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Full Service Commercial Accounts - Cutting Corners

Discussion in 'Lawn Mowing' started by DFW Area Landscaper, Aug 4, 2004.

  1. DFW Area Landscaper

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

    When you draw up a contract/bid for a commercial account, do you include a preventative plan, like Merit apps, for the lawn and shrubs?

    Merit is very expensive. It would be real easy for a competitor to leave that out of the bid and then try to treat pests as they become a problem. Or even charge the customer extra for pest control in the event that there are problems.

    The thing I'm seeing on this process of winning long term commercial contracts is becoming clear: If you try to get a low price out there (by trimming shrubs less frequently, for example), those corners that you cut could come back to bite you in the butt...and probably will. The decision maker probably isn't going to remember six months from now that they went with the low bid. They're going to expect high quality and if the shrubs need trimming, they're going to complain.

    Of course, if you leave no stone unturned, merit apps, fire ant controls, prune the trees properly...turn key everything...I can see where your price could easily be two times what they're currently paying for landscape maintenance if they're currently on a "corner cut" plan.

    I'm halfway tempted to create a policy for all commercial contracts. Full service everything. No corner cutting to win with a more affordable price. 1.) Crews don't have to remember what is included on this property vs that one...they're all treated the same. 2.) Customer complaints will be warranted because they are paying for the property to look nice at all times...every aspect of it...you get a complaint, you deserve it 3.) You should always be able to point to several properties you are 100% proud of to a new prospect and tell them to just go take a look for themselves without having to explain things like "Well, the lawn looks good here, but the customer elected not to go with the mulching of the beds and insisted on trimming the shrubs only once per year."

    Any advice or input is greatly appreciated.

    DFW Area Landscaper
  2. Rtom45

    Rtom45 LawnSite Senior Member
    Messages: 456

    Submit a base bid, then itemize add ons. The customer can work with you to design the level of service they want. Make sure they understand up front, that what they select now will not change later in the year.
  3. BCSteel

    BCSteel LawnSite Senior Member
    Messages: 876

    It all depends on what kind of commercial that you are targeting. I started off with any commercial work just to fill my schedule. Now I am slowly weeding out the lower end accounts to focus on the middle/upper range for just the reasons that you stated.

    For most props I dont do pre ems but treat it as it comes, which is stated in the contract, and that is pretty much my only variable between contracts, just to keep it all simple and uniform.
  4. Mr. Magpie

    Mr. Magpie LawnSite Senior Member
    Messages: 325

    People who want you to be responsible for the way the property looks (as opposed to merely performing tasks) and then wanting it for cheap..... :rolleyes:

    I agree, cutting corners is bullcrap. If you feel you have to cut corners to keep your business going, there is serious damage already done to your business.

    I think the key here is getting the decision maker to think of your service in terms of tasks needing to be completed. RTom's idea is great. This way, if the client decides that their property doesn't look good 6 months from now, and they are confident that you have been fulfilling your duties, then the only option in their minds is to add on new duties, which of course cost more. This is a healthy perspective for a client and needs to be communicated to them by you in some way.

    Duty-based work is the best, results-based work is a headache and a time-bomb. My bro and I have been preaching this for a while.
  5. mtdman

    mtdman LawnSite Gold Member
    Messages: 3,143

    That's the double edged sword that is commercial work. They want the lowest bid, to stay in budget in the spring. Then when the place doesn't look so good mid-season, they wanna know why this and this and this isn't getting done. Either way, they are never happy. You are either too expensive, or you aren't getting everything done all the time.

    No thanks. I'll pass.
  6. all degree

    all degree LawnSite Senior Member
    Messages: 344

    MTD man said. You will find the same "want it done cheap" "why doesnt it look good" attitude with comercial as you do residential.
  7. mtdman

    mtdman LawnSite Gold Member
    Messages: 3,143

    Yes, this is true. But there are a lot more residentials that don't want it done cheap, but done well. People who care about how their lawn looks, have loyalty to their lco, and don't open up their yard for the lowest bid every year. Those kind of people are my bread and butter, it's who I've geared my business toward for the last 8 years or so. Commercial jobs just seem to have so many drawbacks and pitas for me, I mostly don't bother.

  8. trying 2b organic

    trying 2b organic LawnSite Senior Member
    Messages: 566

    The absolute key to winning a bid then still making money is to list the bare minimum in the contract but list it explicitly, then bid later on all recommended "extras". This is working well for me so far. I put a bid in on maintaning the lawns only, or if I have to, the lawns, some fert, and pruning twice per yr. Anything extra is extra. And yes, to keep the property top notch there is something extra every month. But this way, the bid is low so you get the gig. they know going in that so far they have only signed up for basic maintenance. Now you will start telling them about the other things they need, then, as always, it is up to them what level they want the property to be at. I could go on and on about why I think this is the way to go but Ill leave it at that. As you get further into it you will come back to this method. Plus, dont tell anyone, but rather than pay a lawyer hundreds of dollars, I downloaded and modified my first contract and will use that as a template for future.
    Plz keep us posted as to what works best for getting commercial contracts as I want some more of them. I know you mentioned cold calling and want to know if that works for you.
    So dont bid high and bid to include everything YOU think the property needs to be top notch. Let them decide on an ongoing basis, its win win. The problem with an inclusive bid is people want steak at bologna prices.
  9. trying 2b organic

    trying 2b organic LawnSite Senior Member
    Messages: 566

    One more thing, the beauty of this method is you avoid that crap of them saying, why isnt this or that done. The only thing done, as per the contract, is that the lawn was cut. Yes, I do recommed you have that done, and this is the price... nice.
  10. Precision

    Precision LawnSite Silver Member
    Messages: 2,995

    I talk with the prospective client prior to submitting my bid to see what they are looking for and to sound out why they are entertaining my bid. If I get the sense they are looking for the lowest bidder, I address that head on.

    "Mr. Jones,I am not the lowest priced person out there, nor do I want to be. Is that your primary consideration?" If they fess up and say yes. "Mr. Jones, I don't compete on price, so I seriously doubt that I will get the bid. Would you still like me to tender a bid?"

    Quite often they will save you the time and decline. "Thank you for your time and good luck." I leave my business card with them. Who knows, when Scrub Jr. gets the bid and screws it up; paying a little more may be worth it.

    Keep an eye on the property if it starts going to hell, give a follow up call after 6 months and express an interest again.

    From my limited experience, the grass isn't any greener on either side. Prices may be a bit higher on commericals, but the cost of underbidding a job or two more than balances that out. If you can get clients in either category that are more interested in how the property is maintained, than if they pay a few dollars more, you will make money and have few headaches. If you allow yourself to take on clients just to get some cash flow, then you are going to have no end to problems.

    MTDman has a point, but those same type of people exist in the commercial side too.

    I have been submitting bids that are itemized and I print up the amounts page in spreadsheet format and give a 7-10% (bottom line) discount for taking all services. Of course I pad in the discount a little in each category and I front load the items that they can't avoid like mowing and trimming.

    So far that works for me.

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