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12 month contract

Discussion in 'Lawn Mowing' started by BossCo, Feb 26, 2006.

  1. BossCo

    BossCo LawnSite Member
    Messages: 8

    A few questions for my first post. :waving:

    I am just expanding my business into commercial lawn maintenance and was wondering what the average is for yearly contracts versus per cut contracts.

    Heres my situation. I have a fairly large apartment complex that I already do the snow removal for. I spoke with the owner and told him about my business expansion, and he was eager for a bid. I hinted toward a 12 month contract, and he said budgeting was not a problem. How do I get this complex on a yearly contract, versus a per cut contract. How do you sell that to the customer in this situation.

    By the way, he just wants cut, trim and blow. He said he may want other services, but doesn't want them in the price.
  2. heather lawn sp

    heather lawn sp LawnSite Senior Member
    Messages: 681

    We 've been doing 12 month for 15 years

    -Written contract
    -Define the legal property . . . if only by municipal address
    -Define who the contract is with . . ., the owner
    describe point by point what you will be doing for them
    mow times per season, height,time of day, time of week
    snow plowing trigger point, time for completion, salt use, walkways
    This will look like you know what you are doing

    It won't be as tough a sell as you think
    BUDGET He will be collecting an amount for the maintenance from his people. If you will gaurantee the cost to him for a year, you will be saving them alot of headaches. YOUR problem will be to find the magic number that he will accept. Don't fill in the line about the price. Sit down with the him and ALMOST casually find out how much money he has to spend. Watch for the reaction over you requested amount. The money person won't want to sit down with you. He will just want paper on their desk to read. Get in his face, find SOMETHING in common with him (sports, hobbies) make a new friend. Make this a personal relationship between you and the owner.

    Build his trust that you can deliver what you promise over the next 12 months:waving:

    TURF DOCTOR LawnSite Silver Member
    Messages: 2,138

    Try lawnpro they will have contracts in there software.
  4. ICE

    ICE LawnSite Member
    Messages: 148

    I think that it would be in your best intrest to sell him the 12 month contract if you can. The benefits would be worth it in the long run.

  5. BossCo

    BossCo LawnSite Member
    Messages: 8

    Thanks for the advice. However, I understand what is involved with the paperwork and the advantages of it. I guess my question is how many people actually go for this. Why wouldn't an owner go for a per cut contract, what points should I sell this on, besides of course budget. Do you give them a small discount if it is for 12 month, or do you just charge extra for per cut contracts?

    Trust me, I would really like to have a check every month. I just want to know the approach some people here are using, and how often does it work.
  6. heather lawn sp

    heather lawn sp LawnSite Senior Member
    Messages: 681

    Besides budget

    They won't have to argue over weither it needs cutting this week or not
    You won't have to 'ask permission' to mow 'this time'
    there won't be any arguments over a discount off the charge per time 'because there hardly was any grass to mow'

    Because there will be less weekly selling of services you can cut that portion out of the price per cut price-tag. This will work best where the owner is a corporate body and not personally responsible for the bill or not on site (like a homeowner would be). They don't want to take time from their day to argue about the lawn needing mowing this week. That's part of your job. . . to decide the timing of the mowing. The difference won't cost them any more.

    YOU TAKE CARE OF THEM! (people like being taken care of)

    Inside the budget thing
    Like you like to get a cheque every month for a gauranteed amount. He like to know there won't be any surprises this month
  7. BossCo

    BossCo LawnSite Member
    Messages: 8

    Thanks Heather, thats what I was looking for.

    Well put. Its people like you who make this site a great tool for this industry.
  8. LwnmwrMan22

    LwnmwrMan22 LawnSite Platinum Member
    Messages: 4,373


    Commercial accounts can EASILY be sold on set contract prices.

    You have to show them how it'll always be the same amount, every month after month after month.

    Especially when it comes to snowplowing.

    Figure out how many average snowfalls you get in your area, and how much you want to charge for them each time.

    Personally I average about 18 snowfalls / year here in Minneapolis / St. Paul. And I get $100 / hour, so if I had a lot that would take on average an hour, it would be $1800 for the year.

    Now if the same place is about an hour to mow, and I average $75 / hour to mow, it would be $75 each time. I base my mowing on an average of 24 times / season, so the year it would be $1800 to mow as well.

    That means it would be $3600 for the year, or 12 equal payments of $300 / month, from May 2006 until April 2007.

    If there's no snow, I still get paid. If there's a dry summer, I still get paid. If it snows 23 times, I'm out an extra $150 in fuel. If it rains all summer and I cut 28 times, they get 4 cuts free. I still get my trucks paid, all of my equipment, mortgage, everything. I'm not out whining because it didn't rain / snow.

    The apartment complex is going to look at it "$300 / month?? that's nothing". When you get that from 20 accounts for the year, or 40 accounts for the summer only and 20 for the winter, that's $100,000 / year that's guaranteed, working solo.

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