Commercial Is The Way To A Real Lco Now

Discussion in 'Lawn Mowing' started by PROCUT1, Aug 22, 2004.

  1. PROCUT1

    PROCUT1 LawnSite Platinum Member
    from TN
    Messages: 4,891

    I did post this in a reply to DFW however because I went on a tangent and typed like a mad man I figured this deserves its own post.........


    If you think residential is bad....wait till you see the games the commercials play when it comes to paying..... Wait till the first time a multi-thousand dollar check gets " held" because of something minor that you did or didnt do.....Or when you try to enforce a late payment policy and they reply "This is how we pay....if you dont like it we will gladly find another service"

    I stopped large commercials and condos a couple of years ago......Id rather my competition be on the balls of their ass waiting for the money than me. And most of the time the money is peanuts anyway because " myself guilty as well" everyone starting out seems to get into this mentality that "

    " If i get that commercial job that'll mean Im a real business now"

    Everyone at one point or another gets the idea that " commercial is the way to go"


    1 market is saturated with guys with that same idea

    2 Most guys have no real idea how to bid these properties

    3 Lots of guys dont care if there making money on the job because to them its a "status symbol".

    4 Property managers for the most part do go by the numbers. and they want 10 times what they pay for.

    5 While some exists, there is generally not a huge amount of loyalty. If i am a good salesman and i promise good work and a good deal, for less than you....I WILL get the job.

    6 There must be a book somewhere called " 1000 ways for a property manager to screw or delay payment to the lawn service"

    7 Its one thing to have a $ 150 lawn pay you late but what about that $5000 a month condo that youre already barely breaking even on. When they get 45 days past due and tell you " Sorry the treasurer was on vacation at the last meeting so we didnt pay bills, well try to cut your check next month...

  2. BCSteel

    BCSteel LawnSite Senior Member
    Messages: 876

    Must suck to do business in NY. I have none of those problems.
  3. Up North

    Up North LawnSite Bronze Member
    from MN
    Messages: 1,063

    PROCUT1, sounds like you got the shaft a couple times, that sucks and hope all is working out for you now.

    This is my first year in the biz and I have all commercial accounts except for one. I haven't experienced anything like you discribe, actually it's been the complete opposite. I've had nothing but excellant comments on my service, and they all pay within 2-3 weeks, except for one, they are right at 30 days or so.

    If they need something extra done, they know it comes with a price and have never balked at the price.

    Like I said, it's only my first year so things could change I suppose, but so far so good.

  4. Tharrell

    Tharrell LawnSite Silver Member
    Messages: 2,967

    I've experienced the games they play during bidding (if you can call it that). I can only imagine about payments.
  5. LwnmwrMan22

    LwnmwrMan22 LawnSite Platinum Member
    Messages: 4,373

    Hmph, I had to wait the longest with residential customers.

    I got out of the residential market for all the reasons that ProCut stated.

    If you've got a $5000 condo that you're barely breaking even on, then you're right, people don't know how to bid these properties.

    My biggest monthly check is $5500, from the local school. I send the invoice on the 1st for that month's work, I have a check on the 12th. I could have it on the 10th if I wanted to pick it up, but I'm too busy making other money.

    I guess if you've got those problems, then you just flat out need to look for a different customer that plays by your rules, it's pretty much that simple.
  6. Five Star Lawn Care LLC

    Five Star Lawn Care LLC LawnSite Bronze Member
    Messages: 1,006

    it sucks that you market is so bad....

    we target the full service accounts where money is not an issue...where we know as long as we do our job that we will get our contract signed year after year...after being in the business for several years you begin to smell trouble and if i go on a bid and i smell trouble i will just decline on bidding. simple as that.

    i dont play games with my business and if someone is not willing to pay for great service then im better off not taking it any further..

    and as far as late paying....all the people we have had to take to court have been residential....
    I do have some national corporations that do take quite long to pay because of the fact that it has to get cleared through accounts payable in corprate and sometimes i wont see a check for 60 days...then on the other side of that my largest contract which is over 90k are the best payers on earth...i will ussually do invoicing on a friday after the end of the month and mail them on saterday...i have a check in my hand and ready to deposit on the best thing in the world

    sorry about your bad experiances in the commercial market...its where the real money is :)
  7. SWD

    SWD LawnSite Senior Member
    Messages: 988

    Commercial acounts, for me, here in Texas, are the way to go.
  8. DFW Area Landscaper

    DFW Area Landscaper LawnSite Silver Member
    from DFW, TX
    Messages: 2,116

    ++++Its one thing to have a $ 150 lawn pay you late but what about that $5000 a month condo that youre already barely breaking even on. When they get 45 days past due and tell you " Sorry the treasurer was on vacation at the last meeting so we didnt pay bills, well try to cut your check next month...++++

    Why wouldn't you just suspend service in a situation like that?

    If you've got them in a long term contract, they can't drop you unless you are in breach. As long as you are doing what you're supposed to be doing, they can't really threaten to go elsewhere because you had the balls to suspend service. My contract clearly states that service may be suspended if payment becomes more than 15 days past due. Sure, there are large corporations with A/P departments that will pay really late, but those are the most likely to be financially able to pay anyway, so there's no reason to suspend service on them.

    Personally, if I had a choice in the matter, I'd rather have the $5,000/mo condo pay me late than the residential $150/mo home owner. There's a very strong chance the condo will pay, where as the home owner might just out and out stiff you.

    DFW Area Landscaper
  9. locutus

    locutus LawnSite Bronze Member
    from NC
    Messages: 1,266

    All of my accounts are residential. Is it true that commercial accounts like to "float their assets" to keep the money in the bank as long a possible? I suppose if there were enough money in the account the interest could add up.
  10. LwnmwrMan22

    LwnmwrMan22 LawnSite Platinum Member
    Messages: 4,373

    I would say that's true to a point, that they use the excuse that an invoice has to take a certain amount of time to clear everyone.

    During that time, your money is in their account making them interest.

    No different than paying in too much on your witholding to the fed / state government though. It takes much longer to get that money back.

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