Painful lesson

Discussion in 'Lawn Mowing' started by cutntrim, Mar 8, 2000.

  1. cutntrim

    cutntrim LawnSite Senior Member
    Messages: 474

    I'm posting this to hopefully save some of you from suffering a blow to your business similar to what my partner and I were hit with yesterday. <p>We &quot;had&quot; a contract for 58 commercial properties scattered over a wide area and owned by a single company. We dedicated a great amount of resource, equipment, and time (blood,sweat,tears) to providing a quality service for this customer. We've gone through four different property managers in 8 years. Property manager number two cancelled all of our services and gave the contract to a friend - we know this for a fact. A couple years later he was out of a job and the new manager re-looked at our quotes and hired us back. When he left and the third guy came onboard he ditched us to go with a lowball company that ended up bailing out on him in the middle of a very wet spring. He dug up our prices and we were re-hired again. Now he's gone, and another new guy is in...we're out. &quot;Significantly lower prices&quot; is the reason we've been cancelled.<br>The point I am making is to be wary of putting too many eggs into one basket. We knew of the possible consequences but it's very tempting to discount individual prices in order to secure the overall sum of properties. Unfortunately this plays into the hands of a property manager who can play off each lawn company against one another until he gets rock bottom prices. <p>We've learned the hard way, stay away from contracts where quality means nothing and price is the ONLY bottom line. We built our company on quality, residential lawn care and we'll continue to consider that our bread and butter. Our aim will be to expand our commercial base one property at a time. <p>Consider the consequences of assuming a giant contract under the control of one person, long and hard before you commit your company. <p>We are going to have to let go of some valuable employees because of this and as many of you know, good help is extremely hard to find.<p>----------<br>Dave in S.Ontario<br>
  2. thelawnguy

    thelawnguy LawnSite Silver Member
    Messages: 2,411

    I wouldnt give up just yet. If you havent alredy done so, pop in for a face-to-face meeting with the mgr and lay it out just like you did here. Maybe you can salvage at least some of the accounts. Seems you have all to gain and nothing to lose at this stage of the game.<p>Maybe you can adjust the pricing, make up for it by giving em what they want, just brown-paper the name on the truck while your there.<p>Bill
  3. turfquip

    turfquip LawnSite Senior Member
    Messages: 860

    <br>Excellent post cutntrim.<p>This circumstance(and it happens in EVERY market) cries out for more collaboration among respectable companies, more professionalism, cooperation, etc.
  4. cutntrim

    cutntrim LawnSite Senior Member
    Messages: 474

    Lawnguy,<p>I sent him a carefully worded e-mail (he cancelled us via e-mail) in response late last night. Asked him to contact me on my cell phone (it'll be on all day). We're hoping to retain some of the properties (those closest to us) and if he cold-shoulders us I plan on going over his you say, nothing to lose. However, his day will come when he's replaced by yet another property manager and the contract will again be up for renewal. Next time we won't bid on the whole enchilada...just the nearby properties. <p>Another point I forgot to mention - demand multi-year contracts whenever possible. Once you have &quot;proven&quot; yourself after your first season ask for a 3 year contract the next season. This company is one of the few that actually seems to solicit new prices each and every season. We plow snow for them too, and they won't sign an annual contract for both services. Bad stuff.<p>----------<br>Dave in S.Ontario<br>
  5. nlminc

    nlminc LawnSite Bronze Member
    from GA
    Messages: 1,671

    Dave, Try and meet one on one with this manager and give it a shot. The same thing happened to me this past year with a condominium. I was told all season that I would get the contract back because we made the place look beautiful while the other condo's were not having trouble with drought, poor workmanship and so on. Then comes Dec. and this lowballer in town takes away 8 condos. One was mine. I decided to pay a little visit to the manager who decided on the contract and due to a little intimiding demeanor, he signs the contract back to me. The funny thing about it was, I just wanted to make him tell me face to face why I was bounced from the job,I never thought he would rollover so easy. Like most people, they hate confrontation. If that job means much to you, you owe it to yourself and those valuable employees to stand up to this guy. Most of these management companies just think you will move on and forget about it. I mainly focus my business in high end and middle class residential just for that reason. <br>Good luck,<br>Chris
  6. Stonehenge

    Stonehenge LawnSite Bronze Member
    from Midwest
    Messages: 1,276

    cutntrim<p>Sounds like a very painful lesson. Thanks for posting the experience here - gives me pause to consider that kind of issue myself, and how to insulate my company.<p>Thanks
  7. GrassMaster

    GrassMaster Senior Member
    Messages: 447

    Hello cutntrim:<p>Sorry to hear about your misfortune. I know it's no help but it's called being self employed.<p>I had this happen to me several times. I had a contract with a apartment complex one time for over a year very lot of grass no problem But bushes & edging was killer. We had it under control & no problem.<p>New manager let son in law do it for $5 dollars a month less. I was getting $2000 a month. He started in spring with 12.5 MTD 38&quot; cut mower, Ryobi trimmer & hand held blower. He did nothing but cut for 3 months, LOL he didn't even have trailer.<p>I got it back for $2200 a month & a $1500 clean up fee. She came up to me (they were almost 3 months behind) I told her I was going to stop services & take legal action. <p>She laughed & asked me to put down about 1400 bales of pine straw I think. Then she would pay me, I told her to pay for 3 months & then I put down straw ( $4.50 ) bale installed.<p>She let me go on spot, I found out who her boss was. Contacted them & told them what happened. She lost her job, they came in person checked my work then gave her the shaft.<p>People in this business can say what they want, but I take residential any day of the week over commercial. <p>Residential customers will give you loyalty. That's what keeps us in business!<p><p>----------<br>GrassMaster - Home:<br>My Start Up Page
  8. Nilsson Associates

    Nilsson Associates LawnSite Member
    Messages: 243

    As I mentioned in an earlier post, my business was 100% commercial and contracts ran for three years ... nevertheless, each year I would bid an additional $300,000 give or take to &quot;protect&quot; from this situation. <p>With commercial you can never &quot;rest&quot; thinking that the work will always be there for you. I used to get cancel calls ... but because I had a stack of offers always on the table ... I'd simply say ... &quot;You're going to cancel, going with somebody else for a lower price ... NO PROBLEM&quot; and slam the phone down in their ears ... <p>Commercial accounts can put you out of business if you let them ... cancel them with better work contracts BEFORE they cancel you is part of the commercial game.<br>Nothing personal about it.<p>Phil Nilsson<p>P.S. forgot to mention that we were never &quot;fired&quot; for poor workmanship ... it was always that somebody else had a lower price ... and that &quot;lower price&quot; was offered to us to continue ... but I simply say &quot;no thank you&quot; and go onto plan b. A few years later, we'd be back again after the place for left to shambles because the other guy cut corners, couldn't hack it.<br>
  9. Charles

    Charles Moderator Staff Member
    Messages: 10,781

    Low ballers, friends of the owner/manager and relatives of the owner/manager really can knock you out of a job no matter the quality of your work. Low ballers don't think about the long term of this business. Their idea is to go in low and go up on them every year or so. But what happens is they go up for a few years and then someone comes in and lowballs them. The process starts all over again and holds the lawn service business prices back in the 1950s. No matter what quality of work you do or how friendly u and the owners are. Their is that temptation to go with someone who has cut your price in half. Or a relative who has just bought a mower and wants to pay for it. Some tight wads will dump u over 5$$$. Even though our cost have gone way up. The owner/ managers can keep what they think they should be. Instead of what we have to have it to make a living. All because they know that some new guy will come along and shred your price.
  10. Nilsson Associates

    Nilsson Associates LawnSite Member
    Messages: 243

    For all of the above reasons ... new people to the bizz should be made aware of where the prices &quot;should be&quot; ... but if they were .. would they pay any attention to them?<br>I mean you know, if there were &quot;standards&quot;?<br>or continue to price low to &quot;grab some work&quot;?<br>

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