Billing flat rate for only 7 months of service

Discussion in 'Business Operations' started by spitfire3416, May 12, 2013.

  1. spitfire3416

    spitfire3416 LawnSite Senior Member
    Messages: 554

    Are there any guys out there who charge a flat rate for lawn maintenance?

    I live in Jersey so theres only usually 31 cuts max, in a season. (April 1st-October 31st) I thought that if I just figured out the base price and found the yearly sum, I could divide that out over 12 payments in 12 months. Though, the customer would only be serviced for lawn maintenance 7 months out of the year, it would all come out the same price in the end. I could always issue a credit for any cuts that we miss and if the customer wants to quit after the 7 months of service, we bill them for the remaining balance.
  2. whiffyspark

    whiffyspark LawnSite Fanatic
    Messages: 6,560

    I do my cutting season on a flat rate. But what I did was work a 12 month price into an 8 month price. I put $x amount into a banking account every month to get me through the winter

    People in my area simply won't pay if you don't come. I tried Jim Lewis method of coming twice in the winter to edge, clean up etc. they won't have it
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  3. 32vld

    32vld LawnSite Gold Member
    Messages: 3,983

    I do not see any advantage to do average monthly billing for 8 months or 12 months.

    Too many lose ends. Fall clean ups, spring clean ups, mowing season late or early, same with lawn applications. The 8 month year can become a 7 or 9 month year.

    As my business grows and more of my customers are not retired I have been doing more monthly billing for mowing instead of just being paid at the time of service. Because some months have five cuts some have four each month's bill will vary. If the price of one cut is going to start causing these people to have a financial melt down then they are not who I want for customers.

    Up sell work gets paid for when the work is done. I put down mulch, In May I do not want to wait, and will not wait over 8 months to get paid.

  4. PamlicoLawnCare

    PamlicoLawnCare LawnSite Member
    Messages: 80

    I have large commercial accounts that pay flat rate over the course of 12 months because it is generally more straightforward and there is a contract.

    Residential accounts are more difficult to do a 12 month flat rate due to the reasons previously described and I don't do contracts with residential customers.

    I wouldn't recommend a contract with residential customers for a couple of reasons...they are somewhat tentative to sign a contract and get tied into a lawn care company that may not perform...and I am somewhat tentative to sign a contract and get tied into a PITA customer.
  5. whiffyspark

    whiffyspark LawnSite Fanatic
    Messages: 6,560

    I don't include clean ups, just mowing
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  6. Dr.NewEarth

    Dr.NewEarth LawnSite Bronze Member
    Messages: 1,476

    Here are some suggestions

    I would do the equal payment for the seven months only. You don't have to do them a favor by extending their payment period months after you have finished. You will need that money.

    Have them give you seven post dated cheques dated for the first day of the month before you start cutting. That way, if a cheque bounces you can stop service asap. and try to collect
    Many landscape companies do it this way now.

    Get a written contract with them. It should state exactly what you are doing for their money ie: weekly lawn cut/trim/blow for X amount per month. Also, NSF cheques will be billed whatever your bank rate is. Mine is $45 for each NSF.

    Have it state in the contract that "contingent work will be agreed to by both parties in writing and will be billed seperately from the regular lawn maintenance."

    I also state in the contract that the Lien Act of our Jurisdiction applies to all over due accounts. Late fees of 5% apply to all overdue accounts.

    Remember that a verbal contract will not hold up in court and you must have a written contract to file any lien or small claims suit.

    This is just a basic idea of what we have in our contract, but get to know what your state allows you to do to protect your businesses income. All the business info you require regarding liens in on line.
  7. JimLewis

    JimLewis LawnSite Fanatic
    Messages: 6,876

    Sorry to bring up an old thread.... I just came across this thread and noticed my name. (Not on lawnsite too much these days....not much free time anymore...)

    So when you tried that (my method), did you offer them options? When I started, I didn't have any year-round customers. All of my customers were cheapskates who didn't see the value in paying year round. But two things really started to change that.

    First thing was I offered two options. And the year-round option was the least expensive of the two. So it was more attractive to my clients. I was sort of forcing their hand.

    The second thing was I started to focus more on the upper middle class and upper class neighborhoods - people who I figured would not only be able to afford year-round services but may already be used to the idea.

    So for several years when I went to bid out a property, I'd offer two options. One rate if they were seasonal (let's say $240 a month). And a second rate if they wanted to go with our year-round service (let's say $210 a month). I'd explain that for about 3.5 months in the winter we'd only be coming every-other-week and that's why the lower overall monthly price. But I also went out of my way to describe services they'd still be getting all winter too - so they didn't feel like they were being totally ripped off.

    It was only AFTER I got over 100 year-round customers that I stopped offering that choice. Since that time, we've only offered year-round service. If they don't like that, we're not the company for them. We've grown more slowly now that we only take on year-round accounts. But since that time, we've grown to where we now have over 310 year-round accounts like that. So it can work. At least in some areas....

    I don't know. Maybe our climate is more temperate here in Portland than you area. It doesn't really freeze or snow here. Weeds and lawns are still growing in the winter (albeit more slowly). And then again, I live in a fairly affluent part of Portland too. The areas we serve are high income areas. So maybe our area just has more people with money or something. I don't know. But I just thought I'd give a little more detail on how we did it in the beginning. It was really offering the choice that made a big difference. Everyone wanted the lower monthly rate. So they'd usually pick the year-round package.

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