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commercial vs residential

4K views 20 replies 14 participants last post by  Service.com 
#1 ·
Hi all. I was wondering for those who are servicing both. What are the pros and cons to each? (Maybe I'm not wording this right but I hope you get the jist of it). Right now I currently only service residential properties but I am legit and am thinking about getting into servicing commercial properties. What can I expect when dealing with management, collecting payments etc. Like I said, I have been doing only residential properties but I feel like I'm cheating myself and I am thinking about expanding into the commercial market. Is it worth it or should I just stick with residential accounts? Any pros and cons or advise (good or bad) would be greatly appreciated.
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#4 ·
I do both and find a mix of both works for me. Commercial ring in easy money with less travel expense gas and wages. Don't think I will ever go solely commercial tho. A good friend of mine was solely commercial, his 2 contracts were 1)2 hospitals 2) 11 factories equalling 35-40/wk for himself and 3 employees. The problem he ran into...simply got under bid on both contracts and just like that bill collectors at his door and bye bye business. Like I said commercial contracts are great to have and easy money. Houses are safe....if you lose 5 houses to your 90 just say no biggie you'll get 5 new ones back in no time
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#6 ·
I do commercial

I get paid rain or drought
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That is a good point. I do small commercial now. I stopped doing large commercial. I could have continued the large commercial if I wanted to match Brickmans or Moons pricing. The pricing they used gave me too low of a profit margin. They were pricing mulch at $40.00 a yard installed and cut/trim 8 acres of lawn for $230.00 a cut. The contract called for 22 cuts a year, so if it did not rain I still worked, even if at slave labor rates.
 
#7 ·
The other draw back to large commercial is that they required more insurance than the minimum, and they paid very very very slowwwwwwwwwwwwwwwww. The last year I did it, I received the final payment for 2010 work in March 2011. It made me go back to smoking. The building was less than 50% occupied. Each building they owned was a Limited Partnership, so if they declared bankruptcy on that building I was screwed.
 
#9 ·
I prefer residential. Easy to do. I don't have to worry about the competition eyeing the property for next years bid. My annual income is stable.
 
#10 ·
I prefer residential. Easy to do. I don't have to worry about the competition eyeing the property for next years bid. My annual income is stable.
I don't think thats exactly true, Todd Palin, Bristol Palin, both have lawns within 5 miles of each other, TONS of people know where they live.
Dudes are always eyeing the properties thinking they can "make it big" if they did the Palin's Lawn.

Honestly, the Palins know tons of people and Bristol grew up with a lot of guys who just "suddenly" became landscapers, so people are always hitting them up to do the lawn.

So I guess that more or less depends on 'whose' lawn it is?

No one's really jockeying for position to get the "mcdonalds" postage stamp.
But it's also technically a commercial account.

If you ask me, Residential is higher net. Commercial require less hands on management.
 
#11 · (Edited)
I know it depends on the company paying but how long do you have to wait to get paid? Residentials that I have almost always pays on time. Do commercial accounts drag their feet with rendering payment? And lastly, how does one go about obtaining said accounts? When is the best time to inquire?
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I have no issues with late payment on any commercials I do. All of them are also smaller. All obtained by bidding before the season begins be it summer or snow
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#12 ·
Asking to go commercial is too vague of a question.

Before the economy took a dump in 2007. Many Landscapers claimed that the profit was higher in commercial.

Since then in many areas the profit is now higher in residential.

So in the past the status to be doing mostly commercial implied you where making big money. Now it is not a guarantee.

Then there is commercial and there is commercial. The dentist that turned a house on a 1/4 acre into his office where he turned the back yard into a parking lot and there is only a 1,000 SF of lawn left. Or Disney World.

The guy that lost his business because he lost two contracts was a bad business man.

The loss of anyone customer should not cause a business to fail. I never heard of a number given but I think that no customer should provide more then 10% of one's billing.

Also many commercials are now done through middlemen aka the nationals. I heard too many horror stories to work for a national.
 
#13 ·
Asking to go commercial is too vague of a question.

Before the economy took a dump in 2007. Many Landscapers claimed that the profit was higher in commercial.

Since then in many areas the profit is now higher in residential.

So in the past the status to be doing mostly commercial implied you where making big money. Now it is not a guarantee.

Then there is commercial and there is commercial. The dentist that turned a house on a 1/4 acre into his office where he turned the back yard into a parking lot and there is only a 1,000 SF of lawn left. Or Disney World.

The guy that lost his business because he lost two contracts was a bad business man.

The loss of anyone customer should not cause a business to fail. I never heard of a number given but I think that no customer should provide more then 10% of one's billing.

Also many commercials are now done through middlemen aka the nationals. I heard too many horror stories to work for a national.
Agree on the bad business man in ways in other ways just a matter of putting all eggs in one basket type thing. He held both contracts for several years and banked on past relations with the decision makers only to get under bid by 6-7000 dollars per year. That can happen to anyone. The bad business man part was the spending everything as money came in. Not reinvesting wisely. Leasing hummers to plow with instead of say dura max diesels.....list goes on.
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#15 ·
I don't think thats exactly true, Todd Palin, Bristol Palin, both have lawns within 5 miles of each other, TONS of people know where they live.
Dudes are always eyeing the properties thinking they can "make it big" if they did the Palin's Lawn.

Honestly, the Palins know tons of people and Bristol grew up with a lot of guys who just "suddenly" became landscapers, so people are always hitting them up to do the lawn.

So I guess that more or less depends on 'whose' lawn it is?

No one's really jockeying for position to get the "mcdonalds" postage stamp.
But it's also technically a commercial account.

If you ask me, Residential is higher net. Commercial require less hands on management.
Who are these Palin's that you speak of?
 
#17 · (Edited)
anyone who buys a hummer to snowplow with should be extradited and his contract should go to the next guy

I recently picked up my first commercial properties, only worth $30/wk mowing but i installed a $500 mulch job and have a landscape plan in worth almost $2k...i feel bad for the last guy that didnt show up often enough
 
#18 ·
We do a mixture of both. Commercial jobs can be easier because they will generally tell you what they want. You will almost always have a contract with everything they want told to you. It is easier to plan with commercial because they typically want the property done on a schedule the entire year. Residential yards there is the problem of people leaving things in the yard, birthday parties, somebody had to pay bills, or other family matters.

I've found that residential yards will often lead picking up more work, trimming bushes, mulching, or neighbors / friends seeing you work. Residential yards, in my cases, tend to pay more. At commercial properties they are always trying to get the lowest prices where residential properties often have a relationship with you. If you can get big commercial accounts it can lead to a lot of work but you often don't get the best price because you have other people giving bids and trying to undercut you.
 
#19 ·
I know it depends on the company paying but how long do you have to wait to get paid? Residentials that I have almost always pays on time. Do commercial accounts drag their feet with rendering payment? And lastly, how does one go about obtaining said accounts? When is the best time to inquire?
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A lot of commercial work is through the large property management companies, like your walmart's Home Depots national pharmacies ect.

Generally commercial work can pay up to 90 days out, and it can be a pain to collect from time to time. You're also talking about big money accounts, so sometimes you're mowing and maintaining blowing through Capitol just to wait around on a check. Depending on your operations size, your best bet would be to get your feet wet with some small locally owned accounts.
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#20 ·
Another point, commercial is all about price in my opinion, very few seem to care about quality. I'm going to post pics of the mulch job the quick Checks by me just got. It took everything in me not to go up to the idiot doing it and ask him what he was doing. No trimming, no weeding, didn't even spray the weeds, just a mess of black mulch all over
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#21 ·
Commercial comes with less headaches but more of a numbers game. Less people to talk to, no one really notices if you make a small mistake.

Residential, more client interaction, pickiness etc.

In general that I have found etc. We only have like 3 commercial but love the hell out of them. Bigger jobs, in and out. Everyone wants to head to commercial for bigger jobs and less headaches. There is a lot of money to be made in residential, it just takes more time and effort.
 
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