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mtdman
02-18-2004, 11:21 PM
So I'm moving to get my customers on a season rate with equal monthly payments. 12 payments over the course of the year is outta the question for me, not a choice. I don't want to deal with tracking down payments during the winter months when I'm not working, I don't want to get stiffed by people who will pay through the season and not during the winter, and it's just generally not something I want to do. My season runs pretty much from mid April to mid November.

The question is, should I do 7 payments from May through November, or 8 from May through December. Or does it matter?

lawnman_scott
02-18-2004, 11:25 PM
I do 12 payments because we work year round here. Every week in summer, every other in "winter". stick with 7. Christmas comes before your 8th payment that will be due in Dec. Besides, what are you going to do about it if they pay in jan or feb? take them to court for one month late fee? 7 sounds good to me. My worst months for late payments are dec and jan.

Premo Services
02-19-2004, 12:27 AM
I have been doing 10 monthly payments. They start March 1st and end December 1st.Works out well for me andf my like it also.
More are going to get the agreement and do the monthly payments.Yea they will like it too...:D

NCSULandscaper
02-19-2004, 01:07 AM
I do 12 months so i dont have to work in the winter time much.

bastalker
02-19-2004, 01:40 AM
I only bill my commercials on an 8 month plan from march 31 - october 31. My residentials I just bill monthly, because they usually want odds an ends done thru the season, and it wouldn't be feasible to have a set monthly payment.

Wesley's Lawn
02-19-2004, 02:05 AM
I do 12 months its nice cause i know what im getting per month and dont have to rely on mother nature for snow.

mtdman
02-19-2004, 02:08 AM
Yeah, as I said, 12 months is not an option for me. I frankly don't trust my people to pay on time, or to not stiff me for $$ owed after I'm done working. I have no problem getting through the winter on the money I make through the year.

I am going to push this as my preferred billing plan for residentials. How hard can it be to add billing for extra services you perform through the season, as you do them? I gave my people a chance to add stuff in up front before the season started.

dkeisala
02-19-2004, 02:34 AM
You know what - if you can't trust your customers, how do you expect them the trust you?

I understand your thinking. I wrestled with being able to trust clients to pay througout the winter. But I run a business and my bills don't stop coming in during the winter months so I still need a cash flow to keep the business running flush. And I don't want to have to go to the extra work to make sure I have enough to make it through the winter months. I have enough to worry about. But in all my years of business, I have rarely had to deal with customers not paying their bills or trying to cancel on me once December rolls around. And when they do, it is usually customers that I wish would cancel anyhow.

An even cash flow is so much easier to deal with than trying to tend to a 12 month budget on 7 months worth of payments. But hey, if you are up to the task, more power to you.

mtdman
02-19-2004, 02:45 AM
You know, I really didn't want to argue 12 months, which is why I didn't make it an option on the poll. I understand that some people do it that way, I'm not going to. It's not better or worse in general, 12 months doesn't fit my needs.

Invariably I have stragglers every year that owe me money for the last month and pay late. I don't want to deal with that with this plan. And why invite trouble when I don't need to? I've never had a problem budgeting or making enough money to get through the winter in the past. I don't need to have money coming in all year, this plan is preferrable to me than 12 months.

Phishook
02-19-2004, 03:23 AM
What about April? If you could get away with it, April-Nov.
The smaller their payment, the better.

dkeisala
02-19-2004, 03:26 AM
mtdman doesn't want input - he just wants someone to reinforce his methods of operation, not challenge them. If you don't agree, don't post. How would you like to work for him?

dkeisala
02-19-2004, 03:28 AM
101 viewings of your thread - 8 votes - way to go! Maybe that sends a message?

mtdman
02-19-2004, 03:45 AM
If I didn't want input, I wouldn't have posted a poll. I asked about 7 months versus 8. I stated that 12 months wasn't an option for me. That is all. I do not think my statements to you were inflammatory or rude, just answering what you wrote and trying to keep the subject to the question at hand.

At least I can stand the heat without crying about it.

dkeisala
02-19-2004, 04:06 AM
I'm sorry mtdman - i'm just feeling a little cocky tonight and you ending up being my target. No offense intended, sorry for being a jerk about it all.

You gotta run your business in the fashion that works best for you.

jajwrigh
02-19-2004, 08:39 AM
I would say 7 or 8 months is fine either way. Whatever works best for you. I suppose it depends if you want more money less often or less money more often.

gogetter
02-19-2004, 09:56 AM
Originally posted by mtdman
My season runs pretty much from mid April to mid November.

The question is, should I do 7 payments from May through November, or 8 from May through December. Or does it matter?

I send my bills out on the last day of the month. So based on what you said about the length of your season, I would say 8 payments. From the end of April to the end of November. And as said, this makes for a lower payment for the customers.

GrassBustersLawn
02-19-2004, 10:08 AM
I sent out a "Service Agreement" to last years clients. Gave them an option of 8 payments due on FIRST of each month starting in APRIL thru NOV. Probably had 75% take it. Gave them the "helps you budget" line. Gets me paid UP FRONT instead of behind. You are likely in same climate/season as I am. I'd try for April instead of May!


MIKE

mrpickles
02-19-2004, 10:12 AM
I'd like to comment on this topic. Last year we used a 10 payment schedule. The first payment was due on or before march 1st. The final payment was due on or before December 1st. Though this plan did not effect exsisting clients who were accustomed to paying differently, it was offered to all new clients. It sold very well. This season, we are really pushing for all new clients to pay this way.

Customers really seem to jump on the convenience of this plan, and it's a great way to get startup funds rolling early before the season begins. Best of luck.

Pickles

landscapingpoolguy
02-19-2004, 12:26 PM
here in NJ I do 9 payments, April through Dec. Unfortunatly this year Dec got cut short with snow be we still worked about half the month.....

Chuck

brucec32
02-20-2004, 02:05 AM
Originally posted by mtdman
Yeah, as I said, 12 months is not an option for me. I frankly don't trust my people to pay on time, or to not stiff me for $$ owed after I'm done working. I have no problem getting through the winter on the money I make through the year.

I am going to push this as my preferred billing plan for residentials. How hard can it be to add billing for extra services you perform through the season, as you do them? I gave my people a chance to add stuff in up front before the season started.

I think you're wise not to hope people keep sending you checks for 4 or 5 months when you're not doing much for them. Too much temptation for them to cut out and run and find another guy next spring.

As for those who push the 12 month thing in the misguided hope that it means more money coming in, well, more power to them, but customers usually aren't that dumb. If they're getting X amount of service, they will pay for that and only that. If you're doing 8 months of work and spreading payments over 12 months, you're actually giving them an interest free loan on part of their bill if you start work in March and end in November. And if someone is billing equal amounts over 12 months solely for budgeting and cash flow reasons, they need to be more disciplined and learn to save what they earn in the high season. It isn't that hard.

Some guys in markets with real winters look at checks rolling in in January as "found money" and smile, but I find they often have to discount their monthly rate to get people to go for that.

For example, I billed monthly for actual work done. Some months it might be $200 (5 cuts at $40 ea). Others $80 (2 cuts maybe in early spring or late fall). Others $0 (dead winter). Another guy might come in with a bid of $100/month over 12 months and earn $1200. I would earn the same $1200 for 30 cuts spread over the year. But I would KNOW I got paid fairly each month and was never "in the hole". And I was never afraid to cut a problem customer loose if I wanted, since they never owed me much. Someone billing a set amount year round might be $300 in the hole at one point in the year, or ahead at others, depending on the setup. Where I lived, the workload was heavily weighted to spring and early summer, and most customers signed up then too. So by the end of the summer you'd have done much more work than you'd been paid for.

Now for a year round market, it makes a lot more sense to send out nice equal bills 12 months a year.

I also find a lot of "smoke and mirrors" attempted by some guys with their billing methods. I also know of examples of guys who based their whole strategy on promising X amount of work for a set monthly fee, then trying to make their profit on cutting corners and skipping service visits. Weather a little dry? Hit it 3 times a month instead of the 4 in the specs and hope they don't notice. Wait a few more weeks to get to those shrubs so you only do it 3 times a year instead of 4? Hey, who cares if they dont' actually call and complain?

I prefer to be more straightforward and honest about the costs. The guy who taught me the business had a phone ringing off the hook with complaints about stuff like that. I'd rather make less and feel good about it.

Premium Services
02-20-2004, 02:57 AM
I use 12 monthly payments to have a year around income. It's better than trying to put enough back for the winter.

brucec32
02-21-2004, 02:58 AM
Originally posted by dkeisala
You know what - if you can't trust your customers, how do you expect them the trust you?

I understand your thinking. I wrestled with being able to trust clients to pay througout the winter. But I run a business and my bills don't stop coming in during the winter months so I still need a cash flow to keep the business running flush. And I don't want to have to go to the extra work to make sure I have enough to make it through the winter months. I have enough to worry about. But in all my years of business, I have rarely had to deal with customers not paying their bills or trying to cancel on me once December rolls around. And when they do, it is usually customers that I wish would cancel anyhow.

An even cash flow is so much easier to deal with than trying to tend to a 12 month budget on 7 months worth of payments. But hey, if you are up to the task, more power to you.

Yeah, it must be a bear trying not to spend that money you get in only 7 months on hookers and booze.

brucec32
02-21-2004, 03:01 AM
Originally posted by Premium Services
I use 12 monthly payments to have a year around income. It's better than trying to put enough back for the winter.

That is a rent-to-own furniture mentality. See my above post.

Geez, does anyone have any discipline? How hard is it to open a savings account and prepare a budget?

"no thanks sir, I'd rather you pay me 4 months from now. It's easier for me to cash your check at the liquor store then".

I feel like I walked into the bizarro world.

kris
02-21-2004, 09:38 AM
I'd go for the 8 payments .... a bit of a smaller number. I wish I had the options in your poll ..over season is short here...I bill separately for spring cleanup in April and regular maintenance goes from May - Oct.
Since when did we become banks and let customers have our money no interest? dkeisala can you come do some work for me and I'll pay you in 4 months?

qualitylandscaping
02-21-2004, 10:10 AM
1/3 down upon contract signature.. 1/3 due two months after contract signature.. That last 1/3 due 4 months after contract signature.

3 equal payments and its all paid in advance (so i can't get ripped off).

Offer 5% off rate if customer elects to use this option (many do)..

lawnman_scott
02-21-2004, 10:28 AM
Originally posted by brucec32
That is a rent-to-own furniture mentality. See my above post.

Geez, does anyone have any discipline? How hard is it to open a savings account and prepare a budget?

"no thanks sir, I'd rather you pay me 4 months from now. It's easier for me to cash your check at the liquor store then".

I feel like I walked into the bizarro world.
I agree. 12 payments of $1 are the same as 6 payments of $2. Your not going to make any more money, its just that the customer will be keeping the money for you so you dont blow it all. Kind of like mom did when kindly old grandma gave you $10 for your birthday and mom didnt want it all spent on candy the next day.

NCSULandscaper
02-22-2004, 06:32 PM
Originally posted by brucec32
That is a rent-to-own furniture mentality. See my above post.

Geez, does anyone have any discipline? How hard is it to open a savings account and prepare a budget?

"no thanks sir, I'd rather you pay me 4 months from now. It's easier for me to cash your check at the liquor store then".

I feel like I walked into the bizarro world.

Just because its not your prefered method doesnt mean its a bad one. I use 12 month payments, because the customers like it, the fact that i only take 1 month off in the year from doing work on contracts, and some people still like to see money coming in for the winter. If the method works for people, do not bash them from doing it.

GreenMonster
02-22-2004, 06:47 PM
IMO if you're working 8 months charge it over 8 months. If you do it in 7 months, does it kinda make you feel like you're working for nothing that last month? A mindset sort of thing?

DFW Area Landscaper
02-22-2004, 07:09 PM
MTD,

++++Yeah, as I said, 12 months is not an option for me. I frankly don't trust my people to pay on time, or to not stiff me for $$ owed after I'm done working. I have no problem getting through the winter on the money I make through the year.++++

I say you're on the right track with 7 or 8 payments per year. Either one should work fine. Seven leaves you with one less payment to collect than 8, so I think I'd lean towards seven payments. There are lots of guys billing 12 months for 8 months worth of work, but Brucec32 is exactly right. You run the risk of them cancelling in winter. And not only would you lose a customer, you'd be getting stiffed on work you've already done. Of course, if you spread it out over more months, you can flash a lower monthly payment in front of them, but there is a risk with that, in my opinion.

I don't trust my customers to pay either. I just checked and I have been paid on 92% of the work I did in 2003. 8% Uncollectibles for 2003! I kept telling myself that they'd eventually pay, but they never do. I refuse to work at collecting money. If my business model works, it'll only work if I don't have to work my azz off to get paid. I just had another customer who had always paid late just not pay by the due date on 12/25/03. Sent them another bill, and again, no payment on 1/25/04. It really pizzed me off last week. They still haven't paid and honestly, from what I've seen of the average american this past year, I'll be surprised if they do pay. That customer was the proverbial straw that broke the camels back.

I've finally decided to bite the bullet and give up the credit card processing fees. It's only 2.29% through Payright.com, plus $9.95 per month. I'll need to spend about $150 on the PC ChargePro software package. And I had to commit to a 36 month term. That's cheap compared to what my uncollectibles were in 2003. Going forward, no one will have me doing any work for them without a.) advance payment for final estimated month's worth of service and b.) a valid credit card on file. If I have problems getting those things, I have problems. But I know my business model doesn't work the way I was doing things in 2003. Gotta try something different this year.

Later,
DFW Area Landscaper

mtdman
02-22-2004, 09:15 PM
Well, since they are all printed up now, I went with 7. That way I get paid all my money by December, other than cleanups, and I don't have to spend time all winter chasing the last payment down from customers. And people won't be wondering why they are sending $ in December when I'm not doing any work.

This is the 1st year doing this option, next year I may try to push it to 8 payments and start with April. I didn't want to throw it at my customers and then demand a payment right away all at once.

I agree with Bruce. No since in giving financing to my customers for free for 4 months in the winter when I can hold that $$ in my bank account. The whole point of this was to equalize the payments, and allow me to better predict a budget each month without the unpredictability of pay as you go payments. And, it allows the customers to budget a bit better. 12 months might work better in the south where lcos work through the winter months.

Thanks for the replies.