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payment issues

Discussion in 'Business Operations' started by pete edwards, Aug 19, 2012.

  1. pete edwards

    pete edwards LawnSite Member
    Posts: 9

    It's my second year in business and just found this site this year. I'm currently serviceing 60 to 70 yards a week with one helper. Business is growing quickly but i'm starting to have some customer collection issues. I will try to resolve this next season with contract only customers but I'm not sure that will fix the problem completely. 99% are good and look out for me but I'm really gettin soured by that 1%. Somehow it eased my mind a bit after reading a ton of similiar posts by people having the same issues. I thought it was just me. I had a customer come out this week and slam me and my service and it looks like now it may turn in to a no pay. Property was seviced a 100% and on time. Then I learned she was not currently working. Why don't they just be upfront and honest. I did nothing wrong she just does'nt want to pay. Still it really got under my skin.
     
  2. coolluv

    coolluv LawnSite Gold Member
    from Atlanta
    Posts: 3,501

    I had the same problem when I started... but it was more than 1%. More like 30 to 40%. Solved that with service agreements. If you don't come off as a legit business then you get no respect. Not saying you. If you just show up give a price and then start servicing then they have no incentive to pay. No fear of retribution so to speak.

    The agreements for me have been a scumbag reducer. Scumbags won't sign an agreement because they know you have a legal document to go after them...even if you never do it still puts the fear in them that you can. I found that if you eliminate the bi-weekly and have an agreement you eliminate most if not all scumbags and no payers.

    Not the customers I want. Slower growth but better growth and more profitable in the long run.

    Dave...
     
  3. easy-lift guy

    easy-lift guy LawnSite Gold Member
    Posts: 3,376

    Dump your 1% now and start all present and future work by service agreement only.
    Don't squander emotional capital on the 1%. Move forward and get out of the holding pattern now.
    easy-lift guy
     
  4. Landrus2

    Landrus2 LawnSite Platinum Member
    Posts: 4,811

    I see a case for small claims court?
     
  5. easy-lift guy

    easy-lift guy LawnSite Gold Member
    Posts: 3,376

    Why and against whom?
    easy-lift guy
     
  6. Duekster

    Duekster LawnSite Fanatic
    from DFW, TX
    Posts: 7,961

    That is human nature. Hard to face up to the fact you can not afford something.

    You will also catch people that upset you. I am only so good with these types of people for so long before I say something.

    You should go visit with one of your better clients after such an event to help you remain focused. There is nothing you can do to avoid these people as long as you are in a client relationship. Just be thankful you are not in a cubicle sitting next to them everyday :laugh:


    I would not see contracts service agreements (SA) as the cure all either. I have very few frankly and they do not mean much IMHO. The benifit of SA is if they are a good client, they want lots of service and you are willing to give a flat monthly rate to them.

    Having said that, this year I have noticed more and more people are right out sayin, we can not afford more than bi-weekly service. Mowing lawns is something they could do themselves, it is a luxury. Many People have not had a raise in 4 years and prices are going up. The squeeze is on.


    Some People are just A-Holes and want to cheat everyone.
     
  7. coolluv

    coolluv LawnSite Gold Member
    from Atlanta
    Posts: 3,501

    Not arguing with you...just my point of view. I also find that when you bundle everything in a service agreement you sell more services and you get the most out of each customer.

    So for me a service agreement is very valuable in that it for the most part eliminates the scumbags while also increasing revenue per customer acquisition. Plus it puts me in control of time of services such as bush trimming weeding, fert applications etc. I don't have to show up and see the fert guy there spraying when I'm there to mow.

    I don't have to wait for the customer to decide to clean up the bushes when they are now out of control. I don't have to wait for the customer to decide the leaves need cleaning up when they reach the bottom of the window sills.

    More control for me, better scheduling, more profit per customer.... steady monthly income...better budgeting of money and time and on and on....yeah I see no benefit with service agreements.

    Dave...
     
    Last edited: Aug 19, 2012
  8. Duekster

    Duekster LawnSite Fanatic
    from DFW, TX
    Posts: 7,961

    To the point of people admitting they do not have money. Most people will do not say that directly, they complain or moan about service or something. I was just noting that it seems more and more people have just come right out and stated it.

    I am not saying that SA's do not have value, I have them too. I just do not push them on people right off the bat. Not everyone wants a bundle and I do not push the issue.
     
  9. coolluv

    coolluv LawnSite Gold Member
    from Atlanta
    Posts: 3,501

    Quote: I would not see contracts service agreements (SA) as the cure all either. I have very few frankly and they do not mean much IMHO. End Quote.

    Ok..maybe I mistook what you said.

    I try to do more pre-qualifying over the phone. I ask some questions and then I tell them basically how it works and most times that tells me whether we are going to be a fit for each other.

    Eliminates the wasted time and running on estimates for a price shopper or cheap @SS. My service agreements are flexible on what services you want. If they don't want fert because they are happy with their fert guy then so be it. Its not a deal breaker for me.

    If they like to take care of their own landscaping....no problem. Prices go up and down...monthly cost depends on the services they choose. That way everyone is on the same page. I will also state again that most think an agreement is assurance you are going to get paid..not really and unless its for a large amount of money I'm not going to wast the time going to court.

    Plus I don't let a customer get to the point of owing me money that the amount would justify taking them to court.


    Dave...
     
  10. Duekster

    Duekster LawnSite Fanatic
    from DFW, TX
    Posts: 7,961

    Here is my thinking. First thing I want to do is get them as a paying client. If they have over grown beds, shrubs and lot of work to do. There are many reasons for this but I try not to judge. I want to get paid to clean them up at a fair price.

    Additional services often generate more profit than mowing for sure. If I bundle those the price seems higher to the client. If I do it seperately then they are not as bothered. I then can go back to them and present a bundle after the site is up to standard. They are comfortable with us, we are comfortable with them ( paying) and I have not had to scramble or invest a lot up front on a contract.

    I then will offer a maintenance price but typically in the second or third season. I also like to get then rolling in mid summer.

    On the otherhand, I go to an estate house or ranch and the place is well cared for, little neglected and there is only maintenance.... then I will propose a service agreement.

    I have residential units that gross more than small commecial clients. We are pushing 6 to 10K a year.
     

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