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Do option B - slows down your cash flow. Which effects other things. - long decision. It has risk to the contractor of not being paid.

option A has no benefit to the client.

but here's my question, does there have to be a benefit to the client? I argue no. In fact if you build your companies reputation correctly, within reason, people will jump though your hoops and use your payments terms simply because they want to work with you.

see, my company has the best reputation in the area in terms of customer service. But frankly there is nothing magical there. We answer the phone live… and answer questions when people call or email…. We communicate. That alone was enough to make me one of the larger players in my area, and hence why I can set any payment terms I want.

last thought , Let's say your shopping around, and you do happen to trip over two contractors and both seem great…. With payment options A and B as you describe above. Well if it really comes down to payment terms being the decision factor, frankly I don't want that person as a customer. If your advertising or selling your service on the fact that you pay afterwards, your attracting people that don't have money, and want to use you as a line of credit. Your asking for problems.
You can set any payment terms you want, you don't have to be the "best" in your area to require prepay.

Again, there is no wrong answer as long as you get paid for the work you performed.

That's not what peaked my interest anyhow. What peaked my interest was your "non-refundable" agreement, which clearly is not a "non-refundable" agreement as you 1st mentioned.
 

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Good info!

One interesting thing I've noticed is that as we now are booking jobs in that 2-3 month range, a number of clients were a bit nervous at our approach last year. Since we weren't charging a deposit, many felt that they didn't really have a slot "locked in". So although I thought I was being more than fair by NOT taking any money, many clients found that odd due to the long scheduling time frame.
Yea they are always very eager to get a deposit in, I guess it is a psychological thing and makes sense.
 

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I'm still trying to collect a few leaf removal jobs that were done before Christmas! But that being said I dont ever remember being stiffed on a leaf removal. It may take months to get them to pay but I get paid.
 

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I'm still trying to collect a few leaf removal jobs that were done before Christmas! But that being said I dont ever remember being stiffed on a leaf removal. It may take months to get them to pay but I get paid.
If you have the service the customer wants, they're going to pay if they want to keep you. It's like the electric bill, if you like you're electric, you're going to pay your bill to keep the electric on. You might pay late and have a late fee but the alternative is no electric.
 

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I'm still trying to collect a few leaf removal jobs that were done before Christmas! But that being said I dont ever remember being stiffed on a leaf removal. It may take months to get them to pay but I get paid.
I feel you. We're still getting stiffed for $300.

I don't feel like I care enough to even send this to collections. I think I'll just send her an invoice once month until I get forget. We're probably out $50 bucks of material and our time.
 

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You can set any payment terms you want, you don't have to be the "best" in your area to require prepay.

Again, there is no wrong answer as long as you get paid for the work you performed.

That's not what peaked my interest anyhow. What peaked my interest was your "non-refundable" agreement, which clearly is not a "non-refundable" agreement as you 1st mentioned.
Correct. It's not advertised as non-refundable. But when we are asked straight up about early cancellation, we tell them exactly what I said above and that most often they should consider it non-refundable because of how the math works out.
 

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If you do good work and have a loyal customer base, I just can't see how significant price increases are going to affect customer count negatively. You can throw in the standard 'bidenflation' line on your renewals and it will get you by slick as a hot knife thru butter. Everyone knows about the wild inflation occurring right now. Its a built in excuse:)
 

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I know there are a lot of varying locations here but I am surprised raising your prices is going so well for you guys. I contemplated doing it last year but decided against it. So many of my customers tip me on a regular basis or at the end of the season I would basically be raising their prices for no reason other than to possibly agitate them. I also know my prices are fair.

Anyway so many people are out of work right now anyone and everyone are trying to offer basic services like lawn mowing. A good friend of mine worked in a nice neighborhood and had a lot of clients. He really is a trustworthy guy who takes care of people. However, a business came in and literally undercut him by approximately half of what he was charging. I could see you being a little competitive but there is just no competing with stuff like that.

I do not like talking about specifics because everyone is different but in my area lawns range a lot but the average one is an acre or 3/4 of an acre. My price to cut those lawns is $60-$70. I know there are people doing yards like the ones I have for half of that. Raising each of my yards by just $5 would help a lot but I do not want to risk losing a chunk of my business over it.
 

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Well Mr Fox, the question is do you want to work 10-20% more (that's what inflation actually is, not 6%, if you look at gas and housing, groceries, vehicles, etc, for example the average home price is up 35% in my town of 120k people this year and a new truck I got for 37k 4 years ago is 55k this year) for the same quality of living so that you clients don't have to work any harder to get to same services as before, while everyone else is in the country is dealing with it?

Even if you risk offending them, it is very likely they won't be able to find anyone to do the work anymore, especially at the prices they are paying you.

We are seeing a lot of new businesses start up, but there is still not enough because the companies who had a lot of staff are all short and not taking on as much work. It's really just the people who would normally work for other companies going out on their own.

I am trying to do renovations and get maybe 5/50 companies I called to actually respond, maybe 3 actual quotes.
 

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I know there are a lot of varying locations here but I am surprised raising your prices is going so well for you guys. I contemplated doing it last year but decided against it. So many of my customers tip me on a regular basis or at the end of the season I would basically be raising their prices for no reason other than to possibly agitate them. I also know my prices are fair.

Anyway so many people are out of work right now anyone and everyone are trying to offer basic services like lawn mowing. A good friend of mine worked in a nice neighborhood and had a lot of clients. He really is a trustworthy guy who takes care of people. However, a business came in and literally undercut him by approximately half of what he was charging. I could see you being a little competitive but there is just no competing with stuff like that.

I do not like talking about specifics because everyone is different but in my area lawns range a lot but the average one is an acre or 3/4 of an acre. My price to cut those lawns is $60-$70. I know there are people doing yards like the ones I have for half of that. Raising each of my yards by just $5 would help a lot but I do not want to risk losing a chunk of my business over it.
Personally, I'm not raising everything across the board. I've worked my way up through the ranks a good bit and I'm only really taking upper middle class accounts. I've learned these accounts just want the lawn mowed nicely, in time, and with as little effort on their part as possible. Some guy throws a sandwich bag with a few rocks and a flier in their driveway and they don't even want to pick it up to throw it away. And I'm filled up to the point that I can throw a number out that's at around the top for my area and either get it or not, move forward either way. What I'm really interested in doing and am doing is bringing up the accounts I've had since the beginning, at scrub pricing. These $40 yards that are taking me 40 minutes have to get into the rear world. There's not too many of those left but when compared to $2/minute new accounts it's not cutting the mustard.
 

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Well Mr Fox, the question is do you want to work 10-20% more (that's what inflation actually is, not 6%, if you look at gas and housing, groceries, vehicles, etc, for example the average home price is up 35% in my town of 120k people this year and a new truck I got for 37k 4 years ago is 55k this year) for the same quality of living so that you clients don't have to work any harder to get to same services as before, while everyone else is in the country is dealing with it?

Even if you risk offending them, it is very likely they won't be able to find anyone to do the work anymore, especially at the prices they are paying you.

We are seeing a lot of new businesses start up, but there is still not enough because the companies who had a lot of staff are all short and not taking on as much work. It's really just the people who would normally work for other companies going out on their own.

I am trying to do renovations and get maybe 5/50 companies I called to actually respond, maybe 3 actual quotes.
Not to offend but first off, home renovations is a much different market from landscaping. Especially when you consider what I (and I believe many others here are talking about) am talking is basic lawn maintenance. There is currently a shortage of carpenters and related jobs. There are a lot of people all over YouTube and the internet explaining why but it is something that is definitely happening. On the other hand, it seems like the lawn mowing business has absolutely exploded. No offense to anyone because I have done it and enjoyed it for 17 years now. Having that said, anyone can start mowing lawns and be potential competition. Not every person is going to have the skills or the experience to renovate your house.

I don't want this to get taken the wrong way because there are plenty of people that lack the skills to make a yard look at good as I do and I bet many people here feel that way about their work. Just having this in mind if someone if out of work and needs money they can potentially undercut any of us to a large extent and get the job done in more time with a cheaper piece of equipment. I see people towing MTD equipment around all the time and really wonder how much work they are getting done in a day and how often they have to fix that equipment.

Secondly, as I said before there is a lot of competition in the area at which I live. I would guess many places have experienced this but when I take a trip to town I pass by several people towing mowers. It is fine if you have plenty of clients like Hurryupelectric mentioned.
 

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Well every market is different, but it is my experience and it seems like a good percentage of people here, that everyone has not enough staff and too much work. People are being encouraged to offer the higher barrier of entry services like landscape construction and lawn applications rather than just mowing though, so maybe the mowing market isn't being affected as much as you say.
 

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Well every market is different, but it is my experience and it seems like a good percentage of people here, that everyone has not enough staff and too much work. People are being encouraged to offer the higher barrier of entry services like landscape construction and lawn applications rather than just mowing though, so maybe the mowing market isn't being affected as much as you say.
Agreed. There is something wrong with this picture too. Because all you hear about is people offering hiring bonuses and how short staffed people are. However, I have also seen where people are applying for every entry level job they see and having trouble getting calls back.

I know this is true for Information Technology even right now still. I graduated with my degree before Covid hit. So I was looking for a entry level job to get my start. It is still hard to find a job in information technology for me personally. Because of the simple fact that all the people that got laid off are now applying for the entry level IT jobs that I cannot compete with on paper. They are looking at these people that got laid off from their jobs that have experience and they are hiring them because they are a safer bet. This may not be true for all fields but I now I have personally applied for hundreds of entry level IT positions and never got one call back from any of them.
 

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I know there are a lot of varying locations here but I am surprised raising your prices is going so well for you guys. I contemplated doing it last year but decided against it. So many of my customers tip me on a regular basis or at the end of the season I would basically be raising their prices for no reason other than to possibly agitate them. I also know my prices are fair.

Anyway so many people are out of work right now anyone and everyone are trying to offer basic services like lawn mowing. A good friend of mine worked in a nice neighborhood and had a lot of clients. He really is a trustworthy guy who takes care of people. However, a business came in and literally undercut him by approximately half of what he was charging. I could see you being a little competitive but there is just no competing with stuff like that.

I do not like talking about specifics because everyone is different but in my area lawns range a lot but the average one is an acre or 3/4 of an acre. My price to cut those lawns is $60-$70. I know there are people doing yards like the ones I have for half of that. Raising each of my yards by just $5 would help a lot but I do not want to risk losing a chunk of my business over it.
Why are so many people out of work right now. Everyone and their dog is hiring. Don't want to work?
 

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I know there are a lot of varying locations here but I am surprised raising your prices is going so well for you guys. I contemplated doing it last year but decided against it. So many of my customers tip me on a regular basis or at the end of the season I would basically be raising their prices for no reason other than to possibly agitate them. I also know my prices are fair.

Anyway so many people are out of work right now anyone and everyone are trying to offer basic services like lawn mowing. A good friend of mine worked in a nice neighborhood and had a lot of clients. He really is a trustworthy guy who takes care of people. However, a business came in and literally undercut him by approximately half of what he was charging. I could see you being a little competitive but there is just no competing with stuff like that.

I do not like talking about specifics because everyone is different but in my area lawns range a lot but the average one is an acre or 3/4 of an acre. My price to cut those lawns is $60-$70. I know there are people doing yards like the ones I have for half of that. Raising each of my yards by just $5 would help a lot but I do not want to risk losing a chunk of my business over it.
addressing a few points. You should be raising every single year. Inflation hits every year, this one is just a larger hit.

if you don't raise by a significant amount, will you even be in business. A lot of people are taking about 7%-8% inflation rates…. But we are being hit harder. Trucks are up 25-35% more. Fuel is up 50% more. Labor is up 8-10%. On and On

Fear is what is holding you back. Tips are optional, and you would likely still get them.
 
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