Help with residential contract pricing

Discussion in 'Bidding, Estimating and Pricing' started by cdt82002, Aug 12, 2019.

  1. cdt82002

    cdt82002 LawnSite Member
    Messages: 3

    Hi guys, this is my first post on this website. Needing some help determining year round contract pricing maintaining an entire lawn.

    I've been in the business a couple years full time and mostly do bi weekly mowings and then any other maintenance like bushes is charged on a per needed basis.

    Last year I took on a couple customers wanting year round service with cuts on average every week. My main customer switched from another landscaping company that was charging $170 to me because they were increasing her price to $249. Well her yard is probably $50-$60 cut by itself plus I usually end up trimming around $25-$50 bushes almost every visit. Obviously the best part about the deal is I get a check year round and SOMETIMES I don't have to do anything but mow the front(rarely does that happen though..) with slightly less services in the winter..

    I feel I've been shooting myself in the foot so far this year and they are getting the end of the deal..

    Could someone make some suggestions or is that what most year round contracts look like? Thank you!
     
  2. jlbf0786

    jlbf0786 LawnSite Senior Member
    Male, from Charlotte, NC
    Messages: 728

    Welcome to the site, you can get at least a few valuable recommendations on this subject.

    I began much the same way you did, alacart type services. I gradually transitioned my pay per cut customers into annuals by just talking to each of them face to face and explaining how year around service is in their benefit. In the particular case you mentioned, it sounds like it'd be a hard sell unless you can keep the property on a bi-weekly schedule and still profit throughout the year.

    For $170-$200/month on the average 1/3 acre property you can offer the following:
    Mowing services every 10 days (36 max)
    Pruning up to 3 times yearly
    ** discounted prices for turf mgmt services (aeration/seeding, fertilizers and weed apps) "like say 20% off your regular price"
    ** discount on mulching, etc..

    It actually helps to have all of this on hard copy so they can take it and mul it over. Don't make it an ultimatum or she may drop you.
     
    cdt82002 likes this.
  3. OP
    OP
    cdt82002

    cdt82002 LawnSite Member
    Messages: 3

    Should mention I'm charging $200 per month
     
  4. jlbf0786

    jlbf0786 LawnSite Senior Member
    Male, from Charlotte, NC
    Messages: 728


    You should be fine, I probably wouldn't include a ton of extras
     
    cdt82002 likes this.
  5. OP
    OP
    cdt82002

    cdt82002 LawnSite Member
    Messages: 3

    Yeah the agreement we have is I cut the grass as needed.. Usually every week or its a pain to cut.. I have to push mow and bag the grass, the front has a big slope too, keep the bushes trimmed, spray for weeds as needed and whatever other random things she asks me to do.. I feel like I've been kicking myself in the teeth every time I go because it's not exactly an easy yard to cut. I end up doing probably $400 worth of labor for $200 every month in season and about $200 in the off season. Someone else was doing it for $170 before me which doesn't even make sense.
     
  6. Green Industry Pro

    Green Industry Pro LawnSite Senior Member
    Male, from Tyler Texas
    Messages: 581

    I felt exactly as you did when I started. I would always do more work than I was getting paid for because I wanted happy customers and good looking properties. I wanted to grow and I wanted referrals. Being underpaid for services is worse than not having the clients. It will burn you out physically, mentally, and financially. The work costs what it costs. Pay or don't. If they can't, work with them on how to alter services so that you still get paid, but it can meet their budget. Don't do more for less money, do less for less money.

    I don't have any pay as you go customers. Every customer is setup for monthly billing, card on file only, and 12 month plans. I changed to this for 2019 and its the best decision I've ever made. I'd pray more LCO's made this decision. Its easier on their part, easier on yours, and customers like "easy".

    When you look at a property, figure out the total cost of work you will need to provide for 12 months. Add it up and divide by 12. That is their monthly bill. You can give them a schedule letting them have an idea when you'll be providing certain services if you want. This opens you up to get paid year round, lowers their monthly bill, and gives you freedom to do the work as needed with no haggling or office work.

    Make sure you have a disclaimer saying that if they drop you mid season, you have the option to back charge them for works that were completed. If not, people will wait for you to do all the cleanups, hedge trimming, mulch, color, then drop you for someone cheaper who can just mow here and there since you've already done everything else. Hope this helps! Feel free to ask any questions
     
    tareece likes this.

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