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bobbygedd
12-18-2004, 09:51 PM
i was chatting with a very well respected member the other day, we were discussing being pre paid for work. he said, that being honest, his biggest concern with being pre paid, would be his lack of motivation to actually do the work, considering he already had thier money. example: you have 20 lawns to cut today. you are running behind. you know you can't make the 20 cuts, will you skip the clients that prepaid, and get to them another day? or would they take priority, because they pre paid?

lawnwizards
12-18-2004, 09:59 PM
thats a good question. were still small right now. a couple of times we've had a customer pay a few weeks ahead and when it came time to cut for them, it felt as though we were working for nothing. i'd rather stick to billing...

Tn Lawn Man
12-18-2004, 10:07 PM
For me prepays would get priority.

However, next season I am going to start to implement a different billing system. Credit cards and paypal for residentials. If they don't want to do that then it will be a prepay system only. I refuse to chase money anymore.

kickin sum grass
12-18-2004, 10:48 PM
I can relate. This is my first year I have offered pre-pay. It does feel like you are working for nothing.
But on the other hand, it should not be a matter of priority when the job gets done. You need to keep to your schedule and if there are going to be jobs you did not get done that day then so be it. Don't go out of your way to complete a pre-pay or not complete a pre-pay customer. Just keep it real.

1MajorTom
12-18-2004, 10:54 PM
Mr. Gedd raises a good question, and I'm pleasantly surprised to hear that respected members do talk to him.
Even the most well organized business will fall behind a day or two due to rain especially in the spring. And when behind, it sure would be tempting to skip the prepay ones and work on catching up the ones that were billed monthly. So I definitely could see this being a problem.

mtdman
12-19-2004, 12:03 AM
I get an extensive amount of prepay customers. I try to treat them no differently than regularly billed customers. It's rare that I get far enough behind that I have to consider skipping customers. When I do, usually what comes to mind when deciding who to skip is how fast the lawn grows, etc. But prepays do enter the equation. Especially at the end of the month, you sometimes want to get the billed customers in before the month ends. I have found, the longer I've had the prepay option, and next year will be the 5th season with prepay, the less I consider skipping them or putting off their work. In fact, I made an extra effort to get in more work at the end of the season to complete all the prepay agreements.

It does suck to get to the end of the year to leaf season and have work left to do that's already been paid for, work you aren't getting any more money for. But if you work things right, put the money away, be smart, prepay is a great option. I love it, and will continue to push it as an payment option.

lawnguyland
12-19-2004, 12:44 AM
I like to do pre-pay for spring clean-ups only at a small discount to jump start cash flow mid winter. I don't want anything else prepaid for fear of not being able to fulfull my obligation for whatever reason and then owing all those people money. That would bite hairy moose nuts.

Envy Lawn Service
12-19-2004, 01:41 AM
i was chatting with a very well respected member the other day, we were discussing being pre paid for work. he said, that being honest, his biggest concern with being pre paid, would be his lack of motivation to actually do the work, considering he already had thier money. example: you have 20 lawns to cut today. you are running behind. you know you can't make the 20 cuts, will you skip the clients that prepaid, and get to them another day? or would they take priority, because they pre paid?
It's called obligation and that should be plenty of motivation. If not, then you are the PITA and you don't deserve pre-pay. Go chase the slow payers.

Now, as far as priority goes, it would depend on a lot of things. If I knew for some reason I wasn't going to be able to get the 20 cuts in and no extra factors were involved, priority would be set by whatever order I needed to do them in order to get caught up the fastest. By geography or time of day sensitivity.

If other factors are involved I adjust accordingly.

Kelly's Landscaping
12-19-2004, 01:59 AM
I don't even like deposits it feels like your working for free. Sure you are getting paid the same but if you already were paid I find little motivation to do the work so for me I avoid the temptation.

B&B Lndscpng & Lwn Srvc
12-19-2004, 02:54 AM
I put priority on the ones that prepaid so it doesn't look bad the company. I wouldn't want any customer to think bad of me if i didn't show up after they pre paid.

Envy Lawn Service
12-19-2004, 03:35 AM
I don't even like deposits it feels like your working for free. Sure you are getting paid the same but if you already were paid I find little motivation to do the work so for me I avoid the temptation.
There's nothing at all wrong with those feelings or those tactics. I say whatever motivates you. Basically you need to be motivated to earn and want to recieve something tangible in return. I on the other hand would rather earn my keep and strive to remain worthly of the money I have recieved.

Soupy
12-19-2004, 06:30 AM
I have mixed emotions about prepay. Monthly prepay would be good because you don't have to chase money but that last month of the year would be less motivating.

Yearly prepay can be a real disaster if you don't know how to handle money. Which most of us americans don't know how to do. Plus you have that motivation problem again.

I say only use yearly prepay if you are well conditioned money wise and when you need startup money and don't want to borrow it.

I like the 12 month billing method myself. But like Yearly prepays, the customer is going to expect a certain amount of work from you because you are billing them a flat rate.

With any of the above methods. You will get complaints from customers when you have to skip them. The good ones will understand but not everyone will.

YardPro
12-19-2004, 08:31 AM
i agree with booby
i don't like the idea of pre pay either.
it would be too easy to skip that account.

jeffex
12-19-2004, 09:00 AM
I can see your point about feeling like your working for nothing. It takes a well deciplined person who is honest and trustworthy to make this work. Its not for everyone. I wouldn't try this approach unless I had a good record with my customers. It could also create problems come drought time. I would still show up and do some kind of property maintenance during realy dry spells. The worst # of cuts for a season in my area was 16 where a normal year is 23 cuts. This year was exceptional and above 23 cuts. I can see where the temptation is to chase new money since their money is in your pocket already though. I do enjoy the chase for profit and it is a great motivator.

rodfather
12-19-2004, 09:17 AM
Only prepay/deposit I will accept is for materials only...and even that is rare.

Shawns Lawns
12-19-2004, 11:06 AM
I Don't require any of my customers to prepay. Some of them do it on there own by paying in advance by the month. Also i have some the travel and when they are not going to be home they will pay in advance. It does not bother me one way or another since some of the prepays are next door to non prepays. :cool:

Gene $immons
12-19-2004, 11:18 AM
I offered a small discount one year if a customer would pre-pay for 10 cuts at the beginning of the season. I did all the cuts on time, but I hated that 10 weeks. I won't ever offer that again.

I sometimes offer a deal on pre-pay for fertilizing, but not mowing.

coastallandscapesolutions
12-19-2004, 01:15 PM
Bravo Bobby. Awesome topic.

I have been tossing the idea around for two years with pre-pay. I even have had some customers offer to pre-pay so they don't have to worry about billing and sending a check each month. I finely decided that there would be to much temptation to "skip" something as you mentioned when running behind or otherwise. So I decided that I would not accept pre-pays.

The alternative we use is we offer to set the customer up on a monthly credit card billing via Intuit/Quickbooks. It has been very well received and I can say now that every residential customer we have on a full service annual contract is now automatically billed and paid in one fell swoop. All I do is click one place, their invoice is created, emailed to them and their payments are downloaded automatically into Qucikbooks. One click! It takes less then 5 seconds and I bill and collect on 271 accounts. The time that this has saved can't be counted (actually is can, I can play one more game of golf a week :p ).

As a footnote, we are working on moving some of our business clients over on the system too. We are getting set up for paperless checks which can be billed the same way.

Our goal is to have 70% of our maintenance business set up with auto pay by the end of 2005. If we can do this then it will reduce our payroll because Patty will have to spend less time billing and more time on something else.

mtdman
12-19-2004, 06:21 PM
I've got about 25 or so customers that prepay the season, they get a 10% discount. That brings me $10 to $15 grand up front in April. Put that money away, keep it in your bank and earn money on it. I LOVE it. It's the greatest thing I ever did. I have cut my billing time down, and billing expenses. And the customers love it as well. I've never had a complaint about prepay or not getting all the work done. I have had years where it's been dry/wet and all the work didn't get done. In those cases I offer a refund or extra services to make up. Never had to give back $$.

Working for free? NAH! I've already been paid and the $$ are in the bank.

:rolleyes:

fastpitcher
12-19-2004, 06:37 PM
I do not want any customer to pre pay. I bill at the end of the month after the work is completed. There is very few industries that ask a customer to pre pay. In fact this is the only one I have herd of doing this. But, there must be others. I just think it un-professional to ecept money before the customer got somthing.

muddstopper
12-19-2004, 07:24 PM
I have always resisted accepting any money up front. After a few experiences this year I am reconsidering my position. Doing hydroseeding involves a lot of upfront expenses that you wouldnt experience with mowing services. After taking on several bigger seeding jobs this year I ended up with little money in the bank and waiting on my money for the jobs. This usually isnt a problem but these bigger jobs where back to back. Everybody paid but, using up inventory without money to replace those inventories creates problems that I dont like to see. I am considering next year requireing deposits to cover materials before work starts. At least on the bigger jobs anyways.

the scaper
12-19-2004, 08:06 PM
I dont sell pre-pay, but I do have a few customers who send advance payments. I like to make them priority within reason according to my schedule. That way I get it out of the way (good for me), and at the same time kinda reward them for the pre-pay. The way I see it, the sooner I get my money the sooner I can start drawing interest on it!

tailoredlook
12-19-2004, 09:40 PM
I prioritize the pre pays first. Otherwise isn't that stealing?

Soupy
12-20-2004, 02:33 AM
Ok, I only had 5 prepays this year. Well I figured I was just about done and figured I was done with my prepays because I did put them first on clean-ups.

Well today I get a call from one of them asking me when I was going to be back out. I explained that I was just there 10 days ago and that we cleaned the gutters and removed the leaves. He said that he knew that, but he has a few leaves in the front and he thought that was part of his contract. I told him I would be out tomorrow to clean up his lawn.

I just hope he doesn't think I am going to come every week of the year to pick up a few leaves that blow around the neighborhood.

Just to let everyone know, this guy has been a long time customer. Until this year he always paid weekly. I actually raised his price by $5 per week and I did skip him a few times because of weather conditions. . So it's not like I'm losing money on him, but come on, a few leaves!

HOOLIE
12-20-2004, 02:46 AM
Ok, I only had 5 prepays this year. Well I figured I was just about done and figured I was done with my prepays because I did put them first on clean-ups.

Well today I get a call from one of them asking me when I was going to be back out. I explained that I was just there 10 days ago and that we cleaned the gutters and removed the leaves. He said that he knew that, but he has a few leaves in the front and he thought that was part of his contract. I told him I would be out tomorrow to clean up his lawn.

I just hope he doesn't think I am going to come every week of the year to pick up a few leaves that blow around the neighborhood.

Just to let everyone know, this guy has been a long time customer. Until this year he always paid weekly. I actually raised his price by $5 per week and I did skip him a few times because of weather conditions. . So it's not like I'm losing money on him, but come on, a few leaves!

Nothing wrong with that, you have to look at it as how much does it cost you to advertise to gain a new customer. Sometimes better to spend an hour taking care of a customer than spending money to replace a disgruntled customer. I look at the pre-pays as people that are investing in my business, they pay me up-front at a time when I can use the money. I only have 3, but they are all great customers and good people.

Soupy
12-20-2004, 03:14 AM
Nothing wrong with that, you have to look at it as how much does it cost you to advertise to gain a new customer. Sometimes better to spend an hour taking care of a customer than spending money to replace a disgruntled customer. I look at the pre-pays as people that are investing in my business, they pay me up-front at a time when I can use the money. I only have 3, but they are all great customers and good people.

Yea, but when this guy was a weekly customer he would have cut me off weeks ago. It just shows how prepay customers will expect more. I thought at 16 degrees temp. It was time to call it quits and just wait untill March to arrive.

HOOLIE
12-20-2004, 03:24 AM
Well, Soupy, only you can tell if the guys working you or not. Maybe next year sell him on an "all-inclusive" package, with the necessary mark-up to account for these unscheduled trips to his house. I guess its natural to think (as a customer) that you'll get a little more for paying up-front. Don't lose any sleep over this one, you'll have him in 2005 for sure to make some money off of.

Soupy
12-20-2004, 03:35 AM
Well, Soupy, only you can tell if the guys working you or not. Maybe next year sell him on an "all-inclusive" package, with the necessary mark-up to account for these unscheduled trips to his house. I guess its natural to think (as a customer) that you'll get a little more for paying up-front. Don't lose any sleep over this one, you'll have him in 2005 for sure to make some money off of.

No, I don't think he is taking me at all. He does purchase upsells. I was just trying to give some guys asking a taste of what to expect. This guy usually wouldn't care about a few leaves, but I guess he feels he needs to get his money worth.

The whole reason I tried prepay and 12 month contracts out was to make up for lost work during long periods of rain. (You know, like hey I have a place in my schedule for you and we need to get paid every week even if it rains because next week will be more work) I'm finding out that some customers won't let this fly. I also had another customer ask me to start detailing the # of visits on her invoice. Well becasue of more rain then usual, I had to let her slied on her december bill. Like mentioned before, I did get paid for the work, but I didn't get paid for lost work and that was the plan.

Richard Martin
12-20-2004, 04:26 AM
I will accept prepay but it isn't something I go looking for. I do have a couple of customers who prepay and those servicings get done the same as any other. I don't feel as though I am working for nothing.

I have been paid a lot of different ways in my 46 years. Hourly, salary, weekly, bi-weekly, 30, 60 and 90 days. Prepaid is just another way of being paid and as long as I get my money I don't care.

mtdman
12-20-2004, 04:41 AM
I LOVE prepays. People want to be paid up for the season and not worry about monthly billing. They trust me, I get my money up front, and it's sitting in the bank for 6 months. What is not to like about it? And it's a payment option, not a requirement. I don't ask anyone to do it, they ask me. If I could get ALL my customers prepaid, I'd be a happy man.

If you had a regular job, and the boss offered to pay you up front your entire salary for the year, would you turn it down? I sure as hell wouldn't.

:D

gogetter
02-04-2005, 01:26 AM
And when behind, it sure would be tempting to skip the prepay ones and work on catching up the ones that were billed monthly. So I definitely could see this being a problem.

It's funny, I would actually feel the exact opposite Jodi. I would feel like they've already paid me, so I would feel more obligated to get them done. Whereas the others haven't paid me yet, so they can wait.

But really, all the things that others have mentioned would come into play as well, location, growth rate, is the customer picky or laid back, etc.

But the fact that someone pre-paid would definitely put them closer to the top of the list for me.

I'm thinking about offering it this year to get a little headstart money. It's not something I'd want to have all my customer on, but a select few could work out good. I need some up front money for an advertising push I'm doing this spring, as well as towards some equipment.


So any further input or experiences are welcome.

Lawn-Scapes
02-04-2005, 02:15 AM
I feel the same as Jonathan. If they prepaid.. I'd want to make sure they were the ones that were taken care of first.

Now.. if it was at a point in the season where the grass wasn't growing much and I was going to skip someone.. it would be the prepays and not the monthly or per cut clients. :)

richard coffman
02-04-2005, 02:39 AM
i can't trust a dollar that i haven't earned first. I'll have a customer pay me the day I'm on there lawn or leave a payment for me, but that's as close as I'll go to that. i sure don't want to worry about me being behind on customers.

Respectfully,

Richard/Owner
salt lake city, Utah

olderthandirt
02-04-2005, 05:53 AM
Prepay, with a peneltys on the customers part.
#1- 10% non refundable if they cancell for any reason.
#2 - They get what they pay for. Nothing more, nothing less.
#3 -They must have it in writing that weather will dictate the scheldule, so don't cry if scheldule stop is not made becouse of weather conditions.
Prepay can work for both parties as long as the customer knows that prepay does not "buy him any favors, and the contractor knows he obligated the same as if he was not prepaid. Money is the motivating factor for both parties, and it can become difficult to reach an understanding.

Mac

crawdad
02-04-2005, 06:40 AM
Mr. Gedd raises a good question, and I'm pleasantly surprised to hear that respected members do talk to him.
Even the most well organized business will fall behind a day or two due to rain especially in the spring. And when behind, it sure would be tempting to skip the prepay ones and work on catching up the ones that were billed monthly. So I definitely could see this being a problem.

Why, may I ask, would it be tempting to skip your best customers? If you are broke, and need to bang on the door and demand cash, then I can see why you would go to the non-prepays first. I bill monthly, for most of my clientel, and run my route in a particular order.I do them in this order to be more efficient, why change it?
If I'm behind, and need to shuffle customers around to make up for it, the ones to get shuffled to the bottom of the list would be slow pays and every other weekers.
Crawdad