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Does anyone only do Residential maintenance?

Discussion in 'Lawn Mowing' started by RB, Mar 18, 2002.

  1. RB

    RB LawnSite Senior Member
    Posts: 306

    I'm to the point where I have had to drop several commercial accounts because I don't plow them and they are very late payors. Plus it seems they are always shopping me around. and if they don't shop me around, in a couple of years or so a new prop. manager is hired and somehow he or she brings another co. in to do the work.

    I was wondering if anyone has "been there done that" with commercial properties and now strictly sticks to residential customers?

    I've been in biz for only 5 years, but I think the stress is not worth the extra $ in commercial work. I'd rather mow 3k lawns for $25 any day.

  2. I do only residential work myself, except that I had 1 commercial property for 4 years untill it sold. Because it was owned by one of my residential customers + very small, was the only reason I took it. I prefer more smaller accounts so if someone is paying slow it's not as serious as a commercial customer that might be 5-20% of my business. But thats just me.
  3. I don't waste to much time bidding comercial because of the reasons listed.
  4. Mykster

    Mykster LawnSite Senior Member
    Posts: 668

    When I first started I wanted to target just commercial. My first two accts. were commercial properties. One property sold and the new owner did not want to pay the money, so he cancelled. The place hasn't been touched since mid-season last year. The other was always late on their payment. Constantly had to ride them to get my money. It's a large storage unit company and I'm sure that if people were late paying them they would not hesitate to add on late fees. Find that kind of ironic. So now I lean more toward residential. They seem to be on time more with their payments and seem not to eager to look around.
  5. Nebraska

    Nebraska LawnSite Senior Member
    Posts: 525

    There are guys that make good money on a strictly commercial maintenance focus... In my opinion I would rather grow steadily pursuing higher profit accounts. In our area the higher profit accounts seem to be more readily available in the residential sector of the market. Add this to the fact that our residential customers stay with us MUCH longer (till they move or die) and we find no reason to pursue the commercial accounts; the ones we have, have come to us on their own. This is were you have to ask yourself the question of gross revenue versus net profit. I also notice the "newer" guys are eager to bring commercial properties on at rock bottom prices; and believe me they take advantage of it.
  6. JimLewis

    JimLewis LawnSite Fanatic
    Posts: 6,840

    We do strictly residential work. I never did get into commercial too much because I can't make the hourly rate that we do with residential. So most of the times in the past when I've bid big commercial maintenance, my bids are way too high and are almost never accepted.

    However, the 4 or 5 commercial accounts we have had over the years have all turned into nightmares in short time which just furthered my dedication to only doing residentials.
  7. Commander

    Commander Banned
    Posts: 116

    Here is how I am trying to grow my business.
    1) get about 60 or so estates.
    2) get at least 100 little places
    3) get a few good relationships going with some "commercial accounts" which pay extremely well.

    I find that with the estates you will make very little money cutting grass, however you make a good chunk of money doing landscaping and other side work. Much more so than with the little places. The little places though, in and out in under an hour is good money for lawns and provides a good amount of smaller side jobs as well as your occasional mid size project. Then you have what I don't really consider commercial properties, but they are. These are the ones where you don't have to worry about them getting rid of you next year because you know the owner of the place and he/she isn't going anywhere for a long time unless you really screw up. Those types of accounts have very little grass to cut, and a whole heck of a lot of landscape services that pay well because you are the only one that they call. Trust me, those types of "commercial accounts" are out there. The estates and small lawns are usually the same way. They will stay with you through thick and thin.
  8. Commander

    Commander Banned
    Posts: 116

    By the way, if there is any question as to what the other type of place is, it's something like this.

  9. rodfather

    rodfather LawnSite Fanatic
    Posts: 9,501

    Hey Commander, is that JR's place on Dallas?
  10. LawnLad

    LawnLad LawnSite Senior Member
    Posts: 738

    I understand the commercial concerns. Residential customers can be finicky too. I think it comes down to relationships and finding those customers that value you as a person and the service your company provides to them. They have to get value for their dollars, which means you have to meet their expectations. Don't work for someone that has different priorities than yourself.

    Commercial or residential can be both profitable and unprofitable depending on who the operator of the company is.

    Check out ALCA's Operating Cost Study book and look at the numbers for the regular companies and the high profit companies and see what the difference is in their numbers. How you run your business will determine what your profit margin is.

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