeting commercial accounts that do not automatically award bids to the lowest bidder. Often times, we are not the low bidder, but we represent the best choice out of the pool of bidders, for various reasons.

In conclusion, commercial is not without its problems. Residential seems to have more hedaches for me, I'm tired of hearing little old ladies say" you are not going to use farm machinery on my lawn", or " are you sure it needs cut", or "the kid that cut my grass last year only charged $25", or "what kind of plant should I put in that garden", or "I'm having a picnic this weekend, can you do a major clean up tommorow"?

[AltaLawnCare]

Originally posted by Loosestrife..
We find that with commercial accounts we are competing with contractors on a little higher level. BEcause of the insurance and licensing recommendations, we are not dealing with a guy with a murray in the back of his Torino.
Thats the advantage of commercials.
:p