View Full Version : How To Get Year round contracts
08-22-2004, 10:38 PM
Could someone please be so kind as to explain to me how I go about signing customers up on year round contracts and also how I go about explaining it to them so that they do not get scared off by the contract, thank you and also I need to know how to estimate it or pro-rate it thanks alot guys
08-22-2004, 11:08 PM
Our year rounds are all-inclusive. Mulch/weed control/pruning/mowing/irrigation maintenance/etc....
Not really hard to sell a contract like this. Just ask the customer "Do you want your property to look nice year round or just during the growing season?" Also saves them money on spring clean up as you are servicing the account year round.
08-22-2004, 11:20 PM
Avery has a good point. But some people are too cheap or like to do the "more exciting parts" to go that route.
I don't offer anything but yearly contracts. I walk the property with the client. Talking to them about what they want. Building trust.
Then I fill out my estimate form. Then I review it for them. I cover what I do, how often (all written on the contract), what I don't do for this price, their options for added services. THEN I offer them the choice of their monthly payment being due on the 1st or the 15th of every month.
My usual protest is what if I decide to quit before a year. My response. You will notice right here it says that you may stop service at any time for any reason with a 30 day written notice.
Then I give them the example of selling the house. Of course you wouldn't pay me once the new owners have the house, but you would know that someone is buying at least 30 days before closing so that should be easy, right.
Then they sign up.
08-23-2004, 12:58 AM
Same thing here as Precision, except I have to include snowfall.
It's not that hard being solo, since I base my rates on (18) 3" snowfalls, and if I for some reason go over, or say, have 5 days in 10 that I have to plow, I don't blow my budget out of the water with too much overhead in wages, I'm just out the extra diesel fuel.
It's nice the months where we don't get any snow.
2 years ago I had 3 months in a row where it didn't snow, yet I still got all my checks.
I tell people if they want the snow plowed, or grass cut exactly when they want it done, they're going to have to support me. I'm basically a personal gardener for 38 commercial accounts.
08-23-2004, 01:51 AM
Ok so now someone please tell me---Here is an example ( I have a customer who pays $45.00 per week) so how would I pro-rate that or figure that into a year round contract ? would he pay $45.00 a week in january also or how does that work---and thanks guys
08-23-2004, 01:53 AM
Firstclass, I think it depends a LOT on the demographics of your area. At least in my area, I find very few folks who want a "year round service" I've got one customer so far to sign up for " the whole package " After lots of trial and error, It semms to me ( at least partially ) that the average homeowner around here just want's the grass cut, and not much more. Until I can move, I'm just planning to market other services during the winter time... Hope fully, soon, i will me expanding into some much more promissing areas, with LOTS of new homes being built.. the majority of which are irrigated as well!!
08-23-2004, 01:58 AM
I'm sure they will correct me if I'm wrong, but I believe that most LCO's here ( on a contract program ) are charging the customer on a monthly cycle, and charging the same amount Jan-Dec making up the difference in "labor?" by doing shrubs, leaf removal, and in the case of the Northerners, Snow plowing.. That way they are getting year round income. So far, very few folks have gone for that ploy locally, hence one of the many reason's I NEED to move to a more lucrative market....:)
08-23-2004, 02:14 AM
Well I will tell you that I know a guy named shane farrar with shanes lawn inc that has all his customers on year round but we do not speak so he would not tell me jack crap----so I know its possible, I just need to know all the specs on how to do it and how to charge/ or calculate it
08-23-2004, 08:58 AM
$45 x cuts per year / 12 months
$45 x cuts per year + hedge trimming + fert + mulch / 12 months
08-23-2004, 09:55 AM
Well I think year-round contracts sound neat because you get paid every month but....really......you're not getting paid even one dime more. Just learn to save as much as you can in the growing months. It will all work out the same in the end....and save you alot of headaches.
08-23-2004, 09:57 AM
Ok this is how I figure it and this is what I tell them. I live in Ga. Year round service equals about 35 cuts a year. Take your 45 dollars and multiply it by 35. 35 visits x $45=$1575 a year and divide that by 12 months. $1575 divided by 12 months = 131.25 a month. I have a chart on the back of my contract that tells the cust. how many times I come out every month of course May thru Sept it is every week ,Oct is 2 to 3 times november is 2 times Dec thru Feb it is 1 time a month March and April is 2-3 times a month. Now to sell them on this I explain that if I come out once a week at $45 a cut it would cost them $180 a month but with a 1 year agreement I can do it for $131.25 a month and if they want bushes pruned it would be 5 to 10 dollars extra a month depending on how many and how often they need to be done. Now you have to explain to them that there still paying $45 a cut but the cost is spread out over a 12 month period . Also I like to use the word AGREEMENT instead of contract. Contract is such an ugly word and yes it does scare people off I have had a lot of good luck with this.
08-23-2004, 10:50 AM
Yep, just try to figure in everything that you're going to do in that 12 months. Don't specify how much any one item is, don't itemize your bid, just find out what the customer wants done over a period of 12 months.
Add it all together, and divide by 12. Anything extra, such as a tree blown down in a storm, a bush that dies and needs to be replaced, extra fertilizing or weed control, can all be added as a charge on the month that the work is to be done.
If you sell it as a way that the payment will be lower and a FIXED cost payment, most people will go that way. This way they know they are paying, using jbell's example, $130 / month instead of $180 / month.
Alot of people will see that as an extra $50 / month cash flow.
If it's a FIXED cost, meaning each month they figure into the house budget, business budget, whatever, they know grass cutting is $130 / month, not $180 one month, then $160 one month, then $50 another month, whatever.
08-23-2004, 11:55 AM
Yep, call it a "Budget Agreement".... and for the reasons LwnmwrMan22 gave.
08-23-2004, 05:01 PM
Thank you very very much Jbell and lwnmowerman
08-23-2004, 06:01 PM
I wonder if some customers catch on that if they just pay 45 dollars a cut during the cutting season they will spend around 1400 dollars versus 1800 a year if they go with a year around contract. I know that 150 a month sounds cheaper that 180 a month, but 180 a month is cheaper paying 8 months out of the year than 150 12 months a year.
08-23-2004, 06:41 PM
Well with a little fast talk and an honest face hopefully u can get a signature b4 they realize that.LOL
08-23-2004, 06:50 PM
Labrodor summed up the very reason I haven't gotten many to sign... People aren't stupid, they're cheap.
08-23-2004, 11:33 PM
people are cheap, but if you do it by the number of cuts it is the same money.
We have +/- 42 yearly cuts. Call it $45 per cut.
42 x $45 = $1890 / 12 = $157.50 so they pay $157.50 monthly do it by the mow and some months like july pay $180 or December pay $90.
The difference (to us) is that if they start in the slow growth months we are getting paid in advance. They take the risk. If they start in the growing season, we are getting paid in arrears. We take the risk. But if you do it properly they pay the same at the end of 12 months.
The thing isn't to extend your peak mow price X 12 months. Obviously most people can figure that out.
08-24-2004, 09:41 AM
Precision - Your post is where i have the biggest concern. Because you could get some year rounds at the beggining of the year. Then at the end they say they no longer need service and you are screwed for giving them a cheaper service all year.
I have some year rounds, but i do worry about that. Some customers may start off with that in mind in the first place just to get cheaper service when they need it.
08-25-2004, 01:38 AM
exactly, so how do you know your not going to get screwed ?
Mikes Lawn Landscape
08-25-2004, 09:00 AM
Originally posted by Firstclasslawn
exactly, so how do you know your not going to get screwed ?
You can require a Credit Card on file or a two month deposit.
08-25-2004, 04:24 PM
Ok but a 2 month deposit wouldnt cover it if they drop u in the winter, also if I dont have a credit card machine then how can I use a credit card number, im asking so that I can learn not disputing what you said
08-25-2004, 05:17 PM
Anyone know a LCO in the north that does yearly contracts? Right now I don't have a plow so I really wouldn't be doing any work in the winter. I like the thought though of get a monthly check all year round. I suppose it would be a little cheeper for the cust every month, plus it would help me out during the off season.
08-25-2004, 10:16 PM
ok, this business is all about reading the people you are working for. YOu don't know that you won't get screwed. But you never do.
Lets say you mow from May to Sept. Lets call that 20 mows. So on a weekly pay (at $50) that is $1000. If it is monthly and you have 36 mows yearly You got paid $750 ($150 per month). Personally, I get paid in advance (1 month) and I require 30 days written notice to cancel so that helps. Put a clause that says all off season cancelations lose their free month after terminating early. Paid in advance, so now your $250 loss is down to $100 and you didn't do a months work. You just have to keep them paid up.
the other thing is, say 5% or your people do that it is no biggie cause it will balance out by the 5% who start in the slow season.
For those of you with a dead season just make it 7 months or whatever your season is, or include snow. Here we mow all year round. The only white stuff goes in peoples noses and costs a lot more than $150 per month.
08-25-2004, 11:04 PM
Yep, if you don't put plowing in it, and you're not mowing in the winter, there's no way you can afford to have a yearly contract.
All you're doing then is allowing your customer to make money with your money.
What I mean by this is, you have to get paid for the time that you're working, whether it's 6 months, 7 months, 8 months, 12 months, in the same amount time.
If you're going to do a yearly contract, and you're only using your mowing income to do so, then you're basically getting paid 1/2 of what you'd normally make.
Instead of worrying about getting a check in the winter that way, you'd be better off to get paid in whole to begin with, then take 1/2 of everything you make and stick it into a CD for 6 months, or a savings account that'll get you about .5% interest, but at least your customers don't have a chance to go broke in the middle of winter.
It's kinda like working for someone and the government takes your money, makes all the interest for 4-5-6-7-8 months on everyone's money, and then gives it back to you.
The right thing to do money wise is to end up owing a little money at the end of the year, then you know you've made the best use of your own money.
Sorry about the rambling.
vBulletin® v3.8.6, Copyright ©2000-2013, Jelsoft Enterprises Ltd.