charging good customers more, because.....

Discussion in 'Lawn Mowing' started by bobbygedd, Dec 21, 2004.

  1. bobbygedd

    bobbygedd LawnSite Fanatic
    from NJ
    Posts: 10,178

    well, it seems to me, that every business has it's share of losses to deadbeats, or expenses involved collecting from deadbeats. alot have said, "this is factored into my prices." so, the bottom line is, you are charging your GOOD, or paying , customers, for the loss you suffered from non paying, or slow paying customers. is this correct? i'm all for it by the way...somebody has to pay for it. the only thing that seems dishonest, is when you do your summery at the end of the year, if you find you have suffered NO LOSS do to late or nay payers, do you adjust your fees the following year, lowering them?
     
  2. Gilla Gorilla

    Gilla Gorilla LawnSite Senior Member
    Posts: 923

    No because you will eventually have a slow or non payer to deal with and you will already have gotten that little bit of extra money from the past year.

    Its kind of like when I worked at the dealership. We charged $25.00 for shop supplies for any labor amount over $200.00 for each repair order. Did each and every customers vehicle require $25.00 worth of misc. nuts, bolts, rags and chemicals Nope. Maybe no vehicles for that year required that much for shop supplies, but come the next year when they had to use $75 or $100.00 worth of
    supplies that did not have a part number on one vehicle they had made their money the previous year. I know that this is not the best analogy but it is what I could think of.
     
  3. jlewis

    jlewis LawnSite Member
    Posts: 140

    Based on your past experience a certain percentage of your accounts recievables should be going to an accrual account for uncollected A/R. (If in the past 2% was uncollected that is what you use etc.) At year end, this money goes toward the uncollected A/R and the remained (if any) goes to your profit/loss for the year.
     
  4. Norm Al

    Norm Al LawnSite Bronze Member
    Posts: 1,227

    the medical and retail industry has been doing that forever!
     
  5. captaingreen

    captaingreen LawnSite Senior Member
    Posts: 471

    From a business standpoint, I couldn't agree with you guys more. But from a practical standpoint I don't feel I should have to pay for the deadbeat who doesn't pay his bills (although I realize I do), so why should I charge my good customers for the moron that slacks off. I had actually been thinking of what you guys are talking about but it just wouldn't seem right, I mean they pay me a honest days wage for an honest days work, isn't that enough.
     
  6. KathysLGC

    KathysLGC LawnSite Bronze Member
    Posts: 1,345

    Nope. Every customer pays me for what i do for them, not what others don't pay for. It's a good way to loose business to a low baller. I try and keep my prices fair. We all want to make more money but a loss is just that, a loss. I will stop services if a customer is 1 month late. That would be a 2 month loss if that matter isn't resolved and depending on how much is owed to me i will do a BG and take them to court. The loss is our responsibility not our customers. In retail they use shoplifting as an excuse for high prices but when shopping for services many look at the price first, then shop around.
    Even good paying customers may want to shop around. That's a chance I don't want to take because of high prices. I am far from a low-baller so don't get the wrong idea, but if a lawn is $45 per cut I'm not going to charge $49 due to expected losses.
     
  7. geogunn

    geogunn LawnSite Gold Member
    from TN
    Posts: 3,010

    BOBBY WEASEL--after 8 years I am down exactly $85 due to non paying customers. one account for $50 and one for $35.

    and those losses were claimed as apropriate at the time of accounting.

    so while your catterwalling about your customers is entertaining, I just don't believe it is the biggest problem that most of us face.

    GEO payup
     
  8. fga

    fga LawnSite Silver Member
    Posts: 2,445

    cat·er·waul ( P ) Pronunciation Key (ktr-wôl)
    intr.v. cat·er·wauled, cat·er·waul·ing, cat·er·wauls
    To cry or screech like a cat in heat.
    To make a shrill, discordant sound.
    To have a noisy argument.

    :) everyonce in a while i add a new word to my vocabulary. I remember when i was in college, my friends didn't understand a word i said.. :)


    Geo, did you sleep on the dictionary instead of your pillow last night? the old osmosis trick, huh?
     
  9. bobbygedd

    bobbygedd LawnSite Fanatic
    from NJ
    Posts: 10,178

    that's what happens when you work cheap, they can't wait to pay you. dog burial huh...... :rolleyes: fake cops have the right to remain silent. please excersise that right! ...........CATTERWALL: a land mass surrounded by water on three sides
     
  10. rodfather

    rodfather LawnSite Fanatic
    Posts: 9,501

    No, in my business plan I adjust my % of uncollectible funds. Simple.
     

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