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Business Billing??

Discussion in 'Starting a Lawn Care Business' started by Green-Cuts, May 17, 2006.

  1. Green-Cuts

    Green-Cuts LawnSite Member
    Posts: 154

    I have a few comercial properties that I am doing and have heard it takes around a month after you bill them to get paied? What do you guys do that have comercial accounts that do not pay until a month after receiving the bill??

  2. Reliable Lawns

    Reliable Lawns LawnSite Member
    Posts: 95

    I personally enjoy getting payments in Nov and Dec for the prior months of service. Then try and get some clean ups in Feb or March, so there isn't much time that the mail man doesn't bring me money year round. Good Luck

    PMLAWN LawnSite Gold Member
    Posts: 3,535

    What does your contract say? Talk to the finance manager about it. Where do the checks get cut from. About half of mine are out of state so yes 30 day net is going to happen. After the first month it will not matter. I invoice everybody with a net 30. At this point it does not matter any more but when you stop and think about it I bill in arrears so the invoice is up to 30 after the work and another 30 means I carry for up to 60 days or almost 20K. That is part of doing business.
  4. Green-Cuts

    Green-Cuts LawnSite Member
    Posts: 154

    I have not gotten into contracts yet but the more I deal with PITA customers I am thinking of moving that direction. I find that a few of the PITA customers try to change what they hired me for after a few weeks.:hammerhead: :hammerhead:

  5. topsites

    topsites LawnSite Fanatic
    Posts: 21,653

    Ok, couple of things I can tell you from my own experience with a commercial contract:

    1) Payola is all about how you word it in the contract. If you want to be paid in 10 days then you put that on there.
    2) With commercial contracts the pita factor can still exist, now instead of one customer you may have a dozen renters who all want to change stuff after the Association has hired you. It's not about them not being in charge (which they're not), but they each carry a vote and some feel this means they can tell you what they want done and they're not entirely wrong... If they are renting then they pay money and part of that rent money pays you, so...oh boy it can be fun !

    But it's not so bad, I mean I learned some diplomacy and a little bs goes a long way but yes you have to do a good job and the money is so-so because it's lowest bidder, but I may or may not do it again next year, dunno yet.
    Somedays I feel like I must be a little bit like President Bush - I have to do my job, whether they vote for me next year or not LOL !
    Could be better, but it's far from the worst, too...
    So as you can see, it depends also.

    p.s.: I would NOT recommend a contract to anyone with less than 4 years full-time in the business, at least 3 !
  6. Mac_Cool

    Mac_Cool LawnSite Member
    Posts: 62

    Why? Specifically.
  7. topsites

    topsites LawnSite Fanatic
    Posts: 21,653

    In one short word: Experience.
    Thou I suppose if you have deep pockets it may not be a problem, so long you can tolerate the loss.

    The longer version of it is, it's a lot more money and labor and stuff at stake. For example, my contract literally covers 16 percent of my annual gross, that is a percentage equivalent to somewhere between 5 and 10 residential accounts all in one fell swoop.
    Some get excited about the potential income, but with potential income there comes potential loss... If I were to lose out on this deal by putting in more than the budget covers for example, I could easily fall behind by 10-20 percent income (per month or even per week), not an easy figure to swallow either. As lowest bidder, it is too easy to put in more than what is bargained for while the absolute minimum is not good enough, and I agree.

    So if I lose the contract, I'm losing 15 percent income which is something I can tolerate today... I have no problem putting my foot down, even if they're standing there with another Lco by their side and ready to fire me and hire him, I can walk away and that helps a lot because I know 2-3 years ago I could not have done that, mainly because it is scary.
    Another way to say it is, I am here to improve the place and I don't care if the board of associates votes for or against me today or next week, I'm not here to get their votes or their approval at this time.
    At the same rate, I find it is only due to previous years of having gotten messed around a lot in small ways that I know how not to get taken advantage of in a big way. Whether in a small way or a big way doesn't really make a difference except for the money factor but if you're being taken advantage of, whether in a big way or small, it's all the same thing and if you can deflect the small stuff then the big stuff deflects as easily, keeping in mind there is more money at stake that is what you have to be able to either ignore, or tolerate as if it's so much monopoly cash.
    Because just like with residentials, commercial contracts can mess you around and if or when they do, they can do a lot more damage than the residential.

    PMLAWN LawnSite Gold Member
    Posts: 3,535

    I have no clue what you are talking about.
    I think you are trying to say -if you lose a big account you loss a lot of income.
    But what does that have to do with contracts.
    Every customer I have is under contract now. Some as small as 3K for the year --some as big as 62K.
    If you lose one you just get another to replace
    and again I do not know what any of this has to do with writing a contract?
  9. Mac_Cool

    Mac_Cool LawnSite Member
    Posts: 62

    The issues you bring up are more to do with commercial work in general and are true to all businesses that do commercial contracts. I have known of multimillion/year businesses that had 1/3 or more of their sales from one contract. It's nice while it lasts but too many decision makers are fickle and will flip to save a few bucks thinking it will make them look good with their boss. The key here is to build some flexibility into your contract and expect them to renegotiate later. Also make sure you are taking the decision maker out to lunch at least once a month, give them a 'special rate' on their personal lawn service and maybe an occasional round of golf. Give those people every incentive to want to keep you. Keeping commercial contracts is all about doing a good job and kissing ass.
  10. Freddy_Kruger

    Freddy_Kruger LawnSite Bronze Member
    Posts: 1,064

    For myself, I hate commercial contracts it's always lowest bidder and maximum BS. I am exclusive to residential but I never say die.

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