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View Full Version : Annual Contracts a Pain?


JohnnyRocker
11-24-2009, 09:26 AM
I was wondering if anyone who uses annual contracts ever regrets it. I have this one where it seems like the customer assumes I need to be there for anything all the time. And I'm also wondering what to do if they cancel after mowing season, which would mean I got screwed for aeration,etc. I'm starting to hate the annual contracts.

MnDLawn
11-24-2009, 09:36 AM
Just make sure you and they know what you're getting into.

ALC-GregH
11-24-2009, 09:52 AM
Your not making yourself clear with them on exactly what your going to do. If they step outside of the contract and want you to do other work not written down, then you need to let them know that it's extra. A way to protect you from "loosing" your aeration job or any other work for that matter is to get a deposit of x amount (I get 30%), then 1 month up front before you even start doing any work. After that, you should be able to get into Sept and October without taking a hit from a cancellation as long as they have been paying monthly. If they drop you before then, your in the black which would be non-refundable.

I'm working on my customers to go full service and set them all up on a monthly payment plan. With the customers I have, they all like me very much and we treat each other like family. My cut only customers have the same option but only require a 1 month deposit up front. That way I'm getting paid BEFORE I do the work each month. If they cancel after the 3rd cut, I still have another weeks pay from them. Again, non-refundable.

Turf Dawg
11-24-2009, 09:52 AM
I use them on all the commercial accounts. It states in the contract what will be done and how many times it will be done. Some new ones at first may think since they have a contract that you should be there every day if needed, this is when I show them that it states once per week visit for the months of _____ and twice per month for the months of _______ and once per month for the months of _______. All mine are for 12 months now. Back when I had employees, if it was a larger place that I might need additional equipment on it would have to be a 24 month contract.

topsites
11-24-2009, 10:59 AM
Not sure if this helps, but in my book a verbal agreement is a contract.
Plenty of good business that way, you just have to learn to stand up for yourself and don't let them walk all over you,
at first some will and it is to a point inevitable but over the years it gets better, the only difference is the verbal agreement
lacks the absolute security of a black and white piece of signed paper but it is nevertheless just as valid a contract.

Because to answer your question, I had that same experience with the 12-month thing,
seems like there's just too many ways for me to stick my neck out, and by the way...
If you do it so that your neck isn't sticking out?

There exist ways, you know, where you do just enough in the first 3-4 months so that their payments cover
the work and then some, to where time for core aeration comes around you're well covered, but guess what?
Every customer I've done that to didn't last, they got impatient on me, like you said,
they expected me to do more all the time, and not by no small margin either.

More like they wanted me to do $500 worth of work right away while they paid $2-$300 a month...
And I was like :nono:
Don't we know what that usually leads to ...
Sure enough, and I never had many contracts like the ones you speak of, I tried it for a bit, but it never worked out either.

Then I didn't try that 12-month thing until I was in my 4th or 5th year, and by then the worst of the
stupid moments had left my business, still I never had much luck with it, just speaking for myself.

So I'm a per service guy, verbal agreement, once the work is done I like to get paid, that's it.

JohnnyRocker
11-24-2009, 08:14 PM
Your not making yourself clear with them on exactly what your going to do. If they step outside of the contract and want you to do other work not written down, then you need to let them know that it's extra. A way to protect you from "loosing" your aeration job or any other work for that matter is to get a deposit of x amount (I get 30%), then 1 month up front before you even start doing any work. After that, you should be able to get into Sept and October without taking a hit from a cancellation as long as they have been paying monthly. If they drop you before then, your in the black which would be non-refundable.

I'm working on my customers to go full service and set them all up on a monthly payment plan. With the customers I have, they all like me very much and we treat each other like family. My cut only customers have the same option but only require a 1 month deposit up front. That way I'm getting paid BEFORE I do the work each month. If they cancel after the 3rd cut, I still have another weeks pay from them. Again, non-refundable.
So you get 30% of the total annual amount as a deposit? Do they get it back after the 12 months are finished?

quiet
11-24-2009, 09:53 PM
I have 12 month contracts. But I don't amortize additional costs into the total. If a fertilizing is done during that month, that is added on to the monthly invoice in addition to the basic monthly charge.

I don't amortize the costs over the entire 12 months to avoid just such a situation you're descrbing. If someone cancels me in January, I'm not taking a loss on the fertilizing I already did in September. It was on September's invoice.

ALC-GregH
11-24-2009, 10:46 PM
So you get 30% of the total annual amount as a deposit? Do they get it back after the 12 months are finished?

30% down sorry I wasn't clear. The other 70% is divided into 12 monthly payments.

TheC-Master
11-24-2009, 10:57 PM
I'm doing the year round thing too, this is really the easiest and best time to do so. I don't do the 30% up front, I just take it at the monthly rate and I do it for the month up front. Keeps me with money, more of it, I use all of my tools, and I'm busy year round. Next year I'll type up something for people who like to try those games. I like doing it this way *much* better than the other way. I just made it happen for myself instead of waiting for it to come to me.

rvpkanapsky
11-28-2009, 12:02 AM
Contacts are a must. With most customers you never have to enforce them, but ther is always at least one bad egg

JohnnyRocker
11-28-2009, 12:24 AM
I know, but we were discussing annual verses seasonal.