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Residential vs Commercial accounts

Discussion in 'Starting a Lawn Care Business' started by spitfire3416, Sep 27, 2012.

  1. spitfire3416

    spitfire3416 LawnSite Senior Member
    Messages: 553

    Do you prefer a larger quantity of one over the other, if so, why?

    I hear people say commercial accounts don't pay as well, but the only 5 I have pay me 5-10 dollars more than my residential customers that are the same sizes.

    I feel I get more work out of residential customers though. Probably more loyal too.
  2. 93Chevy

    93Chevy LawnSite Fanatic
    Messages: 40,036

    Depends on your area and customer base. I work for a company that's 100% commercial. Very loyal customer base, good paying accounts. I mean, yeah, we're afraid of losing a PITA account next year, but it happens. And some places are cheap, but if they were so cheap, then we wouldn't have bid them in the first place.

    You might run into problems with fast food joints, mom and pop stores, and little stuff like that. You might make a killing off HOA complexes and retirement communities like we do because you're equipped to do so and the property manager is willing to pay your company $25k more per year than Brickman.

    You might not be able to handle the high-paying loyal commercial customers yet. Maybe residential is better for you. Sounds like you like resi accounts better, so maybe you'd better stick that route for a while.
  3. 32vld

    32vld LawnSite Gold Member
    Messages: 3,983

    People claim that back in the day commercial had higher profit margins.
    Now many find competition for commercial work has taken most of the profit out of commercial. Making residential more profitable for them.

    So depending on you area one may be better then the other.

    This year I got my first commercial by recommendation for snow removal that became lawn care. For me it's the same profit wise.
  4. 93Chevy

    93Chevy LawnSite Fanatic
    Messages: 40,036

    Snow is one thing I forgot to mention about commercials. You might make some money doing snow for residentials, but if you bid right, you can make a killing on show with retail stores. They're willing to pay because they don't want to get sued if somebody slips.

    Obviously it's different in different areas, but around here...Walmarts want black pavement 24/7 and they're willing to pay for it. We got a Walmart contract in the middle of last winter because the previous LCO couldn't handle it.
  5. 32vld

    32vld LawnSite Gold Member
    Messages: 3,983

    I heard that the box stores use middle men management companies to out source the work at low ball wages.
  6. 93Chevy

    93Chevy LawnSite Fanatic
    Messages: 40,036

    Yeah, but if you're set up right, you can make a killing even with low margins.
  7. LandFakers

    LandFakers LawnSite Fanatic
    from CT
    Messages: 6,309

    I have one Commercial account that is almost exactly the same SQft as a Resi I have. The Commercial is $25 a week more, they never tell me not to come, and if any other services are needed(tree work, stone) I am the first guy who is asked if I would like to do it. The only downside is if you dont plan it right, you can be mowing while the place is full of cars and people, but thats the only thing I dont like about them.
  8. spitfire3416

    spitfire3416 LawnSite Senior Member
    Messages: 553

    I'm in my second year now and I was thinking about going out and getting some commercial snow plow accounts, but I always hear people saying that it's not always worth it because of the insurance costs and that more often than not somebody always ends of slipping and sueing. Not sure how true that all is but you seem like you guys do pretty well with it so IDK.

    Would it be worth it to just have one big snow plow account like a Walmart to start out or stick with smaller commercial and resi accounts you think?
  9. spitfire3416

    spitfire3416 LawnSite Senior Member
    Messages: 553

    yea my father use to own a landscaping business and he said the same thing. which is actually what made me start the thread. he said he use to have one account that would take him 4 hrs by himself and would get $600 for it. He ended up losing it after 8 years to someone who could do it for $250. Another one he lost he use to get $200 and it took him 2 hrs. Lost it to someone for $50 haha unbelievable. I still have yet to encounter this with any of my commercials but, then again, I've only been at it for 2 years.
  10. cpllawncare

    cpllawncare LawnSite Silver Member
    Messages: 2,659

    I'd have to agree at least around here competition has taken all the margin out of commercial work, all they want is the lowest price even if it means you lose money.

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