Lost huge account-can't compete

Discussion in 'Lawn Mowing' started by McNeal Lawn, Aug 16, 2003.

  1. McNeal Lawn

    McNeal Lawn LawnSite Member
    Posts: 61

    Since the begining of the season I have been servicing a large service station, 1 1/2 acre of lawn, of that a 1/2 acre is a rough field with tank traps requiring a trimmer to cut, 3000 linear feet of trimming, 2500 sq ft of beds narrow but long, and to top off the property a bpm for drainage. To service this location requires 6 total manhours each visit to service, the property was on a 10 day service cycle, I have been charging $160.00 a service visit.
    Last week the owner called informing me that he has given the property to another company, later I stopped at the station and had a long discussion with him, during which time he told me that the new company will be servicing the station for $160.00 a MONTH , $1920.00 a year. With weekly visits during the growing season, which comes out to about 35 visits a year. That is about $55.00 a visit. Now I haven't been in this business as long as some of you, but for the life of me I can't see where the other company can even pay wages at $55.00 a visit. Even if there are numerous add ons over the year, I can't figure where or how the expenses of the service visits could be re-couped. Does anyone have any thoughts or ideas on this situation. Thanks.
     
  2. grshppr

    grshppr LawnSite Senior Member
    Posts: 301

    I wouldn't worry about it. The new guy will probably realize he is losing money on the contract, or will do a substandard job to make up for the loss of money. Plus at $160 for 6 hours you were only making $26/hr any way. Wait until they call you back when the new guy backs out and raise your hourly rate.
     
  3. Albemarle Lawn

    Albemarle Lawn LawnSite Bronze Member
    Posts: 1,544

    and, as grasshopper said, at $26/hour you were low anyway. Way low in my opinion.

    Think about it, if you were at $26/hour every day for 8 hours, or $208 per day, also known as $1048/week, or $35,000 or so per year in a 35 -week season, would that cover your costs and pay you a living? NO!!!

    You'd be better with a $20,000 year modest job that offers some type of benefits.

    KB
     
  4. GLAN

    GLAN Banned
    Posts: 1,647

    Lossing a big account sucks............sorry for you.

    I just might be a blessing.

    They may call you back..........so you go back with a modest increase cause your know your going to have do more work doing and correcting what the scrub messed up.


    Or you take on work that is more profitable for you. Now you can.....;)
     
  5. Creative Lawn Care

    Creative Lawn Care LawnSite Senior Member
    from NC
    Posts: 271

    Gotta agree with A. Lawn that was not a huge account. Two years ago I lost an account that i had been doing for four years. The account was for over $70,000 a yr. The customer was not displeased with my service I simply got underbid by $15,000. I was like you and have no idea how they could come out undercutting like this. They lasted about 2 months. Think they have been through 3 more companies since then.
     
  6. hubb

    hubb LawnSite Member
    Posts: 192

    "Huge account" is relative to what his other accounts are. That is a sizable account to lose. Sorry to hear about your lose.
    Last year I lost an account that was about $56,000 gross. It was my only account. I was doing 7 apartment comlexes for one company. I lost it in august too. I was ready to quit, sell everything. They also cheated me out of about 2800 dollars in the end.
    But I just had to buck up and struggle through this year. I have a different plan of attack now.
    Good luck and if they call you back to do the account, I would raise the price considerably.
     
  7. TurfGuyTX

    TurfGuyTX LawnSite Senior Member
    from DFW
    Posts: 648

    I'm sorry to hear of your loss. Some companies either don't know that they'll lose money on it, or plan to get the contract no matter what and make up for it later. Like others say, if and when they call you back, raise your price. Also, was there anything you could've done to be more efficient to cut down on your costs? Just curious. Good luck.
     
  8. GLAN

    GLAN Banned
    Posts: 1,647

    hubb

    you doing OK now?


    Regardless of what the lower price was they should have at least allow you to finish the year.
     
  9. McNeal Lawn

    McNeal Lawn LawnSite Member
    Posts: 61

    TurfTex Guy. the property had a layout which restricted the use of my 50 inch WB. which was used on the open areas, a 36 WB was used near the long narrow beds, I try eliminate time whenever I find a quicker acceptable way of servicing a property. As someone said "huge account is relative" but losing $500.00 to me a month is a bite, but being in this business we just move on looking for a replacement property.
     
  10. J&R

    J&R LawnSite Senior Member
    Posts: 835

    Sorry to here they did you like that. In the 20 or so years i been in the Lawn Care i have lost very large and small accounts. it hurts your pocket book and your pride. I also must say i have dropped large accounts too. This is what i tell any one thats drops me than 2 month later call be back. I will return only and i mean only if your sign a 10 year contract with a 5% increass per year. I have 3 that has done this.
     

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