fixed price, monthly billing

Discussion in 'Business Operations' started by scott's turf, Aug 19, 2002.

  1. Lawn-Scapes

    Lawn-Scapes LawnSite Silver Member
    Messages: 2,810

    This year I went with the 10 month billing agreements (that 20 of 28 clients agreed to) and it has saved my butt big time!

    As I drive by and look (there is really nothing to do.. but look) at my crisp-toasty lawns, I can't help but wonder what the customers must be thinking.

    So far (fingers crossed) noone has complained and all payments keep coming in on time.

    In my agreement I did not specify an amount of visits and based on weather conditions.. I would decide whether the lawn needs cutting or not. BUT they know it's based on approximately 30 visits and I did not anticipate a drought as drastic as the one we are STILL experiencing.

    I can't help but feel guilty about giving them only 25, 24 or maybe less if this goes on and on... I'm also worried about them committing to the agreement next year.

    I think most understand but if anyone questions it.. I was thinking of telling them that I will compensate them next season.. lowering the price by a couple of visits.

    What do you think?
  2. GroundKprs

    GroundKprs LawnSite Bronze Member
    Messages: 1,969

    Scotty, for my flat rate contract, cancellation clause reads: "cancellation during the contract will be resolved by an itemized billing for services rendered to date of cancellation, plus one months contract fee. Any balance due or credit refund will be paid within 10 days of cancellation."

    When L&M speaks of balancing the billing out in the last two months, he isn't speaking of flat rate pricing. Rather you are thinking like a budgeting plan, as the utility companies try to sell. I would stick with an itemized or flat rate billing, rather than this type of budgeting plan. Less paperwork hassle.

    And like I stated before, you are selling a service, not a specific number of visits (at least that is the clientelle you'd like to have, LOL). A friend in the business sells his snow removal with a minimum of 10 pushes (billed 3 {minimum} in Dec, 4 in Jan, 3 in Feb, extras in Mar). If we have only 5 snow events, he still gets paid for being available; and with his dependability, he's earned that! I've seen him have his lots cleared well before streets are open in big storms.
  3. I don't state any number of visit, only a period of service mid-apr to early nov. both clean up include and mowing schedules is written like this: 5 to 9 days on active growing periods, each others week on drought period (usually end of july to late august) and fall. ( i may be there weekly to pick up some leafs).

    And i also state about no cut at all if there is severe drought.

    That way the number of cut is about the same as a weekly basis, but they are done on a better schedule (listen to mother mature, She is the Boss),

    customer does'nt have to worry about how many times i was there, how long i stay there.In fact they prefer this, they already know how much it will cost for the entire season. This is the average law.
  4. Doc Pete

    Doc Pete LawnSite Gold Member
    Messages: 3,469

    I stopped worrying about the ups and downs of flat rate billing because it all averages out in the long haul. I've gone through two droughts and a few "never stop mowing" years, and it really does seems to equal out after time. It's a fair system and the customers know in advance their payments. Last year we started 3 weeks early and never stopped mowing every week even in August......It works for me...........
  5. HBFOXJr

    HBFOXJr LawnSite Bronze Member
    Messages: 1,712

    You guys have to get out of your systems the guilt & feel sorry stuff and the notion that your clients think like you do.

    You are in business to make money and you do that by rendering needed services or being available to render services. Get over it. There is no need to grovel or slave for a dollar.

    Just because there is a drought doesn't been you don't have operating costs to meet. The bills come in whether you work or not. Only thing to add when you are working is the labor and consumables like fuel. blades, belts etc.

    No need to make amends next year for lack of cuts this year. Then your going to cut yourself short becasue it is a rainy year and your gonna do 2 or 23 more than you planned or the weather will extend the beginning or end of the season with the same results.

    As long as they are paying and your delivering the best look possible That is as it should be. It is not a problem.

    In pricing flat rate the only thing that could ever vary was the cut count. Your always going to deliver the mulch, annuals, shrub trimming and pruning, ferts, clean-ups etc with out variation.

    I always priced my non-irrigated site contracts 2-4 cuts less the irrigated ones.

    Another way to handle this is with good software and specify a minimum number of cuts and a price per cut when exceeding that. NEVER give anything back unless you get something in return. It is not your job to be a benovolent contractor.
  6. KerryB

    KerryB LawnSite Senior Member
    Messages: 661

    Our customers have not complained one bit. Our contract states in time of drought I make the descision as to whether or not the lawn gets mowed. It also states that no adjustment will be made if lawn is not mowed.
    This covers my company as well as the customer. For ex. in the spring when the lawn needs cutting more often they know they pay the same amount so now they do not fuss.
    I think you should stop feeling quilty for your prices and start looking at it from the standpoint of making money. After all isnt that why we do it?

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