Contract Help

Discussion in 'Network: South' started by MowingOtter, Dec 28, 2012.

  1. MowingOtter

    MowingOtter LawnSite Member
    from KNOX TN
    Messages: 6

    Hey I am a teenager looking to move all of client onto contracts this summer. I have used all of my profits from last year towards a truck and a scag walkbehind. The way I have been doing it was billing the client everytime I mowed. I would prefer to get the client on a contract that I possibly sell when I go to college. I want to stop the client from canceling when they want to. I am interested in mulching and fertilizing too. So I need some ideas for a good contract. Also where could I get a trailer for around 400? Any help would be great.
  2. betterlawnsandlandscaping

    betterlawnsandlandscaping LawnSite Senior Member
    Messages: 255

    Good luck on asking that question! Inbox me
  3. Greenboy24

    Greenboy24 LawnSite Senior Member
    Messages: 297

    For a residential customer there really is no way that you can stop them from cancelling if they really want. Even if you got a contract and then they try and cancel a maintenance account (esp one with a bad relationship that would be sure to follow) is not worth legal action IMO. All they have to do is say you weren't performing the work to their satisfaction and they are pretty much out. Commercial contracts are a bit different but really not too much. If someone doesn't want you doing work anymore there is usually an easy out. Most maintenance contracts are in one way or another "At Will". Whether they are worded that way or not

    We contract commercial work but not residential maintenance. Some people do contract residential maintenance. I personally think its a waste of time and energy but to each their own. If you do any job over 1000 (plantings, patios, etc...)then I would be sure to get a contract for that. As you start getting into larger jobs you will want to include payment schedules that coincide with the work as its completed. This provides you with important cash flow throughout large jobs.

    Also, if you spent all your money to invest in the business, why do you want to sell? Seems like those two decisions have two different goals in mind. (although I guess it depends how old you are and how much time you have before college)

    One thing we have had a lot of success with is getting customers to prepay for the year. We offer 5% off and about 20% of maintenance clients take advantage of this. (I know that's a little unrelated but its something to consider.) Even for this though we don't have a formal contract written up. We allow people to include mulching, fert, cleanups and landscape maintenance in this as well.

    If you are planning to sell, you will get the most $ when you are willing to work with whoever buys it to aid in the transition and the payout would likely be over time based on revenues from retained clients.

    Best of luck
    Last edited: Dec 29, 2012
  4. MowingOtter

    MowingOtter LawnSite Member
    from KNOX TN
    Messages: 6

    What I was thinking was making a contract like this: I will do the following services for you. Take care of your mowing needs from March to Nov. (mowing 4 times a month in the wet season 2-3 in the dry) I will mulch your yard twice. I will aerate and over seed twice (April and Sept) and take care of your bushes when they need to be done. You will pay me $200 a month to do this. By signing the contract you will receive a %5 discount and priority over non-contracted clients. This contract is in affect for the entire 2013 mowing season. Something like that. I understand the buying and selling process. I cannot "sell" a client. But I can work with the buyer to make sure he gets the most of my business. As for goals, I did this so I didn't have to work fast food like my friends. :) Now, its great income and I might be able to pay for college by selling after highschool. Feedback would be great.
  5. Greenboy24

    Greenboy24 LawnSite Senior Member
    Messages: 297

    I would not do it that way if I was going to do contracts. Unless you are getting the money up front why give them a discount? That is just taking money right out of your pocket for no reason.

    I'm assuming the numbers you are using are just for example, if not thats another concern of mine.

    I don't see how a contract benefits you and in your above scenario it actually hurts you quite a bit.

    Where are you planning on going to college? Will you be nearby? What is your current workload and how many years until school? Do you have any helpers or partners or is it just you?

    NIXRAY LawnSite Senior Member
    Messages: 520

    as mentioned above those prices had better be for example ON TOP of a low price you want to offer a discount, you will not just take money out of my pocket but also us fellow LCO's, as well you will attract customers that are POS. all just imo
  7. MowingOtter

    MowingOtter LawnSite Member
    from KNOX TN
    Messages: 6

    I had a business this past summer with my neighbor. We had 12 or so clients. I used the money I made to buy a my equipment while he just put it in the bank. He had equipment from his dad while I had to work for everything myself. After the season was over I told him him I wanted to split because I prefer working by myself over working with someone and splitting profit 50 50. Currently, I have 7 or so residential clients that I will not start working for until March. The max these yard bring in is 200-300 a month since all my mowing has been in my neighborhood. How does a contract like that hurt me? I much would rather be getting one large(r) check a month than check after each time I mow. If you are thinking that I am under pricing how could I bring up my prices without losing clients? As for college, I would like to go out of state and I have two more summers to mow.
  8. Greenboy24

    Greenboy24 LawnSite Senior Member
    Messages: 297

    You are hurting yourself if you give people a discount who decide to pay monthly because you are giving them savings (lowering the money that YOU will be getting) with absolutely no reason. If the reason that you want contracts is to get people to pay monthly instead of weekly then just inform your clients that they will be billed monthly for maintenance services and per job for other things such as mulching if you wanted. Or set it up however you want but you don't need to provide an incentive for clients based on how you bill(unless they are prepaying). Great part about being a business owner is you make the rules.

    I would say this though, its not a bad thing that people are paying weekly. Cash flow is huge. Most larger businesses do monthly because thats how most any bill you will ever come across is structured so its considered the norm. Credit cards, trash pickup, mortgage, insurance etc are all monthly bills so people are used to that. I wish all our customers paid immediately upon service but that's not realistic

    What are you planning on going to school for? Do you want to be in the landscape industry after college? How much did you guys gross this year? 20-30k?
  9. MowingOtter

    MowingOtter LawnSite Member
    from KNOX TN
    Messages: 6

    OK, that makes sense. I like having monthly income rather than by the job. Another reason I would like to be able to have a contracts is to be able to sell the client when I am done mowing. I will be studying Business Management in college. Don't plan on coming back into the business. Umm, we made less than 10k....
  10. ToddH

    ToddH LawnSite Silver Member
    Messages: 2,192

    Wait, I just skimmed this thing but here are a few comments.

    no one knows his prices / lot sizes so to say 200 a month is cheap is wrong.
    maybe the wording is wrong but you can discount for bundling services but you need a actual vs billed recovery clause.

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