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payment plan letter

Discussion in 'Starting a Lawn Care Business' started by J & M Lawn Care, Dec 21, 2011.

  1. J & M Lawn Care

    J & M Lawn Care LawnSite Member
    Messages: 90

    I’m looking for a monthly payment plan letter.

    I know this probaly has been asked alot but i couldnt find it no where.

    The lawn care customer would pay a lower amount per month for services across a 12 month period instead of per cut. This could diffently help for continous cash flow in the winter months. A letter that has the clauses and all in it as well

    If there is anyone that could email a copy and i could just edit to my standards.
  2. Dr.NewEarth

    Dr.NewEarth LawnSite Bronze Member
    Messages: 1,476

    I would not give a discount. You work very hard, don't work for free! Customers will take advantage of you. You give an equal payment plant for "convenience only"

    Figure out exactly what the clients costs are and divide it by 12. Don't give them deals.

    Also, giving deals makes you look like a lowballer to some people.

    Have the client sign a contract and give you 12 post dated cheques.

    The contract is your protection if you ever have to take legal action.

    In the contract state "This being a green contract, some months require more labour and supplies than others. Thirty days written notice is required by either party if services are terminated early. Final payment in the event of termination of this contract by either party, will include the minimum monthly payments plus any additional costs incured by (your company), its subcontractors and suppliers in the normal operating and furnishing of this contract.
    All payments are due in full at the (beginning?) of the month. The Nsf charge is $(?) per occurance. Late fees of $(? percent a month) apply to all over-due accounts. Grossly overdue accounts will be subject to a property lien or legal action"

    So, I would get the payment up front with a signed contract that also says exactly what you will and will not do. (ie:We are not responsible for watering or sprinkler system upkeep or repairs.) We will cut and trim the lawns. Hard surfaces will be blown clean. Gardens weeded (?) every two weeks March through November. In the winter we will attend the property once a week for a site inspection and clean up blown down sticks and may do a basic clean-up with a back pack blower (for example) and (this contract does not include the clean-up of snow or ice)The clean up of large branches and trees is contingent.
    Any other work not listed in this contract package is contingent. It is due when completed and is seperate from this contract. Late fees, nsf charges and other payment requirements are as noted above."

    Note: large contingent jobs may require a deposit with regular draws until completed. A seperate contract is required.

    So, this is basically what I use. It is from what a lawyer here approved for our contracts.
    I also used a two book set co-written by EDWARD HORSEY and two other people.
    There is a U.S. version and a Canadian version written by Horsey, Susan Murray and Bruce Hunter.

    Use the information. Rewrite it for yourselves. Others will add to it I'm sure.

    Just cover all of the bases , get them to sign a contract, get post dated checks because that is going to save you alot of headaches every month, get them to pay for the beginning of the month before you do the work-that will save more headaches...
    Good luck.
    Last edited: Dec 21, 2011
  3. J & M Lawn Care

    J & M Lawn Care LawnSite Member
    Messages: 90

    Thanks for the info..

    This will be very helpful. We dont do any deals with the clients:). The deals will slowly run lawn care operaters out of business. We have a set minimum we cant go under. Now, if the homewoners try to get us under that, we tell them we cant do it.
  4. USA Lawn Care

    USA Lawn Care LawnSite Member
    Messages: 62

    Personally, I would not spread the payments out over 12 months. That's just me. Now....I am not putting you down for wanting to do that.....I just think you would be better served collecting 'as you go....or 'as you mow', figuring out your budget for the winter months and put that money aside.
    If you don't think you are capable of doing that, get with someone to help manage your money so they automatically put it aside and you have support. You need to get as much money on hand as possible and spreading it out over time is not in hand.
    Some people are 'savers' and some people need help with it. Another thing you could do is to have an automatic transfer every month or every week into another account. This way, it's not up to you to remember to save the cash or to make the decision that week. Once it starts to add up, and you don't tap the account, it's easier to keep in there.
    Best of luck and at least you're looking at trying to take care of your winter months.
  5. DQL10

    DQL10 LawnSite Senior Member
    Messages: 292

    I would like to know more about how to do this. I feel that this is a very tricky thing to do. How do you convince the customer that this is the best way to go vs. pay as you do service? We all need income in the winter and this is the best way to keep some sort of cash flow if your area doesnt get snow. This type of payment plan seems to be easier to implement for commercial properties and HOA's but might be harder for those residental customers?

    For example, you stated that the customer must give 30 days notice of a cancelation in contract. So what is stopping them from saying around November to cancel their contract? At that point you just lost a customer for the year and that monthly payment of say $300 that you had budgeted for for the remainder of the winter season?

    Ive been trying to work this into my contracts for months now and just cant seem to find a way.
  6. Dr.NewEarth

    Dr.NewEarth LawnSite Bronze Member
    Messages: 1,476

    A payment plan with post dated cheques or a credit card approval will save the client time and the landscape company money.

    If some-one quits part way through the contract, then you collect what they owe.

    If they have already given you post dated payments, then pro-rate what they owe and send them the rest of the cheques and any money owing by registered mail.

    Having a contract signed prevents alot of problems. On the other hand, we cannot avoid the occassional bad client or problem job. Just be prepared and look after yourself first....
  7. PK Mows

    PK Mows LawnSite Member
    Messages: 88

    If you're going to have a 12 month account then you need to build value into each month. My typical 12 month account would have Spring mulching and Fall leaf removals/weekly clean-ups, as well as any other maintenance item I can think of. Like irrigation repair/maintenance, landscape lighting maintenance, fence repairs, seasonal colors, etc. Maybe you can also contract out Chemical Lawncare, pool maintenance and other items. You want to provide value during those months when you're not cutting. Just selling on price alone is a quick way for most of us to go out of business. Show the Customer that your services are needed twelve months. Most upscale property owners are interested in having their properties in top condition year-round, let them know that with you, that's what they'll get. Be on that property every week and let them see that without you, that property is going to go downhill quickly. If you're pricing it properly, even if they canceled in the middle of the contract, you'll still be making money. Because things happen, people are transferred or take new jobs elsewhere, they die, they go broke, they join cults and move to Carlsbad, you never know.

    Also, know your market. Not everybody is looking for an intensive property management schedule. If it's a weekly mow and blow yard and all the Customer cares about is that their dog doesn't lost when they let them out, that's probably not the Customer you want to be selling 12 months to.

    Personally I wouldn't look for a one-size-fits all contract, and editing one yourself is just going to cause you trouble if it ever has to be enforced. It's a good idea to have a relationship with a good, local Attorney who is familiar with local and State Laws and have them draft your contracts. It will cost a few hundred dollars, but that's less than the cost of one default. You should also meet with your Attorney at least once a year and have them review and update your contracts, bad check procedures, Employee Handbooks, whatever. It's going to cost you a few hours of billable time, but again, it's really just cheap insurance. Many Attorney's Offices will also do bad debt collection for you, they just charge a percentage or they charge the debtor when collected.

    Personally I'm not keen on holding checks but that's just me. I am very keen on having automatic payments though. I intend to have some sort of auto payment set up myself by the start of cutting season. Keep in mind that there's always a risk with the 12 month agreements, but if you can build value in your service, and price it properly, you'll make money on them.
  8. phillie

    phillie LawnSite Senior Member
    Messages: 861

    I know this thread is a few months old but still. I offer a prepay option and it works great. I don't have to unnecessarily hold checks. I offer a 7% discount for people that want to prepay. It gives me cash flow at the beginning of the year to market with and gain more work. As a matter of fact most customers that prepay are the happiest customers. Just send them a personal letter letting them know you you are now accepting them and to call you to set up payment.
  9. H & M Yard Improvements

    H & M Yard Improvements LawnSite Member
    Messages: 214

    i tend to keep my maintenance part of the contract seperate from mulching providing that it is a major job. Meaning if i have a mulch job to do for a client, I use a seperate contract for that particular job.
  10. Wayne's Lawn Service

    Wayne's Lawn Service LawnSite Member
    Messages: 184

    Check out our Service Agreements and more CD on our web site. It has many different templates for service agreements that explain in detail what you need to have in your contract. They are completely customizable by you because they are in Microsoft Word format. Simple, accurate and professional. Put our 33 years of experience to work for you.

    Go to www.profitsareus.com and click on our products page. Call if you have any questions. You can also check out our Facebook page at www.facebook.com/profitsunlimited. There is a post from a commercial contractor in Boise, Idaho just a couple weeks ago addressing your same issue and how they solved it with our products.

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