Question about cancellations

Discussion in 'Business Operations' started by exmarkking, Jun 27, 2013.

  1. 32vld

    32vld LawnSite Gold Member
    Posts: 3,984

    There is no free lunch.

    Many LCO's before you have done this 12 month average billing. They think it will get customers to take the bait and sign up. Like new car dealers do with car leasing.

    Then time and again LCO's come here with the story of how the customer cancels half way through the season. LCO is left doing more work then they got paid for. Hence the LCO is left holding the bag.

    Car dealer's are much slicker with leasing they dazzle the sucker, er, I mean the customer with low monthly pricing then they bang the leasee's wallet when the car gets turned back in.

    Problem is people will not try a reverse bait an switch with the car dealers because the dealer's have pockets deeper then the leasee's and will have their lawyer ream the leasee that would try to cancel.

    Home owners are not intimidated by small LCO's so they will agree to a 12 month lower average price up front to get work done cheap and plan to cancel half way through the season.

    I see nothing to gain doing average billing. I do the work I want to get paid this month not get caught up 12 months later.

    Average billing attracts the scammer's and or those that can not afford to pay for what they purchase.
     
  2. grass-scapes

    grass-scapes LawnSite Bronze Member
    Posts: 1,552

    In my contract:

    If the customer cancels before the end of the term, customer will be responsible for payment of non-discounted charges for work completed to the date of cancellation."

    In other words, if you would normally charge mrs jones 50 dollars to cut her lawn and 200 each to prune her shrubs in June and November, and 45 for each fertilizer application, and 300 for aeration and seeding...but you offered her a discounted price of $2500 for the year or 208.33 per month, and she cancelled at the end of october, she would owe....

    January $45 for winterizer
    February $45 round 1
    March $100 for 2 mows
    April $250 mowing (5 cuts) and $45 Round 2
    May $200 mowing $45 Round 3
    June $200 mowing $200 Pruning
    July $200 mowing $45 Round 4 (lime)
    August $250 mowing (5 weeks)
    Sept $200 mowing $45 Round 5 $300 Aeration and seeding
    October $200 mowing

    Grand Total of $2370.00 minus what she paid you January through October of 2083.30 so she would owe you $286.70
     
  3. exmarkking

    exmarkking LawnSite Bronze Member
    Posts: 1,012

    Thats hilarious that you call my system a scam. I add up every service for the year and devide it by twelve. The only difference is I'm not starving thru the winter. You act like I came up with this system for customers "to take the bait". There isn't any bait. Brick man does this billing as well. Works for them. It works great, I just need to know how to word the cancellations so that they know that they will be liable for extra services not paid yet. No one asked for your opinion on this method, I asked for a solution to canceling
     
  4. ReddensLawnCare

    ReddensLawnCare LawnSite Bronze Member
    Posts: 1,652

    The above is considering you have proof with service dates that you completed the above. I have almost all year round and this is how i do it. My minimum is 200/month all inclusive except for mulch or pine needles. If the property is in bad shape they pay a cleanup fee then the contract starts. This is the first deterent for most chap customers. After that they pay one month in advance. Second deterent. My contract states a 2 month written notice shall be given if customer wishes to cancel. Third deterent. If they sign in the spring and cancel in the fall the penalty is equal to the number of months remaining in the contract X the monthly price. Fourth.

    So if i was in your situation i would go ahead and trim the hedges. You know she is going to cancel. Get a cancellation fee. Also, you may get her back if you handle this correctly. Pm me if you have more questions
    Posted via Mobile Device
     
  5. jsslawncare

    jsslawncare LawnSite Bronze Member
    Posts: 1,674

    Here's an idea, works great for me.
    1. Work
    2. Bill customer for said work.
    3. Check mail box for check.
    4. Deposit check into bank.
    5. And this is IMPORTANT!
    Manage your money.
    I've been doing this a while and have only had 1 contract.
    I really only work about 9 months out of the year, I'm married with 3 kids my wife has a part time job. And besides if they don't have the money to pay you a contract won't do a thing. Because after winning your case in court, you still have to collect.
     
  6. vegandude

    vegandude LawnSite Senior Member
    Posts: 450

    I have only one customer that I will do any sort of contract on, the rest are billed every fourth mowing. The contract I will only carry for ten months and only has shrubs, fert, and mowing in it. All other services are as they ask I do the work and then Bill them.
     
  7. exmarkking

    exmarkking LawnSite Bronze Member
    Posts: 1,012

    I think we got off topic a little here. I could care less about contracts, its not about getting money because I know first hand you can't drain blood from a turnip. If the customer doesn't have money, no contract will make them pay. It's about scheduling, budgeting, and consistently. I put everyone on a set schedule, set pay, because it made my billing simple. It would be a nightmare to have 100 customers all on different schedules, different prices, different services. So when I meet with a customer, I tell them what we offer and they tell me what suits their needs/budget. This way I don't have to keep track of all these little things. I know that in certain months I go every week and certain months I prune shrubs etc. It has made my business simple all while making more money and the properties look better. Like I said, I don't care about contracts, that's why I don't make people sign them, but I got to thinking about how to avoid someone canceling mid season and losing, some money, not much though. And before someone says I'm contradicting myself by saying I'm making more money and then losing some, the reason is I'm selling them a whole years worth of services verse them telling me that they only want me to come once a month, don't prune shrubs, don't edge, only blow off, type thing. I have a game plan and can schedule the whole year by doing it this way and the customer feels more comfortable about their property being maintained. I don't let the customer tell me what they want, I tell them what the property needs. Also keep in mind, this is only maintenance, every other service/install is billed at time of service a lot of times with 50% down if materials are involved.
     
  8. fastlane

    fastlane LawnSite Senior Member
    Posts: 347

    Using the 12 payment system the amount that you are paid each time and the amount of services provided can be different.If they cancel after 3 months they owe you for the prorated services you preformed.(not 3 out of 12 payments) The 12 months is only a payment plan. This must be explained at the start.
     
  9. exmarkking

    exmarkking LawnSite Bronze Member
    Posts: 1,012

    Yes You are right, maybe I need to tweak my policies, and explain that better.
    Posted via Mobile Device
     
  10. 205mx

    205mx LawnSite Silver Member
    Posts: 2,342

    We say "if service is cancelled for any reason, completed work will be prorated and subtracted from your amount paid to provide a final amount"
    Posted via Mobile Device
     

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