I Need a Plan "B"

Discussion in 'Business Operations' started by Tn Lawn Man, Dec 28, 2006.

  1. Tn Lawn Man

    Tn Lawn Man LawnSite Senior Member
    Posts: 479

    Here is the background.

    Currently, I bill at the end of the month. I accept checks and credit cards. Those who wish to pay via credit card go to my website and pay via paypal. So, I do not have access to their numbers.

    One thing I am getting sick of is late payers and deadbeats. So after reading various threads on LS and talking to other business owners in other fields I am going to try to go to a credit card only business where I get the customers credit card numbers and charge them myself at the end of the month.

    Here is the problem. Based upon my experience and my geographic area I think there will be a number of customers who will not do business with me if I went to a CC only system.

    So, I want a backup plan. Something that will help ensure prompt payment and keep me from getting ripped off.

    I have tried prepay, pay each week and a few other types of billing but for various reasons they do not work. (that may be another thread all together)

    Do any of you have any "Plan B" ideas for me?

    Currently, the best option I can come up with is a "deposit". i.e. If they do not want pay with a credit card then they must give a deposit to be held until the end of the season or until termination of service. I do not know if this will go well or not.

    Ideas, thoughts suggestions?

    Thanks much everyone.
     
  2. HOOLIE

    HOOLIE LawnSite Gold Member
    Posts: 3,981

    What I've found is it's pretty easy to get NEW customers to go along with what you want billing-wise...current customers are much harder to convert. You could perhaps offer some options...CC billing at month's end OR prepay by check monthly. Yeah I have the same problem the longer I've been in business the more I run into slow payers.
     
  3. jsf343

    jsf343 LawnSite Bronze Member
    Posts: 1,767

    we do pre pay's and post pay's and it really makes no difference. If they are dead beats they will miss payment either way. We put everyone on contracts and spell out what will happen if they are late with payments (late fee,stop of service to name a few) If they are late I start calling right away. usually it was just forgetting to send the bill or something like that. However you always will have 1 or 2 that are really deadbeats. We send 4 collection letters to them (olddebts.com works GREAT!)to establish that we have done all we could to get our money if that doesn't work we go to small claims court. Keep your trail of paperwork for back up in court and most of the time you will win. Does that mean you will collect? sometimes yes sometimes no.
    Also very good to have a friend named Rocko.:laugh:
     
  4. carcrz

    carcrz LawnSite Silver Member
    Posts: 2,085

    half way through the year, I started blling at the beginning of the month & due on the last day of the month. 1 bill instead of 4 or 5. The older customers especially loved it because it was easier to keep track of their bills. If they were home, I gave them the bill when I started mowing & stopped back for the month's check when I was done = prepay!
     
  5. Tn Lawn Man

    Tn Lawn Man LawnSite Senior Member
    Posts: 479

    I have tried prepay but like JSF says if they are slow payers then they are slow payers.

    With prepays we would hit the end of the month and no payment. So, we would stop service. Then they would return our phone calls and want service started.

    Of course, this would be after a week or two and the grass would be tall. We would charge an extra fee but it still would not be as much as if they would have not had service interrupted to begin with.

    I am tired with all of the games.
     
  6. cornerstonelawn

    cornerstonelawn LawnSite Member
    Posts: 13

    I do not have any solutions yet but I would like to add some food for thought...Just in case someone out there more capable than I am is reading.

    Wouldn't it be great if we had some sort of dead beat database oraganized by regions or cities; whereby we could look to see if someone was a deadbeat payer.

    People who have bad credit end up in the long run paying higher Int% rates than everybody else because of credit. Why not higher cut rates for being a bad customer.

    If this could happen then great ... the only other problem would be getting other mowing guys to use it which is sometimes hard to do because we always come accross as desperate or they feel I am trying to steal their business.
     
  7. Lawntime Mowers

    Lawntime Mowers LawnSite Member
    from KC MO
    Posts: 219

    I would love to tell the whole damn world who my dead beat customers are....but as you pointed out it wouldn't work unless everybody was on-board and it's probably illegal also.

    I remember when I was a kid, a small local store would display bad checks at the counter. The check writer would be so embarrassed that everyone could see it that they almost always made good on it.
     
  8. gqnine44

    gqnine44 LawnSite Senior Member
    Posts: 501

    How about this...

    Customers who would rather send a check at the end of the month are required to keep a credit card on file that will be automatically billed if payment is not received within 30 days. This will have to be spelled out in their contract and made clear. This way they have the option to pay cash but you have the protection of credit in case of a slow/no payer. This is somewhat similar to what hotels or rental companies do.

    What do you think?
     
  9. Tn Lawn Man

    Tn Lawn Man LawnSite Senior Member
    Posts: 479


    I really like this idea. I think it has potential.

    But, what about "paranoid Bob" who gives his CC number to nobody? Is there a payment option for him?
     
  10. Lawnmasters

    Lawnmasters LawnSite Member
    Posts: 180

    Yes, I give Paranoid Bob his very own payment plan.... Half down, and the rest NOW
     

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