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View Full Version : Toss Commercial Accounts!


Acute Cut
02-27-2004, 11:29 AM
OK, radical thoughts. I know this may be a locality thing, so bear with me here.

Most of the guys i know around here that mow do commercial properties too. Some only do commercial. They have told me what they make and it rather surprises me. I know one contract for a leading grocery store in our area (very high end as far as grocery stores go) gets like 1200 a month. It takes a three person crew like 4-7 hours per week there. It has alot of bushes and beds. So, you gotta do the numbers and wonder "why".

I make as much and/or more doing just residentials. And i get a whole LOT less hassles.

I know not EVERY commercial is like that. But 75% around here are. Strip malls, main mall, all store fronts on main streets. The only half way decent payers are the big factories. (oil and aluminum) And even they are getting cheap. I have a couple easy commercials that pay ok. Not great, but ok. Am i missing something guys?

mow2nd
02-27-2004, 11:40 AM
I dont do commercial because of 2 reasons.

1) Most commercials are not Loyal, you can do good work for the year and they still find another service.........too cut throat.

2) Commercials look at the bottom line.......Price

Residential customers are loyal and if you give them a good service they will stay with you for years to come. Do good work for them, and price doesnt matter

LawnSmith
02-27-2004, 01:39 PM
commerical pays year round and has the potential to make good money with extras(flowers, pruning, snow/ice management, mulching, etc.).

ParkerLawn
02-27-2004, 01:49 PM
I am glad to hear someone with same outlook on this subject. Commercial work around here is so competitive that people are doing the work for nothing. Granted there are some commercial accounts people do very well with but it is going towards the bottom line and it just isn't worth it. I have geared my work towards residential and having a full service contract with them for flowers, mulching, etc to compensate. I make double the profit on residential accounts than commercial because of how low people bid just to get the job. Anymore I put my bid in for it is worth to me and if they go elsewhere because of price it is no loss to me. I know some people who just beg for commercail jobs just so they can say that they are doing big commercail jobs but how impressive is it if I make double your profit on a residential account and work a 3rd of the time?

MacLawnCo
02-27-2004, 01:52 PM
Very good point. Look at all the recent posts asking how to land commercial accounts... newbies see guys "sitting on ztrs and making loads of money" and once they go get "one of them there cool toys" your market is nearly toast.

Avery
02-27-2004, 02:01 PM
Just the opposite here. Commerical customers are more quality minded. They are also more loyal. Most of mine are on a 3 year contract with fuel and annual increase clause. On the other hand residentials are looking for the lowest bid and are a major PITA. Always wanting extras for free. We stopped doing residential several years ago. I do not like my day to consist of mow-load-mow-load-mow-load. I like a project that is large enough to take several hours if not more.

chevyman1
02-27-2004, 02:14 PM
Maclawn dude, K-Love? time to pick a new station buddy, haha. Seriously though, you have nothing to worry about newbies unless you yourself have flaws in terms of dealing with commerical accounts. You have to be a professional in order to speak with the right people, to become a registered vendor, to work with procurement agents, etc.

cush
02-27-2004, 02:38 PM
If you go commercial you must build a lasting relationship with the decision maker. Also many companies have been burnt with poor service and will see the value in quality service, sooner or later things will even out because Lawn care pros will go where ever they can make the most profit.

tiedeman
02-27-2004, 03:04 PM
I have never liked commerical. Most of my commerical accounts are a result of doing the owners residential property.

ParkerLawn
02-27-2004, 03:33 PM
It all depends on your area. Like I said earlier, some commercial properties are great for people but around here, people just bid them to death. I do mainly high end residential accounts and have all of them setup doing their lawn service, fertilization, landscaping and maximize my profits on my existing customers. I have a customer who allows me to do whatever is needed or will improve their property, because they trust me and we have a great business relationship. I did a job for them last year for a party they were having and the end bill was $25,000, so I am only saying that I have the option to pick and choose my customers now and take on accounts like this. I see alot of guys wanting more work and more accounts but I disagree with alot of that. My reasoning is, you should always maximize profits and services for your current customers before taking on more customers. This may be unclear to some but most will understand where I am coming from. Look at your current customer base for more profit before looking into more accounts.

Camelot Gardens Uk
02-27-2004, 05:24 PM
My Commercial account tossed me! Local acount for fast chicken! Shut down 2 days ago for refit, went past the site today, nothing left. However the good news is it's reopening in 5 Months! going from 15 car to 70 car spaces and new building.

Manager has given me home phone no to keep in touch...wants to discuss maintenance on new installation.

Hope I can wait that long...

NCSULandscaper
02-27-2004, 05:50 PM
Im going through a little situation that relates to this. Except i have the commercial account, and the owners residential account. Went by to renew my contracts and they said that i had the best service they have ever had before, but the price seemed high. So they are getting other bids on these properties and will get back with me. So in the end its price over quality. Ill know within a week if i get it again or not.

promower
02-27-2004, 05:51 PM
If you can get your hourly rate, commercials are nice when running crews. You have less travel time for employees. Larger ones that bring in $2000+ are nice to because your billing one place for a good sum of money rather then several residentials for the same amount. Theres pro's and con's I agree with both points of view.

bastalker
02-27-2004, 06:26 PM
Originally posted by ParkerLawn
I did a job for them last year for a party they were having and the end bill was $25,000.

Did ya build an addition to there house???;) :D

Commercials are alright, but like some of the others have said, they are bid to death up here. Looking at the price, not quality. It simply means more money in the companies pocket at the end of the year. For the most part, they dont live there, so it doesn't really matter. The bonus in thier pocket at the end of the year does.

I pretty much stay away from them. I have bid several, and wind up shaking my head after seeing some of the winning bids.

I am to a point now, where I dont need them. I have a little over 80 accounts, 2 smaller commercials. Fifty percent of my residentials are high end, an I am looking to increase that percentage in the next few years, an drop the low end residentials. The more high end residentials I pick up the lower my residential accounts will become. I have found that the people who own the high end residentails are loyal if you treat em right, an really go out of your way to make there place stand out from the rest.....

gramps
02-27-2004, 06:40 PM
Originally posted by NCSULandscaper
Im going through a little situation that relates to this. Except i have the commercial account, and the owners residential account. Went by to renew my contracts and they said that i had the best service they have ever had before, but the price seemed high. So they are getting other bids on these properties and will get back with me. So in the end its price over quality. Ill know within a week if i get it again or not.
What an ass. Offer to drop your service and quality, cut out a few things then lower the price. Wait. People like that really burn me. Tell him to kiss your ,what ever . let him find the cheaper price. It is out there.:angry: :angry:

Critical Care
02-27-2004, 07:00 PM
Ditto to NCSU's comment. I'm going through the very same situation, and it ticks me off as well. Quite likely these people will get what they bargained for. There are however a number of residential clients that exhibit the same behavior, but on the average it seems that commercial accounts are less personal and are all to willing to dump you for a better deal.

Acute Cut
02-28-2004, 02:16 AM
Guys, you gotta relax. So what, let them go. we all know the rules, lose one gain two better ones. Remember that one? SO you lost a great account, im jealous of what you got coming if the rule holds true.:D

ALso, so what, who cares. Why do you do the job? For the money? NO!?!?!?! Hmmmmm. I hear yall talking about doing this job for so many reasons and i have heard "for the money" very rarely. Keep a focus on the fact that you got the greatest job in the world.

(Well, other than a bikini model sun tan lotion oiler)

Jackman
02-28-2004, 08:07 AM
I have 45 residentials and 3 commercial accounts I had other commercials but they went the low bid route, one real estate agency just gave so much grief that it was not worth it. I like the loyalty that the residential accounts give me, the only advatage I see to commercial accounts is you can cut at first light or just before dark I can't do that in a neighborhood too much noise..

mtdman
02-29-2004, 11:40 AM
Originally posted by mow2nd
I dont do commercial because of 2 reasons.

1) Most commercials are not Loyal, you can do good work for the year and they still find another service.........too cut throat.

2) Commercials look at the bottom line.......Price

Residential customers are loyal and if you give them a good service they will stay with you for years to come. Do good work for them, and price doesnt matter

What he said. I don't even bother to bid commercial properties. I'm not looking for price shoppers, I'm looking for customers who want quality and are willing to pay for it. Commerical props don't fit that.

Not to mention, commercial props are often not cared for. No irrigation, no fertilizing, etc. If it burns out, the business sees that as saving money by not needing a cut.

No thanks.

craigs lawncare
02-29-2004, 11:59 AM
Originally posted by Avery
Just the opposite here. Commerical customers are more quality minded. They are also more loyal. Most of mine are on a 3 year contract with fuel and annual increase clause. On the other hand residentials are looking for the lowest bid and are a major PITA. Always wanting extras for free. We stopped doing residential several years ago. I do not like my day to consist of mow-load-mow-load-mow-load. I like a project that is large enough to take several hours if not more.

I agree with Avery on this one.
I am sure it depends on the situation but my commercial accounts have the attitude of, "I don't care what it costs... just get it taken care of." My residentials are definitely more price conscious. For the most part, I am pretty lucky, I have great customers.

Craig :)

Pecker
02-29-2004, 12:50 PM
Looks like a pretty subjective topic. Also, depends on how overbid an area is. I dunno about you guys, but I just ain't willin' to work for minimum wage when I own the business. I bid my lowest price, then it is take it or leave it. My bottom dollar price includes my best quality of work. I won't work for less, because then it is not fair to me when they get the same quailty of work from me no matter what the price. Don't work yourself to death for nothin'.

cowcutter
03-04-2004, 12:22 AM
I have two thirds comm. and im trying to get more residential . Most comm. accounts turn over managers often, therfore theirs no loyalty, I have been let go more than 2 times by under bidders. Every time I was told my service was awesome , but they had to do the numbers game.Here is the reason I prefer, now, the smaller comm. accounts and residentials over the big ones.If you lose a big account, that could be a whole days work,hard to replace, lose 1 or 2 small ones , so what.