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3 year Contracts?

Discussion in 'Christmas Trees & Seasonal' started by ExecutiveLawns, Oct 9, 2008.

  1. ExecutiveLawns

    ExecutiveLawns LawnSite Member
    Messages: 180

    For all you you guys out there that have any kind of multi year contract on lights and install what exactly does it in tale. Do you have a sample that you can post. Do you have a higher mark up on the lights if you are going to be bank rolling the materials over a couple years? Do you add in interest? This is my second year in the holiday light scene and have had a couple customers this year ask about a 3-year contract(i know there are a couple other companies around that do this).

    Any input would greatly appreciated.

  2. David Gretzmier

    David Gretzmier LawnSite Gold Member
    Messages: 3,645

    we do 2 year contracts. given the volativity of fuel, and steel and copper prices, 2 years is long time to commit. 3 years is a lot of time to set prices.
  3. turf hokie

    turf hokie LawnSite Silver Member
    Messages: 2,751

    This is where the rental aspect really comes in to play. I have no problem locking prices for 3 seasons. Know your costs and life expectancy of material and you will do just fine.

    As far as how to word a contract, it really is not that crazy, just put in the contract a clause that states that the price is locked for years 2008,2009,2010 or whatever it may be and have them initial or sign that spot as well as the bottom of the contract. I have this clause on the back of my contract and it goes along with some other disclaimers and legaleeze.
  4. David Gretzmier

    David Gretzmier LawnSite Gold Member
    Messages: 3,645

    Its the things I can't control that lead me away from 3 year prices. gas was 2 bucks a gallon in 2006, and though it is going down, it was 3.75 a gallon 3 weeks ago. and yes, we were hanging lights then. Labor rates have went up too, and believe me If I could pay less per hour, I would. Labor rates in 2006, 8-10 bucks per hour got you a pulse and a prayer. 2008 is looking like 11-12 bucks per hour is more the norm.

    On a personal note, my grocery bill for a family of 6 has had to go up 40% since 2006 because of the increased prices in everything that has flour or corn in it. remember cokes being 3 bucks for a 12 pack at wal-mart? that same 12 pack is 4.35 now.

    I guess theoretically you could set a price for the next ten years. but less years on your contract equals less risk on your part. Think of it this way-when did anything you buy for this business get cheaper the next year?

    I give the first year price to buy everything and we hang it, and the 2nd year price. typically the third year I will raise it 5-10% or so if necessary. Sometimes it is not.
  5. alexlawn23

    alexlawn23 LawnSite Member
    Messages: 7

    Damn, u have alot of good equipment, how much do you gross a year?
  6. ExecutiveLawns

    ExecutiveLawns LawnSite Member
    Messages: 180

    not enough:laughing:

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