Interesting situation...Opinion needed..kinda long.

Discussion in 'Lawn Mowing' started by Liquidfast, Nov 9, 2006.

  1. Liquidfast

    Liquidfast LawnSite Senior Member
    from Ontario
    Posts: 739

    My partner relies on this site for info and machine recommendations etc. He and I have had a discussion and are looking for unbiased opinions. This is the FIRST time I have ever posted in a forum so please be patient.

    My partner (Liquidfat) and I were offered a contract for 13 commercial properties. The payment for these are $3500 per month for all 13. Some properties will literally take 5 minutes to complete (lawn cutting....2000 ft of cement to every 1 ft of grass), some 15 and all are within 10 minutes drive time. All properties can be finished in 1 day. So my partner was told we have them 100% starting this winter and not to take on any new accounts due to snow removal being 100 times more demanding than lawncare.

    Long story short, the contracts fell thru (sort of). The owner of the properties father sees us and assumes we were too young to perform the winter portion. He assumed we were 23-25 and are actually 25 (me) and Liquid 33.

    The owners son (the one in charge) brings us into the office, explains the situation and stresses the fact that due to municipality regulations etc. he wants last years guys to finish this last year and after we get to know the properties thru spring/summer, we take over the winter contract as well.

    Sitting in the owners office, he cuts Liquid a check for $1000.00 for the "problem" and signs a 2 year agreement from april 15/07 to april 15/09 and increase the $3500 monthly fee to $3750. He really likes the work we do.

    Liquid takes the check and agrees!!???????????

    My side: We gave away 85% of our customers to accomodate HIS properties. We could have lost our shirt if we didnt (as liquid says "Put all our eggs in one basket"). I say to give the check back and have him pound sand.

    My side (Liquid): He showed he was serious by giving us the check and increasing the monthly fee. He also gave the monthly fee dated Feb 15, not April 15! These properties are a joke to do...smaller than postage stamps but the one fee is year round + salt in the winter. He also gave us a $350 month budget to buy whatever is needed without his approval over and above the $3750. I say keep the props and deal with it.

    Today, we signed on 3 new accounts that are 2 minutes from home totalling $1500 per month....not the winfall we expected but with the other properties and now these 3 new ones, we are back to profiting.


    Bottom line.....KEEP OR DROP EM???
     
  2. FIRESCOOBY

    FIRESCOOBY LawnSite Senior Member
    Posts: 981

    I am really new in this, so take it with a grain of sand.

    If ALL properties can be done in one day...then you're talking about a little over $900 for one day a week. To be honest...I'd LOVE to have something like this year round. If you work 10 hours that day...that's $90/hour for that day...so figure $45/hour each. The days I work I count my time form the time I leave the house until I get home. I try to keep it above $35/hour. What you're talking about is year round...and I don't have that. I realize that they sort of
    "screwed" you guys, but can you make up that figure easily with other accounts for the same money and very similar work? I have a partner in a school system we do. I did make sure that I would never put all my eggs in one basket. If you do that and you lose that "basket"...well you know what happens.

    I just realized that this figure is Canadian...so not sure how that compares...but still sounds pretty decent.
     
  3. Liquidfast

    Liquidfast LawnSite Senior Member
    from Ontario
    Posts: 739



    I agree that its all good however, we bought a new vehicle, 2 new salters and another plow to accomodate this client. We didnt find out about it until last week which is almost too late in the season to gain any clients worth the time. I took a gamble and lost. I have NEVER put so much into something in the past without a contract....never again.

    Oh well, never again. I guess itcould be worse, he could have dismissed us all together.
     
  4. lawnMaster5000

    lawnMaster5000 LawnSite Senior Member
    Posts: 589

    I think you already know everything that can be said.

    - Dont put all your eggs in one basket
    - Dont Invest in equipment/staff until you have the contract in hand
    - BE HAPPY, you have a seemingly nice two year contract

    You have NO again NO advantage to dropping this client. Take the contract for the next two years and be glad. Find what you can for this winter.
    If the spreaders and such havent been used would your dealer let you trade them for a future purchase if he keeps a small deposit?
     
  5. LLandscaping

    LLandscaping LawnSite Bronze Member
    Posts: 1,016

    In my opinion it is never smart to rely on one company for all your work. What happens if there is a disagreement? I would have a signed contract before I bought any equipment for the job.
     
  6. JJLandscapes

    JJLandscapes LawnSite Senior Member
    Posts: 682

    sell the equipment u dont need anymore
     
  7. topsites

    topsites LawnSite Fanatic
    Posts: 21,653

    wow... lol... I'd really be laughing if it wasn't sooo much money and all...
    But... The business rule violations concern me, every red flag is in place.

    Never bank on future / expected sales: Meaning if your current equipment can't tackle it, then you're likely biting off more than you can chew. Some other stuff has been covered, but any big contract, no matter how lucrative, should never be responsible for more than 10% of your gross and resources, really <5% would be optimal but...

    I think your p needs to get his head straight, I think you see the risks of gambling, perhaps youth plays a part...

    It appears you got lucky but you don't know that until you deal with the property next year (could be it SHOULD've been 7+k / month which is why the man cuts a 1k check for 'trouble' so fast?), so there's still no telling.
    The more one side of me screams 'Go for it,' the louder the other side screams 'Watch out!' <- That's not good.

    I recently had a similar situation with the Potential to earn lots of money, and it took some time to get over the excitement... I had already transferred a few hundred dollars (note I start small) in eager (or is it greedy) anticipation.

    But in the end, I have never in 40 years made out BIG on potential crap, matter of fact, most of the time I either just barely scraped by and out with a little skin left or worse... Yeah lol, and more than a few times :cry:

    So, I transferred my money back out, and breathed a sigh of relief when it landed firmly back in my bank account.

    Do as you wish, but you got a real big warning sign telling you what's going on.
     
  8. BareFeet

    BareFeet LawnSite Member
    Posts: 31

    Hold on and just try to get some new bussiness in until the new contract starts...you cant pass that up....I would read the fine print in the contrract to make sure he cant backdoor you..also hope that htis guy does not go out of bussiness
     
  9. Liquidfast

    Liquidfast LawnSite Senior Member
    from Ontario
    Posts: 739


    Funny you mentioned the money part of it. I quoted ALL the properties and came up with a total. 3 days later, he calls and asks me to requote the properties AGAIN. Here's the thing...he didnt want me to lower the price, but rather RAISE them. I was under the impression originally that we were only going to cut the grass.
     

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