How to charge?

Discussion in 'Business Operations' started by rgodwin, Oct 8, 2013.

  1. rgodwin

    rgodwin LawnSite Member
    Male, from Buna, TX
    Posts: 56

    New to the forum and probably gonna have a lot of questions. I have a small but decently growing lawn care business back home which has been up for 3 years now. Finally started making enough from it to quit BK. However this will be the first winter without a job, besides a few odd jobs lined up with some of my clients. I charge per mowing at the moment. I was wondering if instead it would be a good idea to charge a certain base rate per month all year round (doing simple checkups and leaf cleaning when its cold). This would produce income year-round which I need. For this to happen would the summer price drop some and i keep that rate all year or would I charge a winter rate (which I dont think people would go for). If I drop the summer price for year round payments what percentage of the original rate should it be. Also do take payments seasonally or year-round? Thank you.
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  2. jsslawncare

    jsslawncare LawnSite Bronze Member
    Posts: 1,674

    Total amount they would pay you in a year divide by 12 months= year round pay. I charge for what I do and get paid for it then I manage my money and relax during the winter. But sometimes I do get a part time job.
     
  3. Jaybrown

    Jaybrown LawnSite Bronze Member
    Posts: 1,160

    If they have a cheap price all summer then cancel when winter comes your screwed. You just worked all summer for nothing.
     
  4. jsslawncare

    jsslawncare LawnSite Bronze Member
    Posts: 1,674

    No in the final bill they pay for services you have completed. Cancel early in the year and no refund.
     
  5. Jaybrown

    Jaybrown LawnSite Bronze Member
    Posts: 1,160

    What do you mean ?
     
  6. easy-lift guy

    easy-lift guy LawnSite Gold Member
    Posts: 3,376

    Take one of your customers total amount you charged for one years service. Do you have that totaled?
    Now take that total and devide by the number 12 The amount you come up with is how much you would charge this customer or any customer per month on a year round basis. Please tell me you understand now.
    Thanks
    easy-lift guy
     
  7. cpllawncare

    cpllawncare LawnSite Silver Member
    Posts: 2,659

    Year round service is really hard to sell, I did it two seasons ago and the ones that signed up for it dropped it as soon as they got the first bill in DEC. For commercial it's much easier.
     
  8. rgodwin

    rgodwin LawnSite Member
    Male, from Buna, TX
    Posts: 56

    Yea I've thought about the risk of people stopping their payments. I would only do it with the people I trust, even though we've never had a big problem with payments we have generally loyal customers. Anyway say I was to take a risk with a few trusted customers. The whole idea is to get us more work in the winter so simply dividing the total payments by 12 wouldn't work. I was also hoping to catch their eye by making the monthly prices cheaper but being year round... in the end getting a higher revenue... if were not ripped off that is. I was thinking something along the lines of 3/4 the regular rate per month. Any ideas are welcome. I've the work ethic down. Still learning management skills.
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  9. easy-lift guy

    easy-lift guy LawnSite Gold Member
    Posts: 3,376

    Let's see if I can figure this out. Your concerned about the risk of your customers stopping their payments to you?, what about the customer not having service due to non payment to you?. What does trust have to do with establishing new terms for your customers?, after all it is your business?, correct! If your not willing to offer additional services in the winter months for your customers, stick with your seasonal business and find another job in the winter or move to another part of the country where you can work year round.
    If you have not had any formal schooling in management,supervision during the winter season may be a good time to look into taking some courses.
    Usually a CC or JC offers such courses.
    easy-lift guy
     
  10. Jaybrown

    Jaybrown LawnSite Bronze Member
    Posts: 1,160

    So let's say its $200 a month in summer then nothing in winter. 6 months of summer so $1200. Now I spread that over 12 months. Now it's $100 a month for twelve. They sign up at the beginning of summer At the end of summer they have paid $600. Now they say we want to cancel or they stop paying. That's the problem you just lost $600. The only way this would work is if they started it at the beginning of winter. I have a couple of these and that's what I do. It's like being paid for grass cutting in the winter months but I also do plowing
     

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