my first pre-pay

Discussion in 'Lawn Mowing' started by greenman, Apr 2, 2003.

  1. greenman

    greenman LawnSite Addict
    Posts: 1,405

    Well, I just got my first pre-paid contract. Dont know if thats good or bad,lol. I like the money up front, but wont like the maintenance knowing that the money has been spent and gone. Its an annual contract for mowing maintenance and applications, pre paid in full. I just hope I will come out good on it. They got a disount for sure. Now if I could only get 50 more like that.........:rolleyes: :)
     
  2. cajuncutter

    cajuncutter LawnSite Senior Member
    Posts: 626

    Congrats. I know what you mean on the prepay and now dread doing it. I currently have no pre pays and frankly never want them. I keep my service in the rear and bill out at the end of the month..it is the best way to go. It seems to feel more gratifying
     
  3. Navig8r

    Navig8r LawnSite Senior Member
    Posts: 477

    I don't plan on any contracts until maybe next year.... question for those with them though.....

    Do you ever do a plan such as 1/2 payment up front, then a small monthly payment? if not, what works best?
    just curious
     
  4. cajuncutter

    cajuncutter LawnSite Senior Member
    Posts: 626

    I only have one commercial contract and it is written. All others are verbal and this is how it goes
    x= how much you would charge
    y= average number of visits a year

    x * y = z the total amount for the year

    z/ 12 months = monthly payment

    I do not know how all states are but here in Louisiana we have old Napolianic Law and a hand shake in most cases is as good as paper. I explain if we get canceled they will either pay the balance of the number of visits or be refunded accordingly. Fortuneatly I have not been canceled so I have not had to cross that bridge. Also take note of the trees and what type of fall clean up you will be doing. We charge by the bag you may want to do that different.
     
  5. greenman

    greenman LawnSite Addict
    Posts: 1,405

    For maintenance, no. For an install or landscape job,yes, 50% pre-pay, the remainder is billed upon completion.
     
  6. Popsicle

    Popsicle LawnSite Member
    Posts: 189

    How do you handle a year where you may have more service calls than average? Or less? Do you operate on a system where they could receive a bill or a credit at the end of the year?
     
  7. 65hoss

    65hoss LawnSite Fanatic
    Posts: 6,360

    I picked up a new maintenance customer today. She asked if it was ok to pay me for the entire month each month, up front. Duh. :D
     
  8. cajuncutter

    cajuncutter LawnSite Senior Member
    Posts: 626

    No there is no credit issued at the end of the year. Lets say I get sick or for any other reason than bad weather I will issue a credit to a customer or customers that will reflect in that months statement. I do explain if there is a wash out and the grass is growing at a fast rate that if the customer is skiped one week and we come back the next we have to pretty much do twice the work. More or less chase excess thatch etc. All but 1 customer I have had for over 4 years and it has ballanced out. One year there may be 43 visits but they only paid for 42, I do not sweat it. Lets say the next year I may only make 41. I have had only 1 complain from a customer and the reason was her back yard holds water. We had about 3 weeks of rain with only 1 or 2 days of "dry weather. We were unable to cut her back yard even with the smallets 21 inch push mower. She felt like she was not recieving service she paid for so I gladly gave her a discount for the month. After that I have had no problems. I guess it is one of those deals where one says.."works for me"
     
  9. bobbygedd

    bobbygedd LawnSite Fanatic
    from NJ
    Posts: 10,178

    we always get pre pay. helps to have cash flow, and waiting for your money sucks. its also nice to have some "leverege" should there be any problems.
     
  10. JimLewis

    JimLewis LawnSite Fanatic
    Posts: 6,842

    I am assuming by "pre-pay" you mean you were paid for an entire year, in advance. I don't think everyone who replied understood that.

    Anyway, yes, those are nice. I started, like you, with just one. Then another person did it, and another, and so on. Now, we get about 12+ per year. And they are pretty evenly spread out. I get one or two every month. It's nice getting a big hunk of cash all at once. And I don't mind at all doing the work for the remainder of the year, knowing I've already spent the money they paid us.

    We have several clients who just pre-pay every single year - the entire year. Just got paid from one of them yesterday. Gotta love it!
     

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