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Question on my first Large commercial account

Discussion in 'Lawn Mowing' started by Oasislawnman, Apr 6, 2008.

  1. Oasislawnman

    Oasislawnman LawnSite Member
    Posts: 22

    Just landed my first large commercial account 35 cuts for 35,000. I am working on putting together the contract. I was wondering what you guys do about putting in an annual price increase, what percentage, etc. Any other things to make sure I include on the contract as well. Also how many of you have annual price increased built into your contracts with residential customers.

  2. Oasislawnman

    Oasislawnman LawnSite Member
    Posts: 22

    nobody wants to help? alright i might repost it under a different title.
  3. bigtex

    bigtex LawnSite Member
    from ma
    Posts: 151

    well its a bit strange. why you worrying about $ increases if you just landed this. every year is a new year-next year you'd send them out whatever you wanted to charge. and worry about that then. not to many people sign contracts for more than one year at a time.
  4. Frue

    Frue LawnSite Bronze Member
    Posts: 1,472

    Well commercial is generally going for the cheapest price, so if you have a price increase in mind, just make sure it is still cheaper then the next lowest bid. If it is not you will not have to worry about price increases.
  5. ponyboy

    ponyboy LawnSite Bronze Member
    from ny
    Posts: 1,415

    is it a multi year contract? You can add a line on the bottom if they sign here also next year there will be a 4% increase. We usually do between 3-5% increase each year
  6. ed2hess

    ed2hess LawnSite Fanatic
    Posts: 13,201

    If you don't even know what is in the contract how do you know it will be $35K....and if most commericial see an increase next year they probably won't even sign it if they are on the ball. By the end of the year you might find thta you are already too high.....and if they get lower bid you could drop down.
  7. Flex-Deck

    Flex-Deck LawnSite Silver Member
    Posts: 2,846

    I have a couple of commercials on 4 year contracts. The contracts are actually their purchase orders requesting my services, with the payments spelled out as to when and how much. These people do not like to deal with change in my opinion. They want 4 years laid out solid to save the time of getting bids. The time to raise you bid (and then you may lose the job) is during the last year of the contract, and perhaps you can negotiate changes that they are happy with, without them going to the bidding process. This has worked for me very well. I will say, that imo you have to be capable of providing better service than they have had in the past to make this work to the advantage of both of you.
  8. LwnmwrMan22

    LwnmwrMan22 LawnSite Platinum Member
    Posts: 4,372

    This is the same way with the school district that I do. By the time the contract is up in 2010, I'll have had it for just about 10 years without it going to bid.

    The first two contractors were worthless, never doing the trimming, barely getting the mowing done weekly.

    I then came in with the proper equipment and know-how and have always had their account taken care of weekly, with just I and my now 74 year old dad.

    I just had them renew my contract for another 2 years, even though we were already under contract for 2008. Now it's extended through the 2010 season.

    February of 2010, I'll be in doing the same, if my then 76 year old dad can keep up working.
  9. PROCUT1

    PROCUT1 LawnSite Platinum Member
    from TN
    Posts: 4,909

    When your contract is up, you will be asking them for an increase, and they will be asking you for a decrease.
  10. Frue

    Frue LawnSite Bronze Member
    Posts: 1,472

    So true so true. A man of wisdom.

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