Questions about flat monthly rates

Discussion in 'Lawn Mowing' started by Sir mowsalot, Dec 31, 2005.

  1. Sir mowsalot

    Sir mowsalot LawnSite Senior Member
    Posts: 310

    2006 will be my first year of getting away from the per cut basis. Im going to start with the flat monthly rates. Starting the flat monthly rate from the beginning to the end of the season is easy. I take the amount of cut times the #of cuts in a year, the amount of Fert. and aerates, and then divide by 9 monthly payments (1st pmt. April 1st-Dec.1st). Here is my question though. How do you determine the monthly rate when you pick someone up in mid season? Do you add everything up from that point until the end of the season? And if so, then the following year, the monthly rate would be different becuase you would be starting from the beginning of the season, right? Does anyone have a way in which you could pick up a new customer mid season, and somhow keep the same monthly rate for the next full year you have them?
     
  2. Green-Pro

    Green-Pro LawnSite Bronze Member
    Posts: 1,420

    Why not make the payments spread out over the whole year 12 months?

    I guess if you pick someone up mid season I would just figure it up as for the whole season and begin charging i.e. they start in June, figure the per monthly rate for the whole season, bill that form June on out.
     
  3. Jpocket

    Jpocket LawnSite Silver Member
    Posts: 2,278

    How many customers do you expect to lose?, because everbody isn't gonna go for this.
     
  4. stumper1620

    stumper1620 LawnSite Bronze Member
    Posts: 1,889

    I offer 4,6,8,10 & 12 month pay plans, alot of my clients want quarterly pay, depending on the services desired I determine what pay plan, I try for 12 pay on all full lawn & snow accounts, 8&10 pay for mow & 4 for snow only 6 is an option for those that can't afford the 4 pay in the winter, (so far working very well) the way I go with 12 pay is your sign up date is your 12 month term, If you sign on in july, then your year ends the following july with an auto renewal unless I am contacted in writing 30 days before the cancellation date, no refunds of current month payment and per cut charges apply for early cancellation. trying to skip a month or 2 by cancelling and resigning has a screw you clause that states the agreed price will increase 40% for trying to sidestep the 12 pay design. (cant have them skipping out of the easy season)some one that is not interested in going a full year is not of interest to me anyway, I want steady work not half a season.
     
  5. stumper1620

    stumper1620 LawnSite Bronze Member
    Posts: 1,889

    I haven't lost a desirable client yet, those that don't like it are undesirable.
    I leave them for fish food, the lowballers can have em. 1 cut a month is not my idea of a desirable client.
     
  6. Green-Pro

    Green-Pro LawnSite Bronze Member
    Posts: 1,420

    Its not like your holding a gun to their head and saying pay 9 months or else. I started to offer three different payment options, mainly because several customers expressed a desire to pay bi-yearly. They don't want to be hassled with being invoice each month. Still others have opted for a 12 month or yearly payment plan. We still have some that simply wish to be invoiced each month of service.

    When customers expressed interest in different payment options we developed a system and sent letters out to all full service accounts giving them the flexibility to select the payment option they desired and best suit their needs.

    Offering payment options need not be a negative idea to shy away from just because you don't feel it will be well received, theres a right/smart way to present the bait and a wrong way. Presentation is the key IMO.
     
  7. stumper1620

    stumper1620 LawnSite Bronze Member
    Posts: 1,889

    I Agree,
    I was concerned starting out with monthly service, not per cut service, as I talked to customers to feel them out I found my best clients were very receptive and the ones that were'nt, were my EOW or worse, no great losses.
    I also, made up for the lost customers just from the other weak clients that went monthly because of the actual annual increase in revenue I received from the increased commitment from the EOW customers.
     
  8. Landscape25

    Landscape25 LawnSite Member
    from Florida
    Posts: 199

    More power to you guys that would drive me crazy, all those different payment plans. I guess the Quickbooks helps but it would be confusing to me.
     
  9. stumper1620

    stumper1620 LawnSite Bronze Member
    Posts: 1,889

    nothing like knowing what the income will be per month for the next 12 months, at least I don't have to worry about drought or rainouts. covered either way. monthly rate is still the same.
    storm clean ups, fert. ect are all billed seperately so the income still fluctuates but it always has a minimum.
     
  10. Landscape25

    Landscape25 LawnSite Member
    from Florida
    Posts: 199

    Right now I just bill as I go. I offer maintenance but no lawn service and it is year round here so it is a different situation. I leave the invoice at the time of work or I get paid when there. So for maintenance I know what I will be paid for the year, if all goes well of course. I would like more maintenance accounts because you never know when you will get other jobs. I might add that I have a set charge for maintenance. It takes longer in the summer, less in the cooler months but the bill is the same regardless.
     

Share This Page