To contract or not to contract?

Discussion in 'Lawn Mowing' started by Lee Homan, Feb 2, 2000.

  1. JimLewis

    JimLewis LawnSite Fanatic
    Messages: 6,870

    Now I don't wanna start a fight here. But I feel I should respond. <p><br>&gt;Jim Lewis,<br>&gt;If I were you I would fire your lawyer ASAP.<p>My attorney rocks. But thanks for the free advise. <p>&gt; When push comes to shove MY contracts are <br>&gt; 100% enforcable.<p>Maybe. But I'd still bet that if a customer wanted to, they could get out of it. Anyway, doesn't really matter to me whether they are enforable. Who wants to go to all the trouble? <p>&gt; If you don't pay me I file an action at<br>&gt; the county court of common pleas... SNIP...<br>&gt; I then obtain a judgement. &gt; Then I perform a writ of execution.<br>&gt; Two constables and myself pay a visit to <br>&gt; the home in the evening hours. I notify the<br>&gt; local police what I am doing when I<br>&gt; ...SNIP...<br>&gt; I then proceed to remove the customers <br>&gt; personal goods like large screen <br>&gt; tv's, computers etc. ...SNIP.....<p>Wow. I am amazed. You definitely got a system there. I can't beat that one. And I don't want to. Hey, if you enjoy spending your free time chasing down a few hundred or a thousand bucks that way, cool. Don't let me stop you. As for my free time though, I prefer Sea Doos, swimming in the pool, fishing, travel, and lots of other stuff. Life's too short for me to spend my nights chasing down some low life. It aint worth it. <p>&gt; As for writing off bad debts I have again<br>&gt; collected 100% of my recievables for the<br>&gt; third straight year.<p>That's impressive. I can't say that. Nope. I didn't get all my money last year. Quickbooks tells me I still got $650 in overdue invoices from my customers. Kinda sucks. But then, that aint bad considering that's less than .5% of our revenues last year. And hey, I had one heck of a good time last year. And I don't have a stress problem. Sure, I had to call a few people and even stop by their house a 5 or 6 times to finally get them to pay. But I never had to go to court (1 COR 6), I never had to hustle some low-life, bother the police, make threats, and I spent very little time worrying about any of it. <p>&gt; If a new customer refuses to sign a <br>&gt; contract where services are billed as when<br>&gt; they are performed you should walk away <br>&gt; ASAP.<p>Well, that's one way of looking at it. I happen to disagree, and I have over 100 regular customers who have never been on contract and it seems to work out pretty well. <p>One final note, I just don't see much of a reason to have to go after customers all that much. Maybe if I had several thousands of dollars out each year or I'd reconsider but I have a hard time trying to figure out how someone could have that many bad apples. It seems to me that when we provide a good service, most people pay us. Some people pay us late. And a few pay us very late and I have to cancel their account and bother them a little to get my money. <p>But most of them pay eventually and I have never had to raise my voice, be less than professional, threaten them, hire an attorney to help me get my money, take them to court, etc. I guess we just have different ways of doing things. <p>To the other readers, I guess you can just decide how you want to live your life. If you like lawsuits, presenting judgments, calling police, going to court, etc. go with Lawrence Stone's way of doing things. If you wanna enjoy life, don't sweat the small stuff. <p>----------<br>Jim Lewis - Lewis Landscape Services<br>
  2. JimLewis

    JimLewis LawnSite Fanatic
    Messages: 6,870

    Some more answers. Please, Jim, don't take this as me being confrontational. I think you have some very valid points. I just want to explain the other side of the story;<p>&gt; A contract is just an agreement between<br>&gt; parties put on paper. Any party<br>&gt; who wishes to get out of the contract can<br>&gt; do so. A contract is not going to<br>&gt; guarantee performance or payment. (Not my<br>&gt; ideas, my lawyer's own words.)<p>Exactly! I agree wholeheartedly. And so does my attorney. There is another valid point here as well. A contract can often have a psychological bind as well. Even while they mey not be enforcable, they can often make the customer BELIEVE that they are bound. <p>&gt; No one has mentioned the main reason for a<br>&gt; contract, or any other written<br>&gt; statement. If the client dies, how do you<br>&gt; show the executor that he<br>&gt; requested your service?<p>I've had that happen two times. One time, the wife knew me and knew our agreement. I still work for her. The second time I didn't even know the client had died. Her executor (not even a family member) called me and asked what our agreement was and wanted us to continue at that rate until the house sold. We also got a $1500 clean up job from this guy. Worked out well. But yes, there is the potential that we could have lost one month's pay. Since we charge most of our clients just over $100 a month, it wouldn't have been a big loss to me. Not worth bothering with contracts to me. Others may vary. But that is a good point. <p>&gt; If you have a sudden boom year and need to<br>&gt; outfit a whole new crew, will your banker<br>&gt; just take your word that you have<br>&gt; increased services by 50%?<p>Another good point. And would probably be valid for many people. But I pay cash for all my equipment, trucks, etc. I buy as much as I can afford and I've never taken a bank loan for my business. So again, I haven't had this concern. <p>&gt; What if something drastic happens to the<br>&gt; individual owner? Who else knows<br>&gt; what the agreement was with each client?<p>Almost all of our agreements are the same across the board. We provide the same service for almost every customer. But even if that wasn't the case, every customer is tracked in 5 ways. <p>1) in our daily notebook each customer has their own page with specifics about them and we keep a checklist of what we've done every visit for the past 3 months. <br>2) It's in my planner. Every customer has their agreement next to their name and address in my planner<br>3) It's all in my computer as well. That's where the notebook is printed from. <br>4) There are notes and records in Quickbooks that document the history and service with each client very well. <br>5) My employees know.<p>&gt; How will your survivors value the<br>&gt; client base?<p>Well, fortunately I have a lot of Life Insurance. :) But just in case, my wife knows to go to my good friend who also owns a maintenance comapany. He'd likely be the buyer and even if not would know how to value the whole thing. If I didn't have him I don't know what she'd do. I guess that's where life insurance comes in. But my survivors would figure it out one way or another. I've left a pretty well documented and organized trail. <p>&gt; If you are just disabled, and wish to sell<br>&gt; clients, it's a lot easier<br>&gt; to show value to a prospective buyer if you<br>&gt; have it on paper.<p>I agree. These are all good points. Whether the risks of these unlikely circumstances are worth the hassle of contracts is all I quesion. And for me, again, in this situation it's no. I firmly believe I could document a very good history of revenue of our company and I could sell our company to someone without having to say &quot;And look, they're all on contract!&quot; I also firmly believe I could run this company being disable too. It's big enough now that as long as I could talk and answer a phone,I could have people do the rest. <p>Nuff said here. I am tired :) Anyway, like I said above, these are all good points. But to me, they aren't worth the hassle. I get asked every day whether we do contracts or not. People are always refreshed to hear that we don't. I know I land a lot more accounts because of it. And my retention rate is still very high. It just doesn't seem like it's worth it. But to each his own I guess. <p>----------<br>Jim Lewis - Lewis Landscape Services<br>
  3. SLSNursery

    SLSNursery LawnSite Senior Member
    Messages: 442

    I agree with a lot of the points made on both sides of the discussion. In the beginning, all agreements were word of mouth. This lasted from 1980 until the early 90s. Presently only a rare few are verbal arrangements. Now we offer lawn care agreements in the spring which are signed by us and the customer. Here are a few key points:<p>1. The agreement establishes the prices and timeframe of services for the entire season. This helps avoid extra explanations at billing time. It also establishes which services the customer agrees to (i.e. Over time I have found it impossible to have all customers buy all services).<p>2. We establish our billing terms, and interest charge for delinquent accounts. Although we don't look forward to small claims court, the judge did inform my partner that with a verbal contract you may be entitled to payment but without written and signed terms, no collection costs or interest.<p>3. We offer a discount for pre-payment IN FULL before the season. The agreement is a formal way to offer the customer a discount without it sounding like a gimmick, or seeming to be short of cash in the Spring.<p>4. My experience shows that most people will acknowledge the agreement without any problems. Older customers - that I've had for 15 years don't always send it back, but they read it, and when the price goes up they are informed and the payments reflect this or at least going into the season there are no surprises.<p>5. Other trades or services - as were mentioned - usually are COD or leave a bill/work order that gets signed by a customer. This form, no matter how you slice it, is a simple contract. If you are extending terms to your lawn accounts to mow/work for a month and then invoice, I find it easier to get one time acknowledgment at the beginning of the season rather than hand or leave the customer a bill for each visit. How about Oil companies - they leave a ticket for each fill up, and usually only allow Net 10. This is a contract too!.<p>----------<br>Phil Grande - Soundview Landscape Supply -<br>Ivy League Landscaping -<br>
  4. AB Lawn Care

    AB Lawn Care LawnSite Senior Member
    from Ontario
    Messages: 585

    We like using contracts for our service but we like to have some extra non contract work in the summer.The pro's to contract are steady income,easy to collect unpaid bills,you don't have to be constantly asking your clients if they would like to have their lawn done this week,less billing,plus we get paid more on contract than off.Becouse we can not handel all of our clients during winter(snow removal)during the summer we have about 1/3 of our work on non contract.This year we are still batteling to get $1500 from a collage that has not paid up from the fall.They where not on contract so we are having a hard time getting our money.When we get clients like this we will not go on non contract basis.An other plus to going to contract work is that we very soon get to know if our client is cheap or not.Clients that are to cheap are often the ones that will dump you in a recession.With us we will keep a client like that,but as soon as we pick up a client the is willing to go on contract and price is not a concern with them then we will give our cheap client one last chance to go on contract.In most cases there is plenty of work out there so we think of our clients as an apple tree if you let suckers or branches that are not produceing much fruit grow on your tree in a short time you will have alot of apples but they will be small and worthless.By pruning those clients off the tree than you will have larger fruit and better results.<p>I hope this will help you out!!!<p>from:Adam<p>AB Lawn Care

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