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yearly contracts or monthly billing?

Discussion in 'Lawn Mowing' started by trophytkr, Feb 16, 2002.

  1. trophytkr

    trophytkr LawnSite Member
    Posts: 73

    I can't decide on which way to go my first year out. Okay here's the senerio. Here in wisconsin normally may and june the grass grows almost faster than you can mow it. It's not unnormal to mow every 3 or 4 days to stay ahead of the growth. As in most places july and august can be dry and you mow only every week and a half to two weeks. But if you get decent rain you still mow weekly. Do you guys prefer to keep track of how much you do monthly and send out a monthly bill or sign them up to yearly programs and have them just pay in two installments. Talking to others in the area that have kept records the average yearly mowing is 24 times a year. Or a third option is to figure out how much you will charge them per visit multiply that by 24 and then devide that into 6 or 7 equal monthly bills. Your experience and input as always is much appriciated! Thanks!:p

    A-Z Lawn Care
  2. Heavenly Green

    Heavenly Green LawnSite Member
    Posts: 171

    The way Ive done it the past 2 yrs. cut for a month and bill at
    the end of the month. Not anymore Ive been burned with this
    billing method to many times examples at the begining of season
    theres no money to operate with,If you want to drop a cust. you
    feel like you cant till you get paid from last mo. but by the time
    you get paid from last mo. youve already got another mo. of cuts
    in. so you get stuck with a undesirable account for the season.
    A drought comes along and everyone calls saying dont cut this
    week or last season lots said dont cut this month its dormant
    then you have no income and then when you do start cutting
    its like starting the season all over again with no working capital
    and all your help is gone because they cant go a month with no
    work. And then you just get these a$$ holes that dont send there
    payments and everytime you go to collect you get the runaround
    Im still owed 1125.00 from last year from 6 differant customers
    I feel ripped off!!!!!!!!!! You know you do your part perform the
    service pay your help send the invoices out. And somehow these
    people think they dont have to pay.

    So next year its going to be 26wks.x (cut price.ex.25.00)
    Divided by 6mo. payments 1st payment when you sign contract
    Billed out on the 15th every mo. due no later than the 1st. of
    the next mo. we wont continue any cutting untill payed in full for
    that mo. This way there is no such thing as not being paid for my
    work. And it basicaly will give me the upper hand as it should be
    I mean it is my bussiness after all. and as for droughts well still
    go spend the same amount of time there every week just doing
    other things weeding edging trimming and blowing.

    And if people dont want to pay this way or dont feel comfotable
    paying me a month in advance for service If they dont trust me
    Why should I trust them let some other lco take the risk of not
    being paid. A bizz needs a steady flow of money coming in to
    stay in bizz big lesson Ive learned last season.

    Steve@S&S Heavenly Green Lawns:angry:
  3. LawnLad

    LawnLad LawnSite Senior Member
    Posts: 738

    For simplicity billing in installments might be easier. You'll have different complaints/comments to deal with than you will with Fee for Service type billing.

    We bill Fee for Service. If we cut once or three times in a month, we bill it just as we did the work. A fert application, an hours clean up or bed maintenance, etc. we bill each item a al carte.

    I think it depends on the type of work you do as well. I could not estimate our fall clean ups or spring clean up in with your installment pricing since we're dealing with 70 to 120 year old mature shade trees. Lots of oaks (leaves and acorns), maples and elms. So we bill fall clean up by the hour. It accounts for 30% of our maintenance revenue each year.
  4. trophytkr

    trophytkr LawnSite Member
    Posts: 73

    The lawn maintenance program that I would sell to them would include, mowing triming weed eating lawn edging and blowing off of grass clippings. Other services availible would include de-thatching, rolling, aerating, and fall clean-up (at additional charges):D Sorry I didn't include that in my question. Rick.
  5. Heavenly Green

    Heavenly Green LawnSite Member
    Posts: 171

    I too started this bizz while working a full time job as Tool Maker did both for 3 yrs found my passion to be lawn care. Went
    fulltime last april with all brand new equipment lots of credit debt.
    Years before fulltime I had that steady weekly paycheck
    that could pay all my bills&overhead so if some people didnt get
    me there payments on time it wasnt a big deal I knew Id be paid
    sooner or later and 99% of the time was paid for all services perfformed but now having to rely on these customers to send
    payment on time after youve already got your time and money
    vested on there lawn is a gamble.

    So Ill be selling A lawn maintenance package charging a seasonal price divived into 6 eaqual monthly payments any other
    services are billed per hr upon completion.
    I do snow removal the same way seasonal price based on
    estimated # of pushes billed over 5 mo. nov.1st to april 1st
    so that should cover 11mo. your add on servives clean-ups,bushes,etc. should fill the gap and add to your profit.

    Creditor dont care if your in a drought and Inns. companys dont
    care if no work was performed that mo. you still have to pay your bills 12mo. a yr. Basicaly this is the only way I feel I can charge
    and stay in it for the long haul. May not be for every bizz.

    Steve@S&S Heavenly Green Lawns;)
  6. kutnkru

    kutnkru LawnSite Silver Member
    Posts: 2,662

    Heres how I did it when I was working with my brother:

  7. kutnkru

    kutnkru LawnSite Silver Member
    Posts: 2,662

  8. LawnLad

    LawnLad LawnSite Senior Member
    Posts: 738

    Thanks Kutnkru for the post.... makes me think and reevaluate a little. Fee for service is all good, but maybe some package plans would help people to believe they're getting extra value. Also might help to simplify billing.
  9. AztlanLC

    AztlanLC LawnSite Bronze Member
    Posts: 1,045

    The way I do it it's the following:

    A pretty good season has 28 mowing weeks
    plus spring clean up and maybe 4 times on fall clean up.

    I put everything together and then divide by 10 installments

    I star the season with spring clean up, edge beds.
    in the middle of the season I do prunning.
    and about the first week of october star mulching leaves.
    I have about 80 customers which takes me from monday till friday on regular basis. (50 hrs 2 guys) that includes changin blades every day, lunch and fill up the mowers.

    Of couse when fall gets here I can't do'em all in 50 hours.
    So, I star on the first week of october mulching leaves on every customer house, so it takes me about week and a half to finish all the houses and star all over again until about the beggining of november. Then I do 1 final clean up on every house.

    The way I calculate it's this

    a $50 lawn

    mowing 50 x 28 = 1400
    spring clean up 75 (1 time and a half)
    fall clean up 5 times 250 ( maybe more depending on amount of trees or maybe 0 if not trees)
    prunning and hedge trimming (calculated by amount of shrubs)

    1400+250+75 = 1725+prunning / 10 payments $172.5 + shrubs.

    I have been doing this for about 3 years and it's been working real good for me, I don't have to worry if it's goin to be a real dry season or praying for snow in winter, and customer are happy.

    One thing tought! Sometimes I have to mow a property twice to make look at it's best, but again we usually have couple of weeks when we just blow the walkway.
  10. leeslawncare

    leeslawncare LawnSite Senior Member
    Posts: 649

    If it normally takes us 45 minutes to mow the account during the growing season, we will allocate the same amount of time for weeding the beds etc. even though we are not cutting

    . what kinda stuff are you running?

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