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  #11  
Old 08-08-2000, 02:25 PM
mountain man mountain man is offline
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Location: North Carolina
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Get away from per cut billing

One of the keys to this business is cash flow management. It is hard enough dealing with scheduling, customers, and mother nature as it is to have to worry about: a. pissing a customer off or b. not getting paid and doing free work. By going to a monthly billing program, it takes alot of stress off of you when paying the bills. I've actually gone to annual billing only. I take what the total cost of the services desired will cost on an annual basis and then divide that number by 12 for their monthly rate. By doing this I am able to add stability to my company and able to satisfy the customers expectations because they now know what to expect throughout the year.

Most customers understand what we are up against when dealing with the weather. What they don't like is suprises. If they get one bill for the month then there are no suprises. If the weather is bad then you still get paid, but the customer knows their lawn is going to get done as soon as reasonably possible.

One trick that some "cheap" customers play goes as follows: They ask for a quote for monthly service. Once they get the quote they say that it more than what they want to spend but that they do want us to come out every other week for 1/2 of the monthly rate. My response to these potential customer is that our twice per month service is 80% of the monthly rate. Typically the customer will either go the regular service route or find someone willing to work for next to nothing. Either way we win because we don't get stuck with extra work every other week or we get a good regular customer.
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  #12  
Old 08-09-2000, 01:22 AM
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lawrence stone lawrence stone is offline
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Kirby wrote:

>This is a topic I got slammed on a few weeks ago by a few with some saying I was screwing myself for doing it this way and I should bill by the cut. It really suprises me that Stone is now saying bill monthly when he was saying bill by the cut

My suggestion is to bill in the growing season only (up north 8 months about)if you are not providing any snow removal services.

Since it does not snow in NC I think you are just wasting your time picking up pine cones once a month when you could be at Epcot center.

If you have cut the lawn down to 2" last mowing out and ground up all the leaves what debris is there to pick up
over the winter?
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  #13  
Old 08-09-2000, 09:53 AM
thelawnguy thelawnguy is offline
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I charge my customers by the cut; if I get far behind, I will mow it higher than usual, then return in 5 days and mow it again but a bit shorter. I still get my money. Its not good for the lawn to lop it all off in one shot.

No I would not charge extra, and my customers would begin to look towards me with suspicion if I attempted to. I do not give discounts during the dry July days when I run over the lawn and dont even need to trim.

What is in the agreement (contract, work request, etc) that the customer signed in the spring? Price per cut? Monthly billing? If its spelled out per cut and you try to charge extra you just shot your integrity and credibility out the window. If its per month, you were already paid for the time you didnt cut it last week.

Your question tells an important lesson; spell it out in next years contract.
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  #14  
Old 08-09-2000, 12:20 PM
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KirbysLawn KirbysLawn is offline
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Stone:
Quote:
Since it does not snow in NC I think you are just wasting your time picking up pine cones once a month when you could be at Epcot center.
Wasting time? FYI I don't "pick up pinecones" all winter but that cute and I'll play along. If I am picking up pinecones once a month and making between $140.00 and $300.00 a month per lawn, I would say that's quality wasted time and 1000's of dollars! Most of what I do in the winter is visit the lawn, look for small limbs and debris, and hit the road. I incorporate my mowing and fertilizer charges into one monthly fee so payments keep coming year round, just like the bills.

Sorry Stone, I'm not interested in going to Epcot or sailing in Florida for 3 months, I would miss my family too much, I have kids in school and a wife. You made the funny comment before:
Quote:
Kirby provides service to a residential account for $1700 year round.

He picks up some pine cones in the winter.

Stone provides service to a residential account for 8 months for $1700.

He sails his boat in SW Fla. for a couple of months in the winter.

Get the picture now Kirby?
Funny thing, according to your own charges ($22-$25) per mow, Stone would have $850.00 to take to Fla. at the most, while Kirby would have $1700.00. Stone would have to mow a lawn 34 more times to make up the $850.00 difference of this one lawn, Get the picture now Stone?

Seriously, maybe you guys should try to bill monthly all year. Next time you go out to give an estimate for a lawn your just reallly don't want to do, give them a monthly charge on your estimate, for year round service. Lets say you were going to charge them $25.00 per cut (I think that's your average rate) that would be $850.00 a year, tell them it will be $100.00-120.00 a month, but explain to them it includes fertilizing, weed control, pre-emergents, and what ever you feel is needed for that price. Also explain that the lawn will be mowed weekly or as needed during drought Let the customer know, they are getting a package deal that will do what is best for their lawn! If it works you just made between $350.00-$590.00 per lawn a year for a fertilizer program, if it does not work, oh well you didn't want it anyway!

Bill your right, everything should be spelled out. Mowing a lawn every week during drought when the grass is dry is not a good thing too do, during that time I mow every 10-12 days with no complaints because my customers (except for one ) know and understand the reasons. Mowing a lawn weekly even when it does not need it to me is not in the best interest of the customer or the lawn. I know if it's by the cut you still need that charge to maintain income, but just riding a mower over the lawn just to say "I did it" and take the check is not a good service. Another reason why year-round billing is good.

I'm not totally against by the cut billing, but myself and others were told we were "screwing ourself" by doing it and I have yet to be shown how I'm doing so. My by the cut charged lawns (8 lawns) are by far my least profitable lawns. [b]As far as the question on this post, ok charge by the cut, if you "double cut" due to long rains then that's 2 cuts, hence the word "double".


[Edited by KirbysLawn on 08-09-2000 at 03:34 PM]
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  #15  
Old 08-09-2000, 01:40 PM
Scraper Scraper is offline
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I would agree that you aren't screwing yourself with the monthly billing. Screwing the customer is what I see. Like I said before...I wish I could find as many suckers up here in PA as you seem to have in NC.
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  #16  
Old 08-09-2000, 03:24 PM
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KirbysLawn KirbysLawn is offline
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Scraper, if a company charges by the week or cut and mows a lawn when it's not growing just to make the money what would that be called? If a company does charge by the cut, and the grass stops growing due to drought how do they maintain revenue? How do they plan on each months revenue not knowing what the weather will bring the following month?

As for screwing the customer, please explain? I tell them up-front what the service covers, what is included, what happens when the grass grows slow, what happens when it grows fast, and such. I provide these customers with a mowing and fertilizing package that is comprable in price to me mowing and them paying ChemLawn. Maybe it's in the sales presentation and how myself and others present the service, not sure. What I do know is I can mow half as much and make the same as if I billed on the by the cut method.

Heck, I'm cheeper that some around here. A friend who helped me get started charges $135.00 a month minimum, year round for just mowing, he bills everything seperate, everything. He tells the customer if you want to retain my services for next year I must be paid all year, he provides the quality most are looking for and does a booming business.

Just try the example above on the next lawn you really don't want, maybe you will make a little more that you expected maybe not, it will not cost anything to try.

[Edited by KirbysLawn on 08-09-2000 at 08:10 PM]
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  #17  
Old 08-09-2000, 07:07 PM
Toddppm Toddppm is offline
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Ok i did try that today, pretty funny , very large lawn, told her it would be $200/mthx12mths.(bumpy raggedy,crappy lawn)she said it sounded pretty fair, so i wrote it up, oh i misunderstood! I guess she thought i was going to mow the whole year for $200?Anyways the more i think about it, the more i like the idea, any new people will be put on a 12mth contract. I am going to put all my existing customers on this program for next year except a couple that i don't mind doing by the cut.If they don't like it , so long.Have a few that already do this but only over 8-9 mths. I want to provide complete service, mow,fert,weed control,mulch, shrub trimming,leaf removal,gutters,and shrub+tree monitoring for pests,disease.If i could get 50-100 of complete care customers, i could stop advertising altogether, and will know what we have to do every day,a perfect world! How many cuts do you figure in your estimate and do you price each additional service on the contract or just a lump total for everything? I'm in No.Va. i figured i'll put 30 cuts except for people with very good lawns that will need extra attention i'll put 32?The lady above i put 20 cuts, she originally wanted a once a month cut.NOT.Think i'll do a minimum 30, any less and they probably won't be serious customers that want a professional service anyhow.Any thoughts?Good or bad welcome
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  #18  
Old 08-09-2000, 07:56 PM
lbmd1 lbmd1 is offline
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Andrews, no offense taken on your doubt of pricing being that high. I am in an area that a starter home goes for around $220,000. People on the seacoast of NH are buying homes near the water for an average of $ 3,000,000 and then tearing them down to put up 5 million dollar homes. Our average home we maintain is in the $750,000 range. That is just the way this area is. We maintain about 120 or so lawns averaging out to about $40 a lawn. Our crew is only myself and 2 others so on my large account day, we do average over $110 hr! Our customers call us "perfectionists", and we no longer take on any more accounts except by referral. We are actually looking at dropping over 40 accounts to enjoy some time off. For you guys asking what we do when a drought occurs, we have enough work put aside especially shrubs and hedge work, installations that are pushed back from spring, etc... We never go without work. We charge per cut, so to be fair to both parties. I was brought up with " a fair days work for a fair days pay" mentality. So charging by the month in a drought year to me would be unfair to charge for work not performed. It is this reason that we never have to bid for work. The trust from our customers is a 2 way street. I charge them fairly, and they request work knowing they'll get a fair bill. We charge $35hr for all labor work per man hour and have our schedule completely booked. Unfortunately, we are growing tired of the workload and do not want to add additional labor or expenses. Also, how does one go about undoing people who are familiar with per cut pricing to per month pricing without squabbles? I am open to any ideas. Because we have a personal relationship with most of our customers, I don't think they will mind considering they saw most of the work that we performed in getting their lawns back into shape. I am charging them a half charge cutting added to their normal bill. I'll let you know how I make out. I do appreciate all of your feedback, and am considering at least some form of monthly payment. If any of you have a form or contract on this, please email me at LBMD1@yahoo.com. The reason I asked for the Northeast mowers is that most cutters up here charge by the cut due to the seasonal nature of our business up here. Hey Lawrence, email me your email address as I have some additional questions as a fellow northerner for you.

Mike
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  #19  
Old 08-09-2000, 08:33 PM
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KirbysLawn KirbysLawn is offline
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Todd, I was not sure in your post, you said you tried it, did she agree to the $200.00 a month? LBMD1 I will email you a contract later tonight, got to go mow a little more.
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  #20  
Old 08-09-2000, 09:29 PM
cutntrim cutntrim is offline
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Ibmd1,

You know your customers better than any of us so you'll have to decide for yourself how to address the situation. As for myself and my partner, we charge per month and have been double cutting, blowing, and even raking most of our lawns for the past week and a half or so. We'd been cutting at 3 1/8" and decided to lower our mowers to 2 3/4" last week. Unfortunately we picked the worst week ever to do that. It's rained (monsooned) virtually every day and the humidity is awful.

Because we charge per month we don't discount for drought, or increase for rainy conditions. As my partner Adam said to me yesterday, "this is just a bad year to be a lawncutter, it's like farmers when they lose most of their crops to floods or drought". We've stopped getting angry over the rain and have slipped into a semi-permanent state of shock. It's by far (BY FAR!) the worst season we've had in our 10 years. Our customers understand the difficult conditions and have accepted that we have to put extra chores off indefinately and their lawns aren't looking quite as great as they usually would on days where the grass is drenched.

Oh well, such is life. Can't wait for winter so I can sit in my truck with the radio on, and flick a couple of switches as the truck does all the work plowing, and I don't have to put in 75 hr workweeks and miss my family.

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