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  #11  
Old 02-15-2000, 06:35 PM
lawrence stone's Avatar
lawrence stone lawrence stone is offline
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Location: anthracite valley, commonwealth of pennsylvania Winter residence: Charlotte County FLA
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Actually fireball I am not going to increase my individual prices from last year.<p>They still have to buy the aeration, dethatching, spring clean up, 5 step lawn,<br>3 step tree and shrub.<p>Here is the part of my actual contract I have<br>not told the group. I DEMAND to be paid up<br>front for my services. Even on any new commercial accounts. Here is the tag line<br>cut from one of my proposals:<p>The cost to provide all of the above services including providing all equipment, labor, fuel, fertilizers,<br>and herbicides is $13,568.00 including 6% PA sales tax which is payable in eight (8) equal installments<br>of $1696.00 to be paid on or before the first of each month from April 2000 through November 2000<p>If the check does not show up in my P.O. Box<br>by the first of the month I will suspend services until it arrives.<p> You see in my world it's my way or the highway. When you only market your services to newer $250k an up<br>homesites that equals $500k an up homesites<br>in the metro tri state or Phila burbs you<br>will have effectivly shut out all the &quot;lawn<br>cutters&quot; so they will have a hard time finding another company that can duplicate my services at my pricing levels.<p>I have 5 gear drive toro walk behinds (one 62, 2-52, and 2-44) that I have less than<br>10K invested into all those units. I have <br>a pesticide application vehicle (jrco spreader two 15 gal 12v spray tanks)I made from a 44&quot; walk behind that I paid $200 for with a blown engine. All are bought and paid for. If my present accounts don't like it they will be replaced by a new account with<br>higher gross profit margin.<p>Let them eat cake.
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  #12  
Old 02-15-2000, 06:49 PM
SLSNursery SLSNursery is offline
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Join Date: Dec 1999
Location: West Haven, CT
Posts: 442
Interesting approach Larry, but I have some input, if you haven't sealed and stamped them yet. We offer all customers an agreement each spring. The only customers we retain for mowing only (only a handful) are irrigated and don't miss cuts except in severe cases like last summer - they were at 26-28 instead of 30 visits. <p>It is not the customers problem that we may have a drought, and God, although he controls the weather, doesn't pay the mortgage. And, while I fully understand your reasoning, and the list provided by fireball, none of those items are relevant either. If you need to explain all that to your customer, then you need to step back, take a deep breath, and change direction. I have found that coddling residential accounts is detrimental to your health. IMHO, as soon as you or any other operator on this forum starts to handle them like commercial accounts (in a professional manner, without a laundry list of reasons for a price increase), I can almost guarantee you will have 1. a better customer base, 2. more gross revenue with less low barriers to entry work, 3. less wear and tear on your equipment. When we started to offer yearly or monthly payment plans about 5 years ago, I researched my lawn work, and studied the frequency of visits over several years. I determined that excessive rainfall was just as bad, if not worse (because of the stress and mad spring rush) than a drought. So, I figured that having an accurate price on all services was essential, i.e. - do not offer any loss leaders, don't try to make money back on the cleanups, etc. Price each service fairly, lump them together and divide it out over the 8 months or so. Then, for pre-payment in full for the season, we offer a 5% discount. Now, in most cases, we don't show how many visits are expected, or when they will be. I found that the more info you supply the customer, the harder it is to adjust to the weather, and the more opportunities each customer has to make you deviate from a standard plan of attack. What if for some reason out of your control you can't stick exactly to your schedule as laid out? If you were on the receiving end of this sort of arrangement I bet you would be checking off the days on a calendar. We also do not insist that they select the equal monthly payment option. For those customers who choose to pay as they go, we have screened them out to make sure they will provide us with some sort of work, drought or not, and their per cut price has already been calculated as accurate - with or without rainfall. A good balance of pre-pays, monthly's, and pay-as-you-go keeps the money flowing. We don't sell mowing, we sell service, and property maintenance. With few exceptions now, mowing is just one service in the group- it used to be the main one.<p>Your idea for the SASEs is good, I had it once, but some of the customers lost track of the invoices or envelopes. Some became close to death, and since there was no fresh copy I had to wait until the executor took over, etc. Even though it seems efficient to you or me, I have not had good luck 100% of the time.<p>Your use of the word sizeable is not a good idea in my opinion, because it invites questioning, and for all the efficiency you are trying to create, your efforts will be lost on the phone calls asking you to explain yourself. A guy called me today and left a message that if I didn't buy a machine by the end of the month, there might be a shortage in March, and prices are going up. He was crossed right off of the list without a second thought by me, because tomorrow his competitor is coming to the yard to demonstrate a similar machine. If I were your competitor, the customers would recieve a clear and concise agreement, with no subjective banter, room for a signature, and a list of terms (if you want a copy I can post a sample). Mine would be set in STONE, so to speak, and they would be able to figure out their budget without the threat of a sizeable increase. Repeat customers would also be able to calculate whether or not we raised the price. Our increase often reflects a COLA (cost of living adjustment), not weather matters or politics.<p>Finally, if you find yourself in a jam during droughts or slow winters, you might want to consider other work options. I was doing water well repair lines for a local pump company, and oil tank removal with our backhoe. This naturally leads to lawn and landscape restoration. We also picked up a brush chipper to do clearing, and tree removal/pruning (with the aid of an arborist). These options keep our maintenance crews busy all the time.<p>----------<br>Phil Grande - Soundview Landscape Supply - http://members.aol.com/slsnursery<br>Ivy League Landscaping - http://members.aol.com/scagrider
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  #13  
Old 02-15-2000, 06:49 PM
HOMER HOMER is offline
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Join Date: Jan 2000
Location: Alabama the Beautiful
Posts: 3,183
I could not make it in this business if I didn't do it that way. I have succeeded in converting/establishing around 40 of my customers to year round and I just got off the phone with a guy who wanted seasonal mowing. I told him I wouldn't do it that way because there is something to do every month of the year. I think he will call back because I explained to him the rise in costs during the summer months, my way will be a flat rate year round, he liked the idea, and since it is in an area I am not working in I offered him a real good price. Another selling point to this idea is people with pools. They already have increased summer expense(I know this for a fact)due to the cost of electricity for the pump, extra water usage, and chemicals, or a pool service. By leveling off the mowing it might help them out and they might even be glad to do it that way. I have not had any problem gaining customers this way, in fact most that call request it now. I think in my area it is the norm now and not the exception. I still have some problems convincing industrial sites though. They don't see the need but as long as I get them back this growing season it helps with the expenses. This month has, and historically is, the slowest month for me because almost all the leaves are up and the grass is still dormant. I still go once this month though to pick up any remaining leaves and cut weeds or whatever needs doing. I offer a 30 cut plan as a standard mowing package and as bad as I hate mowing bahai, it will continue to sprout up even in a drought thus keeping me busy getting rid of that mess! I have my schools on a 33 cut schedule and they pay year round. I have also picked up a lot of residentials that have irrigation so the drought doesn't affect them either. <p>Bottom line, they have to pay for every other service on a monthly basis,they just need to budget for your new monthly invoice.<p>If you can afford to, (and I say that knowing that some can't, but you will)start turning the seasonals away and fill your schedule with as many yearly as you can. Now is the time to start working on them, you have several months to build your customer base to a level that you can still eat next winter! If you can't mow every month tell them you'll wash their car in the off months, your still providing a service and they ain't paying for nothing!<p>Homer
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  #14  
Old 02-15-2000, 07:30 PM
mountain man mountain man is offline
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Join Date: Feb 2000
Location: North Carolina
Posts: 141
In my initial meeting with a potential customer, I explain that our services are based on an annual agreement. I total up the total expense to the customer - mowing,aerating,overseeding,fertilization, leaves,irrigation winterizing, etc - for the entire year. I then divide that number by 12 for their monthly rate.<p>I have found that customers just want to be informed. By telling them up front, what will happen throughout the year there are no questions. The key point is explaining that we may be out more in March than January,but their monthly rate is based on the annual amount. Also because there are no big fluctuations from month to month I have less complaints/questions about the monthly bill and it is easier to keep customers from year to year. <p>Since using the annual contract, I have have minimal payment problems because the customer knows they are contractually bound. I do have a clause in the contract that states the contract automatically renews if neither party gives written notice of cancellation or modification 30 days in advance of the contract date. This way I can get rid of customers I don't want but I don't have to get new contracts every year. <p>I also heard of a different approach. The guy sends his bill for the upcoming month on the 15th (March bill goes out Feb 15). If payment is not received by the first then they do not perform the service. I am not a big fan of this because some people may get mad if their lawn doesn't get mowed because they don't prepay, but it is probably good for some of the seasonal or higher risk customers.
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  #15  
Old 02-15-2000, 08:15 PM
lawrence stone's Avatar
lawrence stone lawrence stone is offline
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Location: anthracite valley, commonwealth of pennsylvania Winter residence: Charlotte County FLA
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No Phil the letters are not stamped and sealed I was soliciting useful input like your message.<p>I will not take on a residential mowing account if they are irrgated. They screw up my routine and I am not going to change for one stinky little 2k yearly account.<p>Excessive rainfal is no big deal for I only apply 2.5 lbs of 50% SCU N per year.<p>I have two killer 52&quot; toros with 16hp twin kohlers, use gator blades and side discharge.<br>The most I have to do is cut the turf again in the opposite direction when the turf is<br>10 days old in mid May.<p>I will take your advise a not to include a<br>mowing schedule. I will just state the turf will be mowed every 7 to 14 days as weather<br>conditions dictate.<p>As far as off season work goes I have lots of<br>non-green industry interests that are profitable. In fact I plan on importing english speaking laborers next season. You can pick them up at JFK.<br>How many do you want? Place your order now.<p>
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  #16  
Old 02-16-2000, 08:14 AM
SLSNursery SLSNursery is offline
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Location: West Haven, CT
Posts: 442
Larry - good call on the 7-14, we call it 'weekly' service. I'm not sure I understand the idea behind not taking irrigated accounts though. Over time, they are the most consistent, in the sense that they don't usually surge, and they don't drop off in the summer. We set the irrigation controls when necessary, and also make sure that they don't water on their assigned visit day. So if you can state that excess rainfall is no problem, then why not controlled irrigation. The folks who buy the irrigation often represent the target market for full service clients as well. You may be neglecting an entire profitable sector of your market. <p>Now, sit down, and zip it for a minute while you read this. I am going to make a point, and do not intend to start an argument. We accept credit cards for our supply business. Many people, contrary to your previous beliefs, use credit cards for monthly consolidation, accrual of airline miles, or other free benefits. They may or may not pay in full each month. That is not an issue, because each month our account gets credited, in advance for the full amount of their bill plus any extras, minus a small fee (our fee is small, relatively, and we need the ability to take cards for the supply business). No waiting, no questions, no problems. We have done jobs for Universities and the Federal Government, who were able to pay immediately by using a departmental Visa/Mastercard. No purchase orders, no bureacracy, etc. Think about it, even my Chinese Food Delivery guy, Ming, accepts Visa. <p><p>----------<br>Phil Grande - Soundview Landscape Supply - http://members.aol.com/slsnursery<br>Ivy League Landscaping - http://members.aol.com/scagrider
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  #17  
Old 02-16-2000, 08:50 AM
lawrence stone's Avatar
lawrence stone lawrence stone is offline
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Location: anthracite valley, commonwealth of pennsylvania Winter residence: Charlotte County FLA
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IMHO irrigation is a waste of the money and<br>natural resources. If you pratcice IPM why not go all the way. Last year there were drought restriction on irrigation of lawns.<br>So when the irrigation was needed you were<br>breaking the law (your nasty neighbor was always looking out his window ready to turn you in to the water cops). I have no need to<br>damage sprinkler heads etc. In my area a customer with irrigation is less than 1% of the total market.<p>As far as the credit cards are concerned it may be needed in your broad scope of business<br>but in my narrow scope the guy who collects<br>air miles is just the opposite of the types of new residential customers I want to attract. <p>Anyway I demand to get paid up front this year. Why should I have to wait for my money <br>and lose 4% or so of the gross?
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  #18  
Old 02-16-2000, 02:16 PM
lawndogs lawndogs is offline
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I can't believe you wouldn't want properties that had irrigation. All my clients have a sprinkler system and I didn't miss one week of cutting.They even time them so they don't interfere with our cutting times.
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  #19  
Old 02-16-2000, 02:28 PM
lawnboy1
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Why don't you send your customers a copy of your &quot;MISSION STATEMENT&quot; then they would understand what you were really were trying to do.
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  #20  
Old 02-16-2000, 02:46 PM
thelawnguy thelawnguy is offline
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Join Date: Dec 1999
Location: Central CT
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I, too, am no fan of automatic sprinkler systems. The one account of mine which has them , never fails, power failure, she forgets to reset them, 10am the sprinklers are going and I cant do my stuff.<p>Bill
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