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service agreement

Discussion in 'Starting a Lawn Care Business' started by ChadsLawn, Jun 27, 2006.

  1. ChadsLawn

    ChadsLawn LawnSite Bronze Member
    Posts: 1,110

    Im not sure how to explain this. Ill give you an example.
    Most of my past customers were all on a monthly pay. Its all fine and dandy untill the winter comes and it all slows down. Here what happens, I still show up, but now its everyother week. I've had a few come to me and tell me they want to go on a pay per cut, since Im not here everyweek.
    My question is, does anyone have a service agreement that explains the differance between monthly and pay per cuts. hmmmmm maybe not the best way to explain...

    well hell.. does anyone have a service agreement handy?
  2. topsites

    topsites LawnSite Fanatic
    Posts: 21,653

    I think around here they call them contracts but I believe that's what you're looking for, do a search for it but...

    I myself find it easier to bank my money and then live off my savings during slow times because I find contracted customers get way pickier than per cut and I further find the whole contract thing to be a royal pita. However, the majority of Lawnsite members seem to like them, so you should have no shortage of support.
  3. ChadsLawn

    ChadsLawn LawnSite Bronze Member
    Posts: 1,110

    Thank you for the input
  4. jwscroll

    jwscroll LawnSite Member
    Posts: 36

    Unless you want to starve during the winter get a year long contract that specifies how many times your going to mow that year. Then your still charging per cut just on a monthly basis.

    39 cuts per year x $30(for example)= $1,170.00 per year. $1,170.00 divided by 12 months = $97.50 per monthly payment.

    This is a simple formula to use and you can do the math right in front of the customer to keep them from thinking your cheating them during the winter.
  5. Frosty03

    Frosty03 LawnSite Member
    Posts: 171

    What he said, but I do it kind of like this:

    I tell the customer that the MAIN reason for year round contracts is that it spreads out the entire charges for 12 months.

    Dear customer,

    I calculate that you will get around 42 cuts per year on your yard. What I do is add up all charges per cut 42 cuts X $30.00 = $1,260. Since most people do NOT want to prepay that amount, I divide it out over 12 months and arrive at your figure of $105. per month.

    This means that you don't have a huge bill in the summer and I don't starve in the winter.

    Therefore customer, since we have already been through the summer months and you have been paying a reduced summer price, I can go to an every cut service, but only if we do this for the remainder of the year.

    (Lets say it's August and they went to go to per cut)

    OK Customer, I've calculated that you have paid from January to August you have paid $840, on your annual contract account. Your entire bill is (already figured out) $1,260.

    So Customer, $1260 - $840 = $420, which is your balance you will owe if we switch to a per cut basis and I will be able to do that after the balance of the year has been paid in full.

    Also, you next year's charge will be adjusted as my per cut cost minimum is $40.00 during the summer. For the month of June, my Thursday and Friday accounts got 5 cuts this month. So your monthly bill would be $200.

    So you see Customer, the final figures all work out to the same amount of money. The only reason I do annual contracts is to benefit YOU the customer.

    So Customer, you can make out the check to XXX for the amount of $420 and I will be happy to put you on a per cut basis.

    Many thanks,

    Mr Lawn guy/gal.

    Use whatever charges you use instead of the ones I listed. This is a basic round figure used for illustration purposes only.

    That should flush their hand.

    SDNCLAWNCARE LawnSite Member
    Posts: 232

    I live here in KY and don't plan on using contracts. People are usually scared when it comes to monthly payments or yearly contracts. I guess I'll see what happens when I start cutting next year.
  7. ed2hess

    ed2hess LawnSite Fanatic
    Posts: 13,193

    No offense but this explanation is way way too complicated for most simple minded people. We ask them how many cuts they want in each month then work the math into a monthly charge.

    PMLAWN LawnSite Gold Member
    Posts: 3,535

    We do (did) property maintenance- full service, we manicure you property all year long , Between March 15th and Nov 30th we visit every week, between Nov 30th and March 15th every other week, cost is XXX per month each and every month. Every aspect of your landscape will always look great.
  9. Frosty03

    Frosty03 LawnSite Member
    Posts: 171

    Well...he was asking advice for his situation.

    Me personally, that situation doesn't come up. I do monthly billings year round. Per cuts are something different.

    95% of my accounts pay a fixed rate per month. Trimming, mulching and whatever else is extra.

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