commercial accounts! Am i crazy?

Discussion in 'Lawn Mowing' started by Eric's Lawnservice, Sep 5, 2013.

  1. HenryB

    HenryB LawnSite Bronze Member
    Messages: 1,849

    Commercial accounts are given to the lowest bidder. That's really it. Often they look for someone a bit dumb or desperate; willing to work for free to appear like the "big" guy. LCO's are notorious for wanting to be the big shot to our peers. I have multiple close friends and family members with very big commercial accounts. I do zero work for them and we have a great relationship. At holiday party's they often talk about how stupid we are and how we'll work for nothing even lose money weekly. PS these guys also due their homes for free.I wonder what else they would due to have "the honor" to maintain their properties. It's really sad.
  2. JimLewis

    JimLewis LawnSite Fanatic
    Messages: 6,876

    I agree. Very good analysis. So many LCOs take on commercial because of the "big ticket" dollar amount and because they think it gives them more credibility. Unfortunately, they usually go into it not knowing their numbers. That's why they underbid everyone else. They are just losing money and they don't know it yet. I see companies like that come and go all the time. I have three guys working for me as crew leaders and top managers at our company who used to run such outfits and couldn't keep it profitable. They went out of business and are now working here. It's a tough business and understanding your true costs and profit is a very time consuming and difficult thing to really manage and understand. Obviously, most LCOs aren't really great financial analysts. You combine that with the big egos most of them have and it's no wonder they're underbidding stuff like this, regularly. Then they eventually go out of business. But it often takes years.

    Fortunately, there are some bigger commercial companies who realize this and are more interested in a long term relationship and professionalism. So they'll go for the higher bids with more established companies. Unfortunately, these are few and far between. And I'm not interested in fighting for them.
  3. PenningsLandscaping

    PenningsLandscaping LawnSite Bronze Member
    Messages: 1,853

    is that 250 a month including the 11 yards of mulch and fert?? you will definitely be getting a call about lowering your price a little to pick up the account when this idiot can't deliver
  4. HenryB

    HenryB LawnSite Bronze Member
    Messages: 1,849

    Problem is the idiots deliver often for a few years, then declare the industry sucks and gets out. The customer is left with this upsurd number (price). Sadly there will be a desperate newbie with low self esteem willing to mach it. Folks this is the commercial market.
  5. PenningsLandscaping

    PenningsLandscaping LawnSite Bronze Member
    Messages: 1,853

    I just can't fathom working for free on something like this. The 250 alone to me barely covers the mowing, which less fert and mulch.
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  6. Eric's Lawnservice

    Eric's Lawnservice LawnSite Member
    Messages: 173

    That's exactly what I thought when they sent me the price they were quoted. I guess they thought I would do all the extra out of kindness or just for appreciation for the privilege to service the property. Lol! It was really kind of insulting. I sent them a professional reply stating basically I appreciate their interest in my services and have a good day. I'll probably loose their residential account, but oh well no big loss there. The funny thing they jumped on 45.00 cut every two weeks for their 1/8 acre residential property two months ago. So in retrospect they wanted me to service the commercial property for basically less than three times more than I am doing their residential for. Crazy!
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  7. hackitdown

    hackitdown LawnSite Silver Member
    Messages: 2,648

    Some guys feel that there is status in servicing commercial accounts. Or high end fancy neighborhoods. They will drop their price and throw in freebies just for the glory of parking their trucks in front of these "important" customers. Or they take endless crap from these picky customers over quality just for the honor of working in their hood.

    The famous "sure I'm losing money on each customer, but I'll make it up on volume!"

    Give me a retired couple in a 1970s ranch with no fert or sprinklers, just mow blow and go for $50 per cut. That is where the money is.
  8. jkilov

    jkilov LawnSite Bronze Member
    from MS
    Messages: 1,415

    I would do it for $4000 no problem, if in conjunction with the commercial mowing codex. I think the original poster (Eric) just hasn't been in the commercial market for a while. Allow me to translate the specified workload using the unwritten commercial mowing codex:

    - weekly mowing and an alternate price for bi-monthly mowing, there is (108,000sf turf) about 2.5 acres: Weekly what? It will be cut every 2-3 weeks depending on growth, don't mow until the grass gets over 1 foot. Set deck height to 3-3.5" and floor it, cut quality is next to irrelevant.

    - trimming (roughly 45 min worth): The outside perimiter (fence) will be trimmed every 2-3 weeks, with all inside obstacles done 1x per month.

    - edging (3200) linear feet): Follow-up with the trimmer 1x per month or edger every two months, as long as the edge is visible, it's OK.

    - blowing off parking lot (4800sf): Done 3x per year during the intense fall months, if parking lines can be seen through the leaves, there's no need to blow yet (legit), the rest is left to the wind.

    - color change two times a year with routine bed maintenance (900sf total bed area): Bed mix with Oriental lilies and Siberian irises should work. Till up every 2 months and Roundup as needed.

    - 11 yards of mulch one time per year: 1.1 yards of mulch (codex compensated) with the rest being a mix of collected clippings and shreaded leaves on-site.

    - they also wanted turf grass weed control and fertilizer program for (13,000sf) in the front of the business. Mulch instead of discharge in front of the business every 2 weeks, fertilize 1x per year in spring.

    - As well as trimming 12 small shrubs as needed and pruning 6 medium sized crepe myrtles. Shrubs trimmed 1x per year (August) and Myrtles pruned 1x per year (late winter). Pruned branches go through a gas powered chipper on-site and back as bed mulch.

    For $250 per month a bit tight, $350 should be OK and it's honest money.

    Will the customer find the work acceptable? Most likely yes.
    Will they complain next year? Yes, about the price, not the work.
    Why are commercial customers like this? Because you would likely do the same.

    Drive around your area and look at factories, warehouses, railroad stations and tell me what you see. Weekly manicured grass? Nada. For most businesses landscape maintenance is just unwanted expense and they will seek to avoid it as much as possible.

    If you owned an abandoned barn, a small warehouse or a small family business what would you be willing to spend to have it maintained? $10-$15k per year? I don't think so. Most will pay to get a paper (receipt) to prove they're doing what the state demands them to do. Some will even settle for a paper that lists the state minimum yet will pay and be happily satisfied with even less.

    Should you like commercial accounts? I don't like them, but I need their money to survive. That's why I shut up and adapt to their means. The work can be rationed / done reasonably well with some honest money to spare. Sadly there's not enough residential accounts in my area since the great factories went bust to fill my schedule.

    Regards. :usflag:
  9. Eric's Lawnservice

    Eric's Lawnservice LawnSite Member
    Messages: 173

    Wow talk about cold reality! Thanks for the post. That doesn't make dollars, but I guess it does make sense!
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  10. PenningsLandscaping

    PenningsLandscaping LawnSite Bronze Member
    Messages: 1,853

    Residentials will always be my main focus. It's simple, when low balling scrubs see a massive account up for grabs, they hawk it and try and take it for themselves. Easy money, spreading garbage fert, garbage mulch, and walmart flowers with a few cuts a year done by themselves. These big accounts are just a burden. You put so much on the line taking them, just to get burned. Homeowners are less likely to start collecting lowball offers and more likely to call you back when Jose on his craftsman tractor sends a baseball through the kitchen window.
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