Residential Vs Commercial Account Profits/Nets

Discussion in 'Lawn Mowing' started by alpine692003, Nov 23, 2004.

  1. alpine692003

    alpine692003 LawnSite Bronze Member
    Posts: 1,502

    Wow, I've had my feet wet in commercial account and I can tell you what a difference working in a townhouse/apartment building complex is compared to a residential account..

    I've learnt that in residential you make more and you will only have to please that customer.

    In commercial account setting, you have to please 24 people because its a 24unit complex... :cry: :cry:

    All this big fuss on a commmercial account and I just realized you make significantly less in a commercial account then you do in a residential account, or is it just me??? and you will never know if you have that contract back, because next year someone cheaper could come down and take that account from you for $100 a month less!

    What's your guys input/feedback on this?
    ;) ;) ;)
     
  2. tiedeman

    tiedeman LawnSite Fanatic
    from earth
    Posts: 8,745

    that is why I don't look for commerical anymore. I like residential. Easier to upsale services to. The only thing commerical is good for is snow removal I feel.
     
  3. olderthandirt

    olderthandirt LawnSite Platinum Member
    from here
    Posts: 4,900

    Depends on what you consider commercial accounts, hoa and town houses are not worth the trouble. Office complexes are well worth it to me. There are exceptions to this, but over all thats my .02

    Mac
     
  4. alpine692003

    alpine692003 LawnSite Bronze Member
    Posts: 1,502

    Now you tell me, MAC :dizzy:

    I was servicing townhouses, low income housing.. Can you guys believe a 3-4 acre site with weekly lawn service and flowerbed maint was only $800 a month? I dont know how some people can do it?!?!? :dizzy: :dizzy:
     
  5. HOOLIE

    HOOLIE LawnSite Gold Member
    Posts: 3,981

    There's a rent-controlled apartment complex in my town, and I'm always amazed because this place always looks awesome. They must pay well. Place used to look run down until one year when it was sold to new ownership. Something like that's probably the exception to the rule. Generally the higher-profile places, like office parks, you will do better on, but you will also need to be able to do everything, mow, fert, irrigation, landscaping. If that's up your alley maybe go for one of those types.
     
  6. alpine692003

    alpine692003 LawnSite Bronze Member
    Posts: 1,502

    Oh ya, full service accounts is what I like..

    I dont get some townhouses, the one i'm working on right now is decent.. there is about 8 surrounding townhouses in one block where I am, I got asked to submit a bid for one across the street..

    I go in today and i see the current lanscaper doing that complex that I just bid on, he told me this complex was a hole. It was only $800 a month and are cheapos, he actually fired this complex.. I got the whole story from him..

    So i was like to the person who was in charge of taking in bids, this account is worth $800 and I bid @ $1050 <-- this was just making some money.. @ $800 you were looking at $300 profit a month.. I figured that out. ;) ;)
     
  7. JustMowIt

    JustMowIt LawnSite Senior Member
    Posts: 367

    We do not do commercial for several reasons:

    1. More chance to damage cars, & people.
    2. Have to be set up for flowers, mulch, sprinklers.
    3. Better chance a residential will stay with you, business's shop every year.
    4. Usually more people to babysit, requiring us to hire a foreman.
    5. Business takes a tax deduction for our work, better change of being brought into a state or Federal audit, due to customer being audited.
    6. Losing a commercial job leaves bigger holes in a route.
    7. Some require insurance limits not in our policy.
    8. Most require a special way of billing & we do all next day credit card billing.
    9. Many ride you for 60 days or more if you bill them.
    10. On larger jobs involving so many items, it would be hard to lock in a cost (we pay by the yard) & profit margin.

    Large commercial companies that are set up for all the challenges of commercial do very well, but it is a totally different ball game.
    MJ
     
  8. YardPro

    YardPro LawnSite Gold Member
    Posts: 3,563


    it can be a hassle, and as with any large gob, the margin's are smaller, but so is travel time, etc.

    we will not take on any commercial properties unless we have ONE contact person. All but one of ours ave a property manager. the other has a board member we work with.
    If any one else wants to discuss something with us, we ask them to please discuss it with the property manager/ contact person. They can head off most problems, if not then the manager will talk with us about whatever the situation may be.
     
  9. YardPro

    YardPro LawnSite Gold Member
    Posts: 3,563


    these are good points,
    and yes commercial work has down sides.
    we are very lucky in our commercial accounts. they do not take bids.
    we have been at one for 25 years. the other for 15.

    most of our accounts we hold onto. You have to be selective about the commercial work you take on though.
    the lowest bid contracts are something to stay away from. Too easy to loose money. Most of the guys that do that work already have plans on skipping some of the specified work when they bid.

    our large commercials pay every two weeks
    and we would never take on a property that requires more than three people to service.
    but they do take up alot of time.

    our largest takes 12 man hours just for the mowing, weedeating etc per visit. We mow twice per week.

    that's 24 hrs a week of mowing. +sprayingand at least 8 hrs a week of weeding. we also spent about 5 hrs a week on trash pickup.
     
  10. alpine692003

    alpine692003 LawnSite Bronze Member
    Posts: 1,502

    Wow, you guys can get your commercial accounts o pay 2 times a month like a regular job eh?

    I think the norm is paying once a month, but I think I'll change that to 2 times a month in our contract then :D

    I like that idea a lot!
     

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