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Discussion Starter · #1 ·
Since the begining of the season I have been servicing a large service station, 1 1/2 acre of lawn, of that a 1/2 acre is a rough field with tank traps requiring a trimmer to cut, 3000 linear feet of trimming, 2500 sq ft of beds narrow but long, and to top off the property a bpm for drainage. To service this location requires 6 total manhours each visit to service, the property was on a 10 day service cycle, I have been charging $160.00 a service visit.
Last week the owner called informing me that he has given the property to another company, later I stopped at the station and had a long discussion with him, during which time he told me that the new company will be servicing the station for $160.00 a MONTH , $1920.00 a year. With weekly visits during the growing season, which comes out to about 35 visits a year. That is about $55.00 a visit. Now I haven't been in this business as long as some of you, but for the life of me I can't see where the other company can even pay wages at $55.00 a visit. Even if there are numerous add ons over the year, I can't figure where or how the expenses of the service visits could be re-couped. Does anyone have any thoughts or ideas on this situation. Thanks.
 

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I wouldn't worry about it. The new guy will probably realize he is losing money on the contract, or will do a substandard job to make up for the loss of money. Plus at $160 for 6 hours you were only making $26/hr any way. Wait until they call you back when the new guy backs out and raise your hourly rate.
 

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and, as grasshopper said, at $26/hour you were low anyway. Way low in my opinion.

Think about it, if you were at $26/hour every day for 8 hours, or $208 per day, also known as $1048/week, or $35,000 or so per year in a 35 -week season, would that cover your costs and pay you a living? NO!!!

You'd be better with a $20,000 year modest job that offers some type of benefits.

KB
 

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Lossing a big account sucks............sorry for you.

I just might be a blessing.

They may call you back..........so you go back with a modest increase cause your know your going to have do more work doing and correcting what the scrub messed up.


Or you take on work that is more profitable for you. Now you can.....;)
 

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Gotta agree with A. Lawn that was not a huge account. Two years ago I lost an account that i had been doing for four years. The account was for over $70,000 a yr. The customer was not displeased with my service I simply got underbid by $15,000. I was like you and have no idea how they could come out undercutting like this. They lasted about 2 months. Think they have been through 3 more companies since then.
 

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"Huge account" is relative to what his other accounts are. That is a sizable account to lose. Sorry to hear about your lose.
Last year I lost an account that was about $56,000 gross. It was my only account. I was doing 7 apartment comlexes for one company. I lost it in august too. I was ready to quit, sell everything. They also cheated me out of about 2800 dollars in the end.
But I just had to buck up and struggle through this year. I have a different plan of attack now.
Good luck and if they call you back to do the account, I would raise the price considerably.
 

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I'm sorry to hear of your loss. Some companies either don't know that they'll lose money on it, or plan to get the contract no matter what and make up for it later. Like others say, if and when they call you back, raise your price. Also, was there anything you could've done to be more efficient to cut down on your costs? Just curious. Good luck.
 

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Discussion Starter · #9 ·
TurfTex Guy. the property had a layout which restricted the use of my 50 inch WB. which was used on the open areas, a 36 WB was used near the long narrow beds, I try eliminate time whenever I find a quicker acceptable way of servicing a property. As someone said "huge account is relative" but losing $500.00 to me a month is a bite, but being in this business we just move on looking for a replacement property.
 

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Sorry to here they did you like that. In the 20 or so years i been in the Lawn Care i have lost very large and small accounts. it hurts your pocket book and your pride. I also must say i have dropped large accounts too. This is what i tell any one thats drops me than 2 month later call be back. I will return only and i mean only if your sign a 10 year contract with a 5% increass per year. I have 3 that has done this.
 

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Originally posted by hubb
"Huge account" is relative to what his other accounts are. That is a sizable account to lose. Sorry to hear about your lose.
Last year I lost an account that was about $56,000 gross. It was my only account.
Like owning stocks, don't put all you eggs in one basket. The more accounts you have for your gross income, the less it hurts if you lose one, since each one is a smaller percentage of your income.
Pete
 

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Hubb...thats a big nut to lose.

My there is...get as many small eggs into many small baskets.
And never have a large account paying my paycheck. If I were lose a really big account it would just affect the crew doing it and my bonus at the end of the year.
 

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Glan,
Yeah I'm doing better this year although I don't have the accounts that I thought I would have. I wasn't very aggresive this spring in getting contracts because I had a "bad taste" in my mouth so to speak from last year. Its going to be a struggle this winter but I have always been able to make money so I'll survive. Thanks for asking.
 

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I'm sorry to hear about your situation. As far as the other company goes, there's no way they are going to be able to do that property at that price.
Other than money, is there any other reason why he would have discontinued service with you? Has he ever complained about anything?
As mentioned earlier; if he decides to use your services again tack on a 3% increase and a long term contract. Since he's already demonstrated that he wants the grounds maintained weekly put him on a weekly schedule.
 

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Lets say there is an “average” ½ acre sized lot in your town, that with mowing and detailing it goes for $60, supply and demand. If you have a 60” ZTR and a 3-man crew, you might knock it out in 30 minutes, for a rate of $120/hour. A one-man outfit with a good walk-behind might take 1.5 hours, for a rate of $40/hour. But a 12 year old kid with a 21” push-mower may take 4 hours, at a rate of $15/hour. Each of those three may be tickled to death with their performance.

So depending on someone’s capabilities, they may be able to service that account for $160/month and make a profit. NOT LIKELY!!! Boost your capabilities with better equipment and you’re going to be able to make a lot more money by increasing your rate, but not by increasing prices. Prices are after all, based on supply and demand.

Obviously that $160/month is ludicrous. But then again, I think $160/mow for 6 man-hours is ridiculously low as well. As stated, the rate depends on your setup. Look at all your accounts and determine your average rate and don't settle for less.

Your customer either thinks you’ve been ripping him off, or he knows it’s a ridiculous price and is willing to take advantage of that $160/month guy. Either way, it was not a good account. I’d let it go and use it as a learning tool. But DO NOT lower your prices based on this one occurrence. If anything, you should raise your prices and look for better accounts. Ones that appreciate your service (with cash) and thereby motivating you to give them you’re best.

We compete against kids, college kids, convicts, illegal immigrants, as well as each other. That new guy can’t be a legit LCO. If some fool wants to tie themselves down to a 6 man-hour project for less than $10 an hour, by all means let them! Bud, that’s a good thing to have your competition killing themselves for nothing. Find something profitable and laugh all the way to the bank.
 

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Originally posted by McNeal Lawn
I can't figure where or how the expenses of the service visits could be re-couped.
I'd just bet the people at the gas station will have trouble putting their finger on the actual expenses too.
I just suspect they've signed one of those "baffel them with BS" contracts. They'll never realize where the money went.

You're probably not getting a clear picture of the actual expense built into the contract and neither will the people at the station. Until it's too late.

But if they're the kind of jerks that would yank a job out from under you mid-season, then they deserve what they're going to get.
FIRED YOU OVER THE PHONE!!! Boy I'd be fuming! :angry:
You should have at least been able to present a counter offer.

There are customers out there LOOKING for an honest man to do an honest days work. You're better off without them. Though I know it's hard to take right now.

Better luck to you in the future.

Dave
 

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Discussion Starter · #18 ·
Thanks for all of the comments and advise, each of your suggestions will be a benifit to my operation, thanks.
The company that has the site now is one of the larger companies in the area, I would guess he has at least 6 crews working, I did see some of thier workers applying roundup, they had a van and no lawn equipment, it seems they do the spraying after the maintenace crew finishes.
Bluesteel your comments cleared up many questions that were on my mind, on how they might be able to service at that price, thanks.
The only complaint I recieved was that weeds were growing in cracks of the drive, with the rain we have had I dont think anyone could keep up on them on a 10 day cycle. We would wack them down and apply roundup for control. I will definitely learn from this, thanks again.
 

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dvmcmrhp52,
I can say it was partially my fault and the rest just came down to pure lowballing.
The part that was my fault was that I had a release clause in my contract. It stated that if the client wanted to release the contracts they had 30 days from written notification to do so. I will never put that in a contract again.
The other part boiled down to, out of the 3 managers for the complexes one was a real b-tch. She had asked for a few extras and I done some for free. (Trimmed a few low limbs and weed wacked a ditch that was actually common ground) no big deal right. Then she asked me to take care of the dandilion problem she was having. When I told her that I would have to sub it out because at the time I didn't have my app liscense, and how much it would probably cost, she had a fit. After that she wouldn't even talk to me. About a week later I recieved a letter saying that I had thirty days to end my accounts with them. It hurt but it was no real big deal, except they were already behind on thier payments and they just flat refused to pay me no matter what I threatened them with. At that time they were into me for about $12,000. The rest is history as they say. I finally got paid about 0.70 cents on the dollar which is what my lawyer said would be about the best he could probably get out of them realisticly. So that about it.
I learned alot from that little screwin'
Its like LGF's sig line said for a while, "Failure is part of sucess" or something like that.
 

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Thanks hubb,
As I thought.
Part of the reason I am personally not enthralled about commercials is because of the competetive nature of it and the politics involved with many of them.
Good luck and chin up cause you will move beyond it and prosper.
 
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