After the "estimate"

Discussion in 'Starting a Lawn Care Business' started by BC1230, Oct 14, 2011.

  1. BC1230

    BC1230 LawnSite Member
    Posts: 22

    Jumping into this headfirst(good thing I have a hard head). After you estimate a residential lawn for regular mowing, how do you set up payments with your customer? Do you charge per cut? monthly? Is the majority using contracts? Or does this tend to scare people off? Thanks guys
     
  2. Green Industry Pro

    Green Industry Pro LawnSite Senior Member
    Male, from Tyler Texas
    Posts: 281

    Contracted work is the best. Less hassle. If its a one time cut then obviously you don't need one but if you will be cutting this same account all year or for many months straight, then use a contract. I think a contract can bring a client security in one way because you are locked into doing your job right. Contract = no surprises for you or customer. I'm personally trying to work on getting my company moved into doing large residential lots or commercial accounts instead of smaller residentials. Once I switch over I can run a stand on or rider over the property and be done in no time with less fatigue.
     
  3. weeze

    weeze LawnSite Fanatic
    Posts: 8,493

    i let the customer decide how they want to pay...some pay every time i visit and a few pay once a month...i don't do any contracts and i haven't had any problems.
     
  4. mykayel

    mykayel LawnSite Member
    Posts: 41

    This was my first year (since cutting in highschool about 10 years ago) and I did contracts with every person. And I would just bill them at the end of the month with payment due by the 15th. This has worked reasonably well. The only probably is that I've had a one customer that just never paid me. So by the time the 15th rolled around I had already cut 6 times and hadn't got paid yet. I threatened to turn them over to a collection agency but that didn't matter to them. I haven't done anything yet. I could take them to small claims or actually turn them over to the collection agency but its not really worth the effort to me to try and get anything out of them. I'm just going to take it as a loss. I had two other customers that dropped me in the middle of the year, and same thing, I had two cuts with each of them that they never paid for.

    For next year I'm contemplainting making them pre-pay for the month. Then at the end of the month I'll bill them for the next month. This way I'll at least get paid and not work for free with a new customer. I'm just a little worried about scary away any new customers this way. Some of the big companies have them pre-pay for the year and will give a discount for doing it this way.
     
  5. THIESSENS TLC

    THIESSENS TLC LawnSite Senior Member
    Posts: 759

    I've never used contracts and I've never had a problem...yet! lol. I'm definitly thinking of getting at least 2 weeks pay in advance for new customers next year.
     
  6. TMScapes

    TMScapes LawnSite Member
    Posts: 3

    I am pursuing the contracted way. Here in the north east I will figure out spring and fall cleanups, pruning, and weekly visits and do an installment plan. I worked for a large firm before going out on my own and this worked out well. It helps you plan your year and you know how much $ u have coming in. In doing a 9 insatallment plant i am only chasing people for money 9 times instead of 30-35. Remember its about customer education and the art of giving the customer what they want without loosing control of the situation. Sell them on "its better for everyopne. No surprises, and you know what you have tp set aside for the year" Go Get em!!
     
  7. stickleylawncare

    stickleylawncare LawnSite Member
    Posts: 170

    We don't require contracts, but we offer a small discount if they sign up for a yearly contract. We bill once a month either by mail or email if they opted in.
     
  8. TMScapes

    TMScapes LawnSite Member
    Posts: 3

    discounts are a good way. I like that. I convinced a habitually bad payer into a 5 % discount to pay in full for the year. He went for it!!!
     
  9. guitarman2420

    guitarman2420 LawnSite Senior Member
    Posts: 284

    95% of all my business is contracts - why wouldn't you want contracts? A very wise business man told me years ago - without an annual contract you have exactly one day's worth of guaranteed business. As you grow your business and decide to go to any bank or SBA, or lending institution, they want to know about your assets. A contract is a binding, legal asset and is listed on your application as equity. I can make business decisions now based upon a guaranteed (I know, I know, nothing in this world is guaranteed) stream of revenue. If I'm strictly doing fee for service work, without a contract I am always at the mercy of a cheaper price, or the occasional screw up that myself or an employee might make. By having a contract I have the right to be able to fix a problem before they terminate the service. Some people are scared of agreements because it fixes some of your costs; but it is preferable to going month to month. I simply figure the entire cost of the service for a year - mowing, leaves, fertilizer, weed treatments, shrubs, aeration, etc. (they can pick and choose) and simply divide it by 12. They like it because payments are lower and I like it because it allows me to have income in the winter and it forces me to BUDGET. The only cautionary tale is don't include mulch in your annual agreement. My experience has shown to make that service billable and extra. You don't want to install $500 of mulch the first month of an agreement and then have them go bad on you. I've been doing it this way for over 5 years now and have less than 1% bad debt. The key is keeping on top of your accounts payable. If someone falls more than 1 month behind you have to cut them off and I bill them at the beginning of the month for the service that they will receive that month. Don't be afraid to ask - the client will do it if they value you. Have gone from $0 to $350k annualized revenue with this approach in 5 years.
     
  10. fireman gus

    fireman gus LawnSite Senior Member
    Posts: 517

    We basicly let the client choose how they want to pay. We have 2 that insists on paying each time. The rest are billed monthly, either by written statement left at the door, e-mail, or credit card.
     

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