year around accounts

Discussion in 'Lawn Mowing' started by sonny steele, Oct 3, 2005.

  1. sonny steele

    sonny steele LawnSite Member
    Messages: 11

    how do you talk your customers into yearly service I live in northwest florida and most of my customers are ready to go from weekly cutting to bi-weekly then to nothing at all ? I have some yearly customers but I need more any ideas?
  2. brucec32

    brucec32 LawnSite Platinum Member
    Messages: 4,403

    Good question. I don't do it myself. I had the same concerns...why would people go for it? But some have good success doing it. I think it comes down to whether you want to be a salesman/businessman or just do the work. My thinking is that I got into this to AVOID the hassles of having to make a lot of sales calls to keep busy, deal with cancellations and new customers, etc.

    In years past I stayed pretty busy year round anyway, so in effect I was getting paid year round. But to do that I did most heavy shrub and light tree pruning, mulching, gutters, leaf cleanups from beds, etc in the off-season. Anything that could wait till winter waited. My idea was that I got paid the same but didn't have to pressure anyone to do it. Now I prefer the time off in Winter to spend at the beach where we have another home. I make less, though, obviously.

    Year round contracts are a better idea for guys with employees, since it helps cash flow and budgeting to keep a crew on year round. But I see a lot of "make work" visits that I personally wouldn't be comfortable with. Plus a solo or small operator needs time off to avoid burnout physically. If you're under pressure to squeeze every dollar out of the biz, you may prefer year round contracts. But I need the time off mentally and physically, and need and use the free time to make money in other pursuits. If I was busy showing up to blow off driveways in February I wouldn't have that time. btw, I think we should all try to diversify into some other income sources anyway. It's a safe hedge against injury or setbacks. I made more in Real Estate in the last 2 years than in about 5 years of doing this.

    A lot of guys will get a year round account by basically averaging the cost of the seasonal work they do and just making the payments equal. It's more of an accounting game than true year round work. It's a good idea, but you do run into the problems of cancellations after you've done more work than you've been paid for. Even with contracts, that will happen. I knew a guy who was able to get year rounds and then basically perform almost no real work over winter. He was always losing accounts when customers wised up an went with guys who just charged for the work they actually did and gave them a break in the winter. He would crow about getting his year round money, but he eventually went out of business.

    My hunch is that if you added up the amount of time some spend selling to get their year round accounts and signed contracts, you'd have a huge chunk of time that they're not factoring in to how profitable they really are on a per-hour basis. It's a matter of temperament. If you like selling, go for it. I prefer selling for one month in the spring, then not even thinking about it for another year.
  3. JimLewis

    JimLewis LawnSite Fanatic
    Messages: 6,876

    There is a simple solution to this problem. And it comes down to understanding how most people think. For years, I have used methods like what I am about to describe, VERY successfully.

    Here's the deal. You want to dictate how your business is run, right? But the customer doesn't. THEY want to be the ones in charge. They want to call the shots. They want to feel like they have control or at least like they have options. So, no problem. You give them options. But if you are smart about it, your options favor a certain response that YOU want. In other words, you are steering the client into choosing the option that YOU want them to chose. The result is that they still feel like they are in control, but YOU win. Let me explain....

    So first you have to understand that for whatever the service, if given a few options, most people will always chose the less expensive option. You could pay off that new car in 3 years with a $480 payment. But if you want a 5 year loan, the payment is only $335. Which option do most people chose? The second!!! Even though it almost always costs them more in the long run. That's just the way people think. Lower payments PER MONTH, is all that most people care about. So use that to your advantage.

    For instance, you want them to be a year-round customer? No problem. Offer them two different deals. Your "seasonal" package consists of mowing every month for 7 months, every 2 weeks for 2 months of the year, and then you take 3 months off. That package costs them $150 per month, let's say. You also offer a "Year-Round" package where you mow every week for 7 months, every 2 weeks for 3 months, and once a month for 3 months. Also, in those 3 winter months you agree to do some other services (e.g. pruning, clean-up, whatever...) But this package is significantly lower per month at $135 per month.

    9 times out of 10, people will chose the second option. And so 9/10 of your customers from now on will be year-round customers - by their own choice.

    That's how it works, my friend. Trust me, I have over 160 year-round customers currently. And that's in Portland, Oregon!!! So if I can sell year-round up here, where it's hella cold and rainy in the winter, I KNOW you can sell it down in sunny FL.
  4. Frontier-Lawn

    Frontier-Lawn LawnSite Silver Member
    Messages: 2,956

    Here's how i work mine.
    I use Annual Agreements. They pay per visit not mow.
    heres what it says in my agreement:
    Mowing is once per week during the season & Bi-weekly mowing or Weekly as needed, November- January. Weekly visits will continue for edging and trimming between November- January. The number of cuts will be no less than 46 throughout the contract length.
    This service will include: Mowing, trimming, edging, and blowing off concreted areas.
    Other services will be priced separately outside this Agreement.
    heres the payment part:
    52weekly payments of $________ Billed Monthly for a total of $__________ are to be paid to FLL for the above services. Billed as per visit. Pre pay gets a 5% discount
    * At Contract Signing we Require one months payment before work is to begin*
    hope this helps you
  5. Fantasy Lawns

    Fantasy Lawns LawnSite Bronze Member
    Messages: 1,912

    Great post Jim ......

    I give this too most 1st time bids .... based on our area of 42 visits per year:

    Monthly Billing Structure:

    General Cash Flow is a concern for the immediate and long-term health of any business. A true understanding of the yearlong commitment with month payment breaks down to 42 visits per year. What we wish to do is spread the cost of “per visit” through out the year so in the wintertime we have steady cash flow.

    An Example:
    Ms. Ann has a mid size home in Merritt Island and wishes to have lawn service; she has received a bid for $ 85 per month. This breaks down to $25 per cut ($25 x 42/12 = $85). This means in the Summer Months when she will receive 4 cuts yet only pay $85 not $100 and in the Winter Months she may only receive 2 services yet still pay $85. We must keep in mind that there will be 3 Summer Months when she will receive 5 cuts and 2 Winter Months when she will receive 3. November thru March she will receive bi-weekly service and April thru October she will receive weekly service, yet what she is truly paying for is 42 visits per year.

    Another Example:
    Mr. & Mrs. Smith has a larger lawn as well as more edging & weed eating areas; they also wish to have hedging performed 4 times è spring, twice-in summer than a fall trim. They have received a bid for $ 105 per month (which is $30 per cut) just for the lawn. The hedging would be $40 per event or $160 per year when added with lawn service the monthly cost would be $120 (we round numbers up to make billing & payment easier)

    These are only examples but it breaks down the bidding process. Using our hourly rate in relation too the estimated time needed to perform a task or job than multiple these by 42 and divide by 12, which gives what we will bid the monthly price at.

    We can include services such as Hedging or Spraying of Weed Killer with monthly billing or bill separate when performed. We always bill extras such as spring clean up hard trimming of hedges, crepe myrtles, ornamental grasses, mulch, flowers or palm trimming when they occur.


    This means say I started June 1st but they cancel Nov 1st ....5 Months @$85 per month is total of $425 .... but in this time frame they recieved 22 cuts @$25 is $550 so they would recieve a final bill of $125

    I DON"T DO Renters .... they must pre-pay ....n it's on per cut rate

    Here's another idea ...kinda along Jim's method

    Too get some cash in early ... say you have a monthly bid of $100 per month .... tell em it's $100 payment recieved by the 20th or $110 by the 25th or $120 by the end of month .... an there is a $5 late fee .... with suspended service if not recieved by the 1st of following month
  6. sonpro72

    sonpro72 LawnSite Member
    Messages: 4

    I use a 42 visit calender also. What about just billing on a per cut program, this way we are getting all are money for the work we perform. I lose 6 -10 percent of my monthly accounts in November every year. Although none of my bed maintenance customers leave, I believe they see the value. Part of me wants per cut pricing only but will I have a hard time selling it. Any thoughts.

  7. topsites

    topsites LawnSite Fanatic
    Messages: 21,652

    Just do a good job.

    Speaking for myself it almost seems of late I've been reading a lot of stuff here
    that I would hardly classify as amusing, but that there, THAT's funny!
    Last edited: Dec 8, 2009

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