Going to a flat rate next year

Discussion in 'Lawn Mowing' started by newbomb, Sep 22, 2007.

  1. newbomb

    newbomb LawnSite Senior Member
    Messages: 391

    I have taken a serious financial beating this year with the weather being so dry. I have flat decided I am going to charge a flat rate per month next year.

    I am concerned that I will lose a good number of clients and will probaly have to remarket to find new work. One more season like this and I won't be back.

    I hate to start over after 20 years but the up front costs and fuel are just too high to mow "when it needs it".

    Any thoughts or encouragement would be appreciated
  2. Andrew's Lawn Maintenance

    Andrew's Lawn Maintenance LawnSite Member
    Messages: 83

    Thinking of doing the same thing, but don't know how to mention it to my customers in the 25 cut / season contract? I am going to add up the total of cuts = 25 and multiply that by the price per cut and then divide that number by 6 months. this should make it easier for me and the customers. Online billing!!!

    Ex: 25 cuts / season times $60 / cut = $1500 divided by 6 months = $250 / month
  3. carcrz

    carcrz LawnSite Silver Member
    Messages: 2,085

    did the same thing last year. Be ready for those PITA customers to say Bye Bye! All of my customers that actually appreciate our work instead of just plain cheap & lazy were very understanding of the change. Just let them know that you are running a business & that to cover your operating costs year round you must go this route. If they want to pay by the cut, they can call up the neighbor boy & take their chances.

    One thing I didn't do when I made the change is raise any prices like I normally would have. They'd have really thrown a fit the first go around if I raised their prices too. I'll probably leave them the same this next year, then raise them the following.

    HOOLIE LawnSite Gold Member
    Messages: 3,981

    I think you'll be much happier next season newbomb. The flat rate is great, it does pretty much eliminate those cheap customers like someone mentioned, and overall you'll be shocked at how LITTLE your customers pay attention to the cutting frequency. I thought it would be the opposite, customers calling complaining that I skipped a week, but you will end up with the type of customer that is not interested in monitoring their lawn conditions.

    I find I can avoid those regular price increases too...with most customers getting a skip or two during the season, saving the gas and labor on a couple weeks while still getting paid for them is a price increase in essence.

    Say for example a $35 lawn times 30 cuts, that's $1,050 for the season split over however many months you do it. But skip it just 2 times and it becomes a $37.50 lawn ($1,050/28 cuts= $37.50 per). What I do is, the customers that always get some skips throughout each season, I just keep their price the same each year.
  5. mattfromNY

    mattfromNY LawnSite Bronze Member
    Male, from Central NY
    Messages: 1,582

    I'm in the same mode. This year is only my second full season of full time, but next year will be seasonal contracts. Easier bookkeeping on my part, easier budgeting for the customer...
    I was thinking of offering a discount to those who would pay up front for a few months in advance, say their normal monthly fee is $250, maybe I'd knock off 10% for three months or the whole season paid up front. I figure the same as Hoolie said, we'll more than likely skip at least once or twice, and that should cover the discount.
    The upfront money will help me to pay my insurance and some other usual monthly bills up early and save the extra couple bucks 'Service fee' that I get charged monthly. And to maybe help me buy mulch, topsoil and seed, etc. that I can buy in bulk to save a few bucks, knowing that I will buy it anyway. Every time I save a buck, its one more toward my first million!
  6. DuraCutter

    DuraCutter LawnSite Senior Member
    Messages: 806

    When your back is up against the wall like now, you're better off to charge by the month. You're right, just because the weather is dry doesn't mean the bills stop coming in!! Who care how many you'll lose, if you don't do it, you won't have any left to lose, you'll be out of business!!

  7. Chilehead

    Chilehead LawnSite Bronze Member
    Male, from Stockbridge, GA
    Messages: 1,969

    I have been in business for 5 years, and have charged a flat rate for the last 4. Some of the bigger jobs will have a contract divided by 12 months to lower the clients bill and provide cash flow in the winter.
  8. cutedge

    cutedge LawnSite Member
    Messages: 99

    That's why we can't all depend on mowing as being our total income. If you charge a customer $250 per month and only cut his/her lawn once within that month because it wasn't growing, no doubt you will have some pissed off customers and I don't blame them, but they do have to understand our side of the situation. It's a tough decision to do flat rate pricing. Try pushing irrigation to all of your customers. You would be surprised to see how many of them would seriously be interested in it, and it's really good money
  9. topsites

    topsites LawnSite Fanatic
    Messages: 21,653

    What I see the problem being with some business owners it's always feast or famine...
    When times are good they spend like there's no tomorrow, then times turn bad here we go again.
    I know, I been through it several times, and I got tired of it.

    You gotta do what you gotta do, certainly some Lco's are hip with this method but I got other ways to get rid of the cheapness...
    I got folks who dropped me for the cheaper guy calling me back now, and I take them back on, don't forget the price went up thou.
    You know, it ain't that hard, they always come back, sooner or later.
    Fire me / drop me / don't agree right away (gotta think about it)? +$5
    Those whose lots I can't deal with servicing? +$5.
    Give me a hard time, jerk me around? +$5
    Man, always raise prises on your bottom 15% by +$5, be that by the hour or per cut or whatever.
    And keep raising the price until your truck WANTS to turn down that street again.
    That way I don't gotta change everything around, more than anything I find customers dislike CHANGE.
    Of course they hate the price increases, but nothing is worse than when things change.
    Me, no sir / ma'am, same service as always, yup, sorry bout the price hey....

    I took a beating this year as well, that never changes, there always will be hard times.
    But I also still got money, I really don't want another slow year but at the same rate I'm like bring it ON!

    Here's the trick:
    WHEN times turn good DON'T splurge your money!
    Keep living as if it was always hard times and save, save, save.
    Always save as much as you'll need to survive 2-3 years or more FIRST.
    Then, when the hard times come around again, it's not so bad.

    You gotta live within (No, below) your means, and it never stops, good times or bad.

    That's how I do it, you have NO idea how long I been living like times are always hard, just keep living like that, don't live it up when times turn good that's what burns you.
  10. topsites

    topsites LawnSite Fanatic
    Messages: 21,653

    Maybe that's not it :laugh:

    But one thing I find works good when times are hard, is go back to the basics.
    Take a good look around and find what got out of hand, and stick to the main things that made you do good the first go around.

    That's what I do a lot, I look back at the year and see where I went wrong, and take all of that and I usually see it was a deviation from the standard that messed me up, nothing else than that, just have to get back on course and stay on it. I don't think tweaking methods is a bad idea, but outright change? I am not so sure making a big change during a transition is such a good idea, that is assuming next year will be good, but what if next year is hard also, it would be better to implement such a change when your company is able to take a beating vs. when you're already reeling...

    Just my take on things.

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