Is this typical when dealing with commercial accounts?

Discussion in 'Lawn Mowing' started by thefed, Feb 29, 2008.

  1. thefed

    thefed LawnSite Senior Member
    from Ohio
    Posts: 350

    I'm putting a bid in at a property that is quite huge....and we've never dealt with such a thing. The few commercial properties we maintain were off-shoots of residentials....so no formal proposal process.

    This one is through a friend of a friend, so we have a small edge. The thing I'm wondering is if it's typical/acceptable for them to set the payment terms? The guy showing us around said they pay 60 days afterinvoice (Net 60), if we give a 2% discount they pay in 30 days, 3% discount for 15 days, 5% discount and they pay same day.


    Would it be unprofessional of me to state in our proposal that OUR payment terms are 15 days...period. Or maybe extend it to 30 for them?


    Also,what format does one usually submit said proposal in? Residentials are a bit different....so im just wondering...

    thanks
     
  2. Raven386

    Raven386 LawnSite Silver Member
    from CT
    Posts: 2,160

    I'd say give them your terms... but if it comes down that you wont get the contract maybe just deal with the 2 % discount...just add enough to the price of cut to make it up in the end...
     
  3. IMAGE

    IMAGE LawnSite Bronze Member
    from midwest
    Posts: 1,134

    I would just build it into the price also.
     
  4. Grassbuster

    Grassbuster LawnSite Member
    Posts: 117

    In all my commercial accounts they always set the payment terms. They need to feel they are in control........I do agree 60 days is a bit much but they did offer you options. Mine are 32 days. At first I hated it, however after many years you know that the check is in the mail on the 30th day. Good luck
     
  5. thefed

    thefed LawnSite Senior Member
    from Ohio
    Posts: 350

    I dont want it to be a sticking point of course....but i got the feeling that it was more 'this is the way it is'


    The guy is pretty cool with my partner,and said it takes 2 guys 8 hrs, and 4-5 guys 4-5 hrs..... I have NO guess on the acreage.....it's pretty wide open with minimal trimming....but there's a lot of grass.
     
  6. IMAGE

    IMAGE LawnSite Bronze Member
    from midwest
    Posts: 1,134

    So your bidding on it not knowing the size or your costs? At least measure it and get a better estimate of your time involved.

    5 guys x 5 hours is 25 hours
    4 guys x 5 hours is 20 hours
    2 guys x 8 hours is 16 hours

    9 extra man hours on that job every week would kill your profit. Also, sometimes "the guy" really has no idea how long it takes, or what equipment they were using. They may of had 72" Z's and if your using 52" Z's well, there go some man hours too. You may want to run more numbers (any numbers by the sounds of it) before bidding.
     
  7. Albery's Lawn & Tractor

    Albery's Lawn & Tractor LawnSite Bronze Member
    Posts: 1,675

    Thats normal. Like another already said you figuring the interest or penalty, whatever you want to call it, into your bid. Showing them YOUR terms isn't going to do anything, and chances are if they see that, your bid will get thrown away no matter if your price was lower. Commercial work isn't for everybody, but it can be profitable. Good luck.
     
  8. Flex-Deck

    Flex-Deck LawnSite Silver Member
    Posts: 2,846

    I have one commercial acct. that deducts 2.5% for a 15 day pay. Normally they are 90 day after invoice. A couple of others make the adjustment, and pay in 15 without a deduction. Either way - I do not like waiting 90 days. It is well worth the deduction, and come to think about it, I bid it high enough that it is ok.
     
  9. Daily Lawn/Landscape

    Daily Lawn/Landscape LawnSite Senior Member
    Posts: 694

    Bid your commercials with a little extra in the basket and offer a discount at 15 & 30 days You will get your money a lot faster in most cases.
     
  10. lawnman_scott

    lawnman_scott LawnSite Fanatic
    Posts: 7,547

    I have never had anything like that, even a govt contract, but I would just work it into the price.
     

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