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Making my 12 month contracts more effective ?

Discussion in 'Business Operations' started by Bunton Guy, Nov 20, 2001.

  1. rixtag;

    I'm solo, so I earn all I can in the summer, credit thru the winter.

    I try to schedule core aeration etc. in the off season.

    The mowing season's relatively short here, 26 weeks. So I have to try to make it while I can.

    I just don't like those flat rate contracts for a couple of reasons.

    The first is that that customer that loved you so much in the spring when you're really busy, don't like you so much in the fall, when they're paying the same rate.

    The second reason is that you're just delaying payment on work you performed in the spring. The Kentucky bluegrass here has to be cut on a 4-5 day rotation in the spring. Then it slows down in the summer and fall. So why should I wait for my money?

    Of course this wouldn't apply if you're just using the yearly contract to be able to overcharge customers during the off season. If you can get them to stand for that OK. But normally that just opens a new set of problems.

    Overcharging customers just gives you high customer turnover. So you're going to be out of pocket for advertising, estimating and etc. The worse part would be the quality of the typical new customer. Why are they shopping for a new LCO anyway?

    But please, try what you think will work, and keep us posted. I may change over to your system if it sounds good.

  2. KerryB

    KerryB LawnSite Senior Member
    Messages: 661

    David I have to disagree with you. Its not overcharging your customers. Its spreading out payment over 12 months. All of my cust are on yearly contracts.
    I visit them 4 or more times a month during the growing season and 2 or more times during the dormant season.
    I pick up trash, blow leaves etc. but the point is I am on the property, am seen and usually get extra work from it.
    I do have one cust that is on a pay per cut deal. But I still go by to see her during the winter. I guess while I have the time to do this I will. The cust like to see me and talk. AAnd like I said I get extra work. Oh I'm glad you came by I was going to call so-n-so. lol
    Sorry this is so long lol
    But I dont see it as overcharging, I am full time and most of my cust are comm. And I am full service. If something needs doing that I cant do I try to make it happen, I buy bigger equipment, or more or hire help. Sometimes I have to sub but not often.
  3. lawndoctor, Let's not be putting words in my mouse here...lol

    I'm not saying all 12 mo. contracts are rip offs. They make a lot of sense for the reasons you explained. They'd just be a hard sell around here. I'd love to have the extended season you have.

    Maybe Bunton Guy's customer is just a displaced yankee and used to a longer "off" season.

  4. rixtag

    rixtag LawnSite Senior Member
    from Lehi Ut
    Messages: 280

    I agree,
    I too like the fat monthly paychecks, but I take a pretty big deduction in pay from Dec-April and I would like to change that.

    I am not thinking about this as overcharging, if it were overcharging anyone that bought anything on 90 days same-as-cash would be guilty.

    It gets percieved around here as getting paid for not working, simple as that. Only people who own their own business appreciate the idea. It sounds like they might be related to each other. :D

    I am pretty optomistic (sp) about the next season...it is eraly, plenty of time for stuff to change I guess.

    Again, Thanks for the good discussion gentlemen.

  5. RB

    RB LawnSite Senior Member
    Messages: 316

    I really like the 12 month idea. Currently my customers let me do what I want and I bill them on a montlhy schedule. The problem I may face is the longer winters here (Pittsburgh). We stop mowing Nov 30 and begin again on Apr 1. I work by myself and have months in Apr, May, and Jun when I make between 8 and 10K/ month. Then in Oct and Nov making 3 to 4 k. I would love to level this income out.

    Can anyone show me or help me with wording to not only get these customers on a contract, but get them on a 12 month contract. (I'm currently working on a contract "Agreement".)

    I'm going to offer a 9 month payment schedue, a prepay price, and a 12 month plan. I'm going to explain to them this agreement in person and tell them I would prefer a 12 month agreement.

    Q. What can I say that will let them know that if they quit after one or two months they owe me for the remainder of the Agreement?


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