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All the bids are in.....and for the results>>>>

Discussion in 'Lawn Mowing' started by KirbysLawn, Jul 24, 2000.

  1. 1MajorTom

    1MajorTom Former Moderator
    Messages: 6,066

    Ok, let me see if I can get this straight.<br>You service an account say for $145.00 a month. (We'll use that as an example.) For one year that's $1740.00. <br>That's 52 weeks. Now granted, you don't go there every single week once the weather changes. At least I hope you don't.<p>Not sure how often you are servicing your accounts (cutting the grass), but around here we started March 15th, and we are assuming that we will work each week until November 15th. ( I think that's 36 weeks, give or take a week..lol). <p><br>Ok so say we bid a job out at $50.00. Today we had two $50.00 jobs that took 45 minutes each, and one $50.00 job that took 1 hour. For 36 weeks, that's $1800.00 an account.<br>That's cut, trimmed, and sidewalks and driveways blown. Sorry guys, no stick edging, but that's a WHOLE different story I could get into.<p>When November comes, all leave clean-ups and gutter cleanings are extra. Snow removal is extra. Aeration is extra whether it is done in the spring or fall.<p>And then we are done. No hassles. No worries about servicing the customer in December, January, and February unless they call for something they would like done. (Like snow removal)<p>We made $1800.00 plus any extras they want in 36 weeks.<p>If I were to offer a monthly contract for the year around here, I would be laughed off the property. There's nothing to do here for those 3 months. So I prefer to make my money while I can in the summer months.<p><br>Now, back to your $145.00 a month account.<br>For the grass cutting season, that's $36.25 a cut for the 4 week month. <br>That's $29.00 a cut for the 5 week month.<br>And in the winter months (Dec, Jan, Feb), that's $72.50 a cut or whatever is done for the twice a month call).<p>Why not just raise the price to $45.00 a cut in the cutting months. (36 weeks that would be $1620.00, and add all additional services that you do). Fertilize, leaf clean-ups, whatever.<p>And what about your time, gasoline, and extra miles you put out in the winter months?<br>Are you adding that into the mix?<p>It just seems more profitable to me to bid by the cut.<p>I apologize if I got this whole thing wrong.<br>Like I said, yearly accounts are not what we do, so I'm not quite sure how you guys handle them.<p>For us, it works by the cut.<p><br>One final note:<br>I do see how the yearly contract would work if there was a drought. I assume you don't cut when the grass is burnt and dried out, and you'd still be getting paid.<p>This year we are busier than all heck. Turned down work. Last year was a different story. We had to take on a lot of extra one time jobs like hedges, mulching, and hillside clean-ups to make up for the lack of rain. Thank goodness this year is totally different.<p><br>Jodi<p><br>
     
  2. BRL

    BRL LawnSite Bronze Member
    Messages: 1,211

    Jodi & Lazer,<br>I believe in Ray's specifications he said the job would be 34 cuts for the season to clarify all of these questions and so everyone could bid for the same thing. For all of the &quot;per cut&quot; contractors and the points you are raising: the idea is to make your income even, like having a real job where you have a salary of $Whatever per month. So we take Jodi's example of $1800.00 for a year of cutting(36x) and make it a monthly payment of $150.00. This is still covering that extra cut every other month or so, you're just spreading the payments for the same work over the whole year. From a customer stand point this is a great idea. Then they know that with thier $Whatever month salary they will be spending $150.00month for their lawn plus extras. Helps your customer budget & helps you budget for the year. I add the most common extras into the monthly billing to make the whole process easier. Let's say the example property will be getting a 5 step fert. program @ $35.00each and a spring leaf cleanup to start the season at $150.00 and 3 leaf clean ups in the fall at $150.00 each. Now you charge the customer the $1,800.00 plus the extra $775.00 and get a monthly payment of $214.58. If I have 10 of those customers I know I'm taking in $2145.80month & I can budget my business better. Hopefully this helps with the concept. Nobody is losing that 5th cut of the month by billing monthly, as long as they're doing it right.<br>PS: I was preparing for my daughter's christening on Sunday so I didn't have time to bid, but I'll definitely participate in the next one. Great idea Ray!
     
  3. OP
    OP
    KirbysLawn

    KirbysLawn Millenium Member
    Messages: 3,485

    Jodi, you are correct, I do not mow every 7 day during drought, I convert to a 10-12 day schedule, mow 3 times a month and my pay stays the same. I do bill monthly and will continue to do so. Billing $45.00 for a lawn that takes 20-25 minutes would fail around here and WE would be laughed off the property. <p>The numbers in your post are correct but the difference is only $60.00, and I know $60.00 x 200 yards is $12,000.00 per year, but you would not have 200 lawns charging $45.00 for a 20-30 minute cut! I did not do this survey to get in these debates, each area has their own billing issues. If I do this again I will not average it on a yearly basis and I'm sorry this is such and issue for some of you. <p>TheLawnGuy, I quote: &quot;Lazer is right, you are screwing yourself if, when billing monthly, you don't take into consideration there are 52, not 48 months (weeks) in a year. I always take the weekly figure, multiply by 52 then divide the product by 12 to arrive at an accurate monthly total.&quot;<p>Ok, $30.00 per mow x 52 weeks =$1560.00. Divide that by 12 = $130.00 per month. Ok, do you bill monthly or by the mow? Monthly =$130.00, by the mow for 34 mows = @ $45.88 per cut ($183.52 a month on 4 week months & $229.40 on 5 week months!). I guess it depends on which is the easiest too sell to a homeowner.<p>I also did not receive any bids from several of you that are now debating this issue with me now, I hope you participate in the bidding next time and we will see where you stand.<p>Thanks Little Green Guy, BRL, & Jeff for the + comments. Also thanks to Little Green Guy, TheLawnGuy, Jeff, & Lazer and the others for helping in the survey!<p>Ray<br><p><font size="1">Edited by: KirbysLawn
     
  4. 1MajorTom

    1MajorTom Former Moderator
    Messages: 6,066

    I misunderstood Kirby's question. I thought he was asking me what I did for $$$'s in the winter months. I explained I make as much in 36 weeks as an average year-round account, without the hassles, gas expenses, and headaches.<p>I didn't know this was a budget issue. I know how to budget my money, and prefer to get as much money as I can, when I can.<p><br>Now, about the customer. I don't see any of my customers appreciating having to pay for a winter service. Heck, some of them are nit picky enough as it is. I could really see them in the winter months. They would forget about all the work done in the summer months, and they wouldn't be able to understand what they were paying for in the winter. &quot;Do this, do that. What?? You're leaving here already??? I'm paying you $145.00 in January for you to come here and leave in 30 minutes?&quot;<p>Nah, wouldn't work here. I'll take my per cuts any day. Plus I like saving on gas in the winter.<p><br>Jodi<p>
     
  5. 1MajorTom

    1MajorTom Former Moderator
    Messages: 6,066

    Ok, sorry there Kirby. Didn't see your response until after I posted that last post.<p>This will be my last comment on this subject. I'm not usually so conversational. lol<p>First off, I feel like you are taking this personally or something. I'm not out to attack you. You wanted bids which led me to believe that you were open to all or new ideas.<p>I did not bid because quite frankly, I think it is a dumb idea. Yep, that's what I said. What exactly does posting a bunch of bids accomplish? What do you learn from it? I'm in a different area. So my bid would be according to what my customers would pay. You can only charge what the market can bear.<br>So if I bid $50.00 a month or $250.00 a month, so what? <p>Plus, I don't know about anyone else, but how can you just look at a picture and bid on it. Does anyone else 'read' their customers??? By that I mean, can't you go on an estimate and sometimes know right from the start that the customer is going to be a pain the butt??? I know I sure can. And even if I want that property because it is going to be 'gravy', if that customer is a pain, then the price is made higher. I also need to walk a property to get a feel for it. That would be like giving an estimate over the phone. Does anyone do that? I know we don't.<p><br>See, all this time I kept telling Matt, &quot;Gee, I wish we could have yearly accounts around here.&quot; And Matt would say, &quot;Come on Jodi, you know no one around here would fall for that.&quot; And I would say, &quot;But look at all the money we could make. I wish we could move to a year round account climate.&quot;<p>Never once really sitting down and doing the math. So when your bid post came up, I actually did the math. And I was astonished. All that time I was wishing for something that would be worse for us. <br>I guess that's why I chose to post. Not to 'debate' with you. <p>Heck, I was just wondering if I was the only one out there that didn't see the need for yearly accounts. <p>Like I said, the only advantage I can see with a yearly account is if there is a drought. If there is, then we need to take on extra jobs to compensate. But if it is a year like this year, then I think we come out ahead. <p>I like being lazy all winter long...lol<p>Jodi<p>
     
  6. BRL

    BRL LawnSite Bronze Member
    Messages: 1,211

    I forgot one more important reason for billing by the month. Saving time. I don't have someone working in the office so I do my own paperwork. If I had Lazer's 200 customers I would rather do 200 invoices once a month and receive 200 checks than do 800 invoices & receive 800 checks during the 4 cut month, or even worse, 1,000 invoices & receive 1,000 checks during the 5 cut month.:)<br>Jodi,<br>I'm not saying that you visit those properties during the winter. All I'm saying is you take the same $1800.00 from your example (which is $225.00month during your 8 month season from March 15 - November 15) and spreading the same money over the entire year at $150.00month. Some accounts we do visit during the winter because leaves & branches never stop falling, but that is factored into the price, they're paying for it. I never thought this would fly with my customers either but I tried it & was surprised to find that a lot of them liked the idea. More of the commercial accounts than residential. If you can't get year round, one could bill monthly for the 8 month season, at least for the reason I mentioned at the beginning. ($225.00month using Jodi's example)<br><p><font size="1">Edited by: BRL
     
  7. Lazer

    Lazer LawnSite Bronze Member
    Messages: 1,446

    1.) Bills are sent once a month for maintenance accounts - even though the price is per cut.<p>2.) For bid comparison purposes, you need to have an ANNUAL contract (like most of my commercial contracts) which states how many visits of each service per season.<p>I've been screwed out of jobs before because somebody incorrectly manipulated my numbers and I bristled at the thought of it happening again.
     
  8. OP
    OP
    KirbysLawn

    KirbysLawn Millenium Member
    Messages: 3,485

    Jodi, I came up with this dumb idea after noticing in another post some people said they would charge $22.00-$25.00 per cut for a lawn that was larger that the one in this discussion. I still do not understand why professionals are charging less than neighborhood kids to mow a lawn just because we mow faster. <p>Jodi, you have a lawn at home and are seeking service, here's my sales pitch:<p>1) I will mow your lawn for $50.00 a visit. Most months your bill will be $200.00 a month and a few months it will be $250.00 a month.<p>2) I will mow your lawn for $141.66 per month and bill 12 months a year. Your bill remains the same year round.<p>Now for the monthly v/s per cut issue: $50.00 x 34 mowings=$1700.00 and 34 stamps/invoices/envelopes, monthly $141.66 x 12 months =$1700.00 and 12 stamps/envelopes/invoices. Now please explain how we are screwing ourselves? What is so astonishing about this? Where are the big losses? Yes, I would spend a little more on fuel driving to the lawn twice a month to visit but I would do that anyway. I think it's better to have your customers see you, even during off season, that way they don't forget you and go with the next guy the following spring. I prefer not to leave a property I maintain unattended or 3-4 months at a time. <p>I am not taking this personal, I just find it amazing and frustrating that you and TheLawnGuy comment about how we are cheating ourselves and how &quot;astonishing&quot; the difference is when I see $1700.00 a year the same, if it's paid in 8 or 12 months, it's still $1700.00. I think you both fail to realize we are not charging for 52 v/s 48 mowings, it's 34 mowings paid over a year. We all understand there are 5 weeks in some months, we are talking about 34 mowings, we take that divide by 12 and charge that per month, it then does not matter if one month has 5 or 4 weeks, at the end of the year the pay is the same.<p>Lazer I agree and that's the way I bill, so you are telling me after starting this per cut debate you also charge by the month? As BRL noted, I also prefer to send out one invoice a month v/s multiple invoices or trying to track down a customer who may not be home.<p>Thanks for the comments,<p>Ray
     
  9. Kirby provides service to a residential account for $1700 year round.<p>He picks up some pine cones in the winter.<p>Stone provides service to a residential account for 8 months for $1700.<p>He sails his boat in SW Fla. for a couple of months in the winter.<p>Get the picture now Kirby?
     
  10. BRL

    BRL LawnSite Bronze Member
    Messages: 1,211

    With Lazer's system the monthly bill will vary and I have a few customers that I bill like that also. The sample bid that Kirby's proposed did specifically say it would be 34 cuts per year and its obvious that we all have different ways of billing that out. The important thing to remember here is that we ultimately have to bill in a way that is convenient for our customers. I have customers that I bill using every one of the ideas presented on this thread, even though its a slight pain that way (because each customer is different). However, for the good reasons mentioned earlier, any new customer that I get I push for the year round or at least 1 monthly price for our 8 month season. As long as we're all getting paid for our work, use the system that works best for you.
     

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