Per Cut, Monthly, Yearly...What's your take on it?

Discussion in 'Lawn Mowing' started by MDLawn, Dec 3, 2012.

  1. MDLawn

    MDLawn LawnSite Bronze Member
    Messages: 1,284

    Yea most think their grass is the same as a putting green and should be mowed like one......

    Those people don't go for yearly contracts.
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  2. yardguy28

    yardguy28 LawnSite Platinum Member
    Messages: 4,463

    well in my neck of the woods your not gonna get people to sign up for paying a monthly amount whether work was performed or not. by the end of the year they'd want to receive a refund for work not performed.

    and i don't blame them. i treat clients how i would want to be treated and i personally am not willing to pay a flat amount each month no matter what work is done or not done.

    if they did 28 cuts i wanna pay for 28 cuts, if they only did 13 i'm only paying for 13.

    income down or not my point about money management is when my income is down i already have plenty of money saved up that a year being down even as much as 75%, it doesn't affect me. i don't live pay check to pay check. i personally could afford to take a year off from work total if i wanted to and i'd still be sitting pretty.

    i've managed my money very well. saved as much of it as i could before i even got into this business. i was making at least double what i make now in my previous career.

    but regardless of all that for me it still comes down to me treating my clients how i would want to be treated. and if your estimate was 12 monthly payments of x amount no matter what work was done each month, i'd tell you to take a hike. i know you guys try to justify it by "well this season you might only pay for 28 cuts but receive 34 due to excessive growth and next season you might only get 15 cuts because of a drought so it all balances out" BULLSHEOT, i'm not buying it, and i'm not doing it. so i wouldn't expect my clients to do it either.

    i charge all clients the same for all services residential or commercial. they all get invoiced for the work done each month. from pruning shrubs to snow removal and everything in between. i do the work then at the end of the month invoice for what work i did do.

    it's worked for me the entire time i've been in business so no reason for to me fix something that isn't broken.
  3. pseudosun

    pseudosun LawnSite Bronze Member
    Messages: 1,739

    I have nothing against contracts, and I know they work for some operations. I just haven't had luck with them, and i had someone else make them for me (they looked good and covered everything). I just couldn't land anything. My approach is to just talk to them on a personal level, and every customer has their own needs. As long as they have me, their yard will not get out of control. 85% regular accounts is good for me, and i do take on some older ladies that need help, because they're on assistance. I have 3 accounts that pay monthly, and everyone else is per job. 2 of the three monthly payers preferred that i text them the monthly total. I always get a check in a day or two.
  4. MOturkey

    MOturkey LawnSite Silver Member
    Messages: 2,782

    Exactly. It is amazing to me how often people try and re-invent the wheel. I'm not knocking those who work with monthly contracts, because I'm sure that in some areas of the country, especially Florida, they make sense. Here, where the normal season is around 7 months, with generally a slow period mid-summer, even in a normal rainfall year, they don't.

    I've noticed that many times posters try to equate monthly contractual billing with telephone service or insurance. That is a classic case of attempting to compare apples to oranges. I use my cell phone very little. Some months I won't have 60 minutes of usage. But, it is available to me 24-7, if I need it. Insurance is something one hopefully will never use, but will provide coverage far in excess of the actual premium.

    Virtually all service-based work is billed after the fact, and the charge is generally based on the work rendered. You don't pay your mechanice a monthly flat fee, you pay for the required repairs or maintenance.
  5. MDLawn

    MDLawn LawnSite Bronze Member
    Messages: 1,284

    You want to talk apples to oranges who would use a mechanic for 27-34 weeks straight? You're paying them for major services not weekly routine maintenance.... And if cars actually required weekly routine maintenance I'd think a lot would sign up for a simple monthly payment plan. And with a mechanic payment is due or they keep the car, not bill you 4 weeks after the work is completed.

    Also in my mind was to bill out for the actual cutting season. So if it is from April to Nov you would divide the cost between those months. I would actually offer some small discount, say 5%, to sign up for automatic payments that were paid either the 1st of the service month or the 15th. But I'd think you would need to include more things in that monthly payment than just lawn mowing. Such as once a month stuff like bed edge redefining, trimming bushes, pulling weeds, just general property maintenance that is well lined out in an agreement or contract. Basically just general good care of the property. Any big jobs are billed out seperately, just like a mechanic.

    I take care of a small office of a friend of mine and we were billing out this and that and this and that. This year I'm taking that total, adding a small percent increase, and stating that I'm doing lawn maintenace and trimming & mulching 3 times per season for $XXXX amount. He'll write the check in a day. Some people don't want to be bothered with constant bills, they just want the work done.

    Here's the catch though. Some new or not quite fully established person (possibly myself) cannot walk on scene and demand things such as straight monthly billing and such. If you do however have a good brand going I think you can do such things. If you're wanted enough, you can probably dictate such things. Until then most will probably shrug you off when it comes to things like monthly bills.
  6. hi_speedreed

    hi_speedreed LawnSite Senior Member
    Messages: 534

    exactly. nailed it.

    mechanics, plumbers, electricians, HVAC techs, doctors, dentists, optometrists, all services paid for when services are rendered.

    what if your dealer did this?

    well we billed you for $xxxx.xx this year so next year we are going to divide that number by 12 and bill you monthly whether you get service or not. Don't worry it will balance out. if you don't get that much service you'll probably get more than that the following year.

    Bet you would tell him to go fly a kite and find another dealer.
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  7. Landscape Poet

    Landscape Poet LawnSite Gold Member
    Messages: 3,638

    Again it is not a money mgmt issue that I bring up. Besides that just because you have saved well and can afford to take a year off or whatever you stated above, that is fine and dandy, but the fact would remain that income has been lost and the savings used to live on during that period has to be replaced and regained somehow - correct?

    My point is that I simply do not see how anyone can create a accurate budget with the patterns that you guys can experience. How do you effectively plan growth - when you do not know what your sales will be a month from now?
    If you were to go to the bank and ask for a loan - how would you explain that your potential income - may not be anywhere close to your estimated budget because there can be a drought at any minute?

    I am not really dogging any of you for working the way you have - I am just questioning how you make your business work and how you plan accordingly for anything because all I would see would be a very hopeful guess. Please explain how you make accurate business plans?
  8. scotts lawn care

    scotts lawn care LawnSite Senior Member
    Messages: 468

    The customer is the Boss for me.....

    I have offered both payment plans to my customers: pay a set amount each month, or pay per service performed - also at the end of each month.

    I let my CUSTOMER decide how they want to pay......not the other way around. Sure I could say I have to be paid THIS way period!

    But I believe in being flexable with my customers because there all different from one another.

    I think people will appreciate a few different options when it comes to paying - and I'm glad to work with them.
  9. MDLawn

    MDLawn LawnSite Bronze Member
    Messages: 1,284

    Probably the best route is to have options for them. Kind of what I stated above. You could pay for each service and the end of the month or pay a fixed rate with a small discount showing it could be less with the fixed plan. I'd rather have the money at the start of a month rather than at the end. Gives you something to operate with.

    Separately, people are comparing this to plumbers, mechanics, doctors, dentists which to me is still apples to oranges. NOT ONE of these above do you use weekly, not one. Yes they provide a service but not a recurring one so absolutely payment is paid on demand. Just like doing a large mulch job or patio installation and even some of those require progress payments if they are large enough. I don't see them as a true maintenance service, they are a repair/install type of service which again is not weekly maintenance item. You PLAN on mowing every week during the growing season or am I just the oddball out thinking that I NEED and/or PLAN to service weekly.
  10. yardguy28

    yardguy28 LawnSite Platinum Member
    Messages: 4,463

    the only way I'd sign up for a monthly payment plan for anything is if the amount of money I would pay in a year would equal exactly what I would pay if just invoiced for work performed.

    exactly why I don't expect my clients to sign up for something like that. to do a 12 month payment plan you have to have a grand total so you have to say you will definitly mow the grass x amount of times for the year.

    we all know you can't predict with 100% certainty how many cuts we will do. weather is what dictates that.

    no I don't make up the lost money as you say.

    I tap into what I have saved when needed and replace when I can. but I never plan on necessarly try to catch up after a lower season.

    I plan on around the same income each year. I'm a solo business I can and will only take on so much business a year. once my schedule is full it is full. if those clients happen to bring me more money than the previous year great. if not I make due with what I have.

    take this season for example. it has not been a good one. huge drought. my only plan for next season is to make sure my schedule is full just like every other season. there is no plan to expand or raise prices and try and make up what money I lost this season. currently my schedule has openings. until I can fill them with regular business I will be doing one time jobs that come my way. aside from that its business as usual.

    like I keep saying it is somewhat about money management. I know how to get by with less when needed. rarely do I ever tap into my saved money. I make it a practice to live as below my means as I possibly can. getting by with the most basic of things. anything nice I have has been given to me as a gift for a birthday or christmas.

    when money is tight there isn't going out to eat, going to the movies, renting a video game, buying new clothes, going on vacation, etc.

    when money is tight time is spent working to make money and when not working it is spent at home with whatever I already have. surely you've read my posts about how I get by with the basics and am happy with just having food, water, heat, etc. how I don't go on vacation, spend money on toys such as bikes, 4 wheelers, etc. how I don't have a fancy house or designer clothes, big screen tvs, or a huge DVD collection. I don't go bar hopping on the weekends or to restaurants to eat.

    money management. I don't need to have clients paying me all 12 months out of the year. I can take all there money in the 9 billable months and do just fine the other 3. I make plenty of money to only charge for work performed instead of trying to get them to pay 12 months out of the year no matter how much or how little of work is done.

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