Yearly contracts for dummies

Discussion in 'Lawn Mowing' started by StBalor, Aug 1, 2006.

  1. StBalor

    StBalor LawnSite Senior Member
    Posts: 798

    I would like this to be a topic where some of the more established LCOs can help out us new comers and add your input.

    Most all of us would love to have our clients on yearly contracts or at least seasonal contracts. This would be so we get paid the same amount each month and not have to rely on each cut and then someone asking us to skip a cut, resulting in loss of pay.

    I can start off with the basics.

    1. You need to know how many weekly and bi-weekly cuts you will be given before the year starts. You do this by looking at a calender and counting the weeks. (Example.. I would start counting at april 1st and end at the end of november) lets use 32 cuts per year as an example.

    2. You would then need to figure out how much you would charge that person and multiply depending on what kind of contract you will be doing. Either seasonal or yearly. Lets say 35.00 for their lawn 35x32=1120
    If seasonal i would divide by 8, because ther are 8 months from April - November. 8 would come to 140.00
    If yearly you would need to divide by 12, because of 12 months in a year.
    12 comes to 93.33, i would round this to 95.00 because you are having to wait on your money at the same time giving them a lower monthly payment stretched out longer.

    3. If yearly, you would need a clause in there saying if they quit mid season they would be back charged all past cuts at whatever you determined their yard was per cut in the beginning minus whatever they already paid. ( example... they started on april 1st and they quit june 1st say they were paying 95.00 a month and got 8 cuts during this time. Your original calculations were 35.00 per cut. 8 x 35.00 = 280.00. now they payed the 95.00 for 2 months which equals 190.00 you would need to subtract this number from 280.00 280.00 - 190.00 = 90.00 this is what they would owe you for leaving at this time.

    4. Seasonal contracts would be good for grass cutting where as yearly contracts you could add in all sorts of things, like fall and spring clean ups, aeration ect... just add these things into your totals.



    Well how did i do on explaining this? i would like to here a lot more input on this as this is the route i will be taking next year.
     
  2. imdawrlus

    imdawrlus LawnSite Member
    Posts: 49

    i really like this idea....but i'm not a good salesman so i dont know if i could talk many of my customers into something like this.

    also when i go to propose all of this i think most of them would have a heart attack when they stop to think of what they pay me per summer for "just grass cutting"
     
  3. onthesidelawncare

    onthesidelawncare LawnSite Member
    from Jax. FL
    Posts: 43

    You answered a question of mine, which was what to do if your contract customer cancels. So you do back bill them the price of the cuts to date. Thanks for the info.
     
  4. WJW Lawn

    WJW Lawn LawnSite Bronze Member
    Posts: 1,330

    Yep...same here. People dont like contracts...I get alot of business simply because I dont use em.
     
  5. StBalor

    StBalor LawnSite Senior Member
    Posts: 798

    I thought the same thing at 1st. But i started useing contracts this year and people do not seem to mind them. I have gotten 20+ on contract just this year.
    I also have a clause in there that the contract will continue every year till 1 of us termintes it in writing. People seem to really like knowing they can count on you every year and don't have to look for someone else in the spring.
    The clients that do not want a contract, do you really want them? I have 77 clients, 20 of which are on contract. But not knowing alot about the seasonal and yearly contracts at 1st all are on price per cut.
    I will not risk loseing any customer by trying to get them to switch to A set monthly price, but all new clients will be on a seasonal or yearly contract at a set monthly price.
    I will be sending a letter to all my customers stating i will be switching to this, but if they do not want to, i will not force them.
    And of course some pitas i will be sending a letter to this winter stating i will be switching to this. If they don't like it i can get rid of them.
     
  6. Precision

    Precision LawnSite Silver Member
    Posts: 2,995

    Instead of having to figure out how many cuts they had time your price per cut and back tracking and all that. Just make them pay the first month upon signing the contract. then require 30 days notice of cancellation.

    example.
    start 01 April . costs $200 monthly on 12 month plan. recieve $200 on 01 April

    call to cancel 05 August. Are current on their bill. thank them for their call and tell them that they are paid thru 31 August and you will consider this their 30 days notice and their last cut will be the week of 31 August. Then thank them for their business. Done deal.

    If they want out sooner (and you didn't do something stupid like mow over all their hedges) tell them you would be happy to quit working for them on whatever date they would like, but their will be no refund as the contract stipulates 30 days notice so you can replace them in the schedule. You already have their money. Most times when people move, they tell you last of anyone. I just inform them that I will mow one time after closing as a thank you for being such a good client (when their prepaid extends beyond their desired time) and often times I get to meet the new owner and can offer them my services. AGAIN NO REFUNDS.
     
  7. PMLAWN

    PMLAWN LawnSite Gold Member
    Posts: 3,535

    All my customers were under year long contracts at the end.
    If any thing to add it would be an "out" I was at 30 days. The farther south you are the easier it is to sell but tell customers that you will "manicure" their property all year long We state that we visit each week March 15th till Nov. 30th and every other week all winter. And we do what is needed to that property.
    The customer should never get out of the car after work and even thing about landscape maintenance. It always looks good
     
  8. martinfan06

    martinfan06 LawnSite Senior Member
    Posts: 631

    Same way here you dont get screwed customer dont get screwed its a win win !
     
  9. jpmako

    jpmako LawnSite Senior Member
    Posts: 593

    Here is a copy of my Contract
    Feel free to use/ Modify to suit your needs.

    This has alleviated many problems with customers, but it does take some salesmanship to get new clients to sign.


    Jason
     

    Attached Files:

  10. StBalor

    StBalor LawnSite Senior Member
    Posts: 798

    Explain this better please, i do not understand. Here in Maryland as in most states the grass does not grow year round. We basically have an eight month season. If you offer them a 12 month contract it means you are not gonna get all your money from cutting the 8 months till the contract is over because you are giving them smaller payments in exchange for getting paid all 12 months.. So if they want out of the contract early, you need to back charge them to get your money for the cuts you already gave.
     

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