Year Round Contracts

Discussion in 'Lawn Mowing' started by rixtag, Oct 2, 2000.

  1. rixtag

    rixtag LawnSite Senior Member
    from Lehi Ut
    Messages: 326

    Hello all, I hope everybody had a good weekend. I am just curious about those of you who spread 6-8 months worth of work into 12 months worth of pay?. It finally hit me that what you do is take your seasons base charges and get the customer to pay over 12 months instead of 6,7,8 or whatever. It does puzzle me how it is portrayed to the customer that you are paying the same as you would over 6 months or whatever, it is just spread over 12 months. How do you overcome the mentality that you are not working in jan, feb march etc why should I pay you? I am getting ready to rebid on some properties and could use some help.

    thanks Rick
  2. Eric ELM

    Eric ELM Husband, Father, Friend, Angel
    Messages: 4,830

    My question to this is WHY? If they pay you for example on a $9600 a year job over 12 months, you get $800 a month or if you have them pay you $1200 for 8 months, it's the same amount of money. OK, now you take that extra $400 a month you will be getting in the 8 month pay plan and put it in the bank and you will draw the interest on it instead of them drawing the interest on it. This 12 month thing just doesn't make sense to me. I feel it is telling your customer, you don't know how to manage your money, so I'll let you draw interest on this money instead of me. Am I missing something?

    In the Northern states we have year around income anyway if we plow snow, which we do, so it wouldn't be a good plan for us for a lot of reasons.
  3. 1stclasslawns

    1stclasslawns LawnSite Senior Member
    Messages: 565

    My customers asked me to put theirs on a 12 month pay plan.
    They manage who knows how much, and when they set thier budgets they asked me if I would be interested
    I have done the saving thing for years but my wife always sees the money "sitting there" and finds somthing to spend it on.
    This way she dosent see a big chunk at one time.
    Also the guy who is helping me, I want to keep, if I paid him on 8 months he would have to find a job during the winter, this way Ive got him to help me on my barn and doing some fencing for my horses.
    Yea the intrest would be great but I took that into consideration when I bid them. Jim
  4. davesgs75

    davesgs75 LawnSite Member
    Messages: 72

    the 12 month contract keeps the customer monthly payment lower, easier to afford. plus us southern guys don't have snow plowing. i love going to the mail box in jan and feb when i have not seen the yard in 2 or 3 months and there is the check.

    [Edited by davesgs75 on 10-02-2000 at 06:51 PM]
  5. rixtag

    rixtag LawnSite Senior Member
    from Lehi Ut
    Messages: 326

    I am only a part timer with this and I love to do it, I just can't do it year round without moving somwhere else. I make in 48 hours per month about half again as much as regular job, of course it fluctuates with different sevices but my regular job pays the bills and that is all. What I am trying to accomplish is to even out the income so that I can plan for the future. I have all of my equipment paid for and I am trying to get all lines of credit closed to save for a home. I make very good progress during the season but then I lose some very important progress in the off season. I would love to push snow but there are a lot of companies that are out of business because our winters are very unpredictable. Eric, as always you make some very good points. Jim you make a very good point as well.
    Anyone else have something that I am missing?
  6. Toddppm

    Toddppm LawnSite Senior Member
    from VA
    Messages: 268

    Add in all the other services to the lawn mowing like Aerating,dethatching,leaf reomval,shrub trimming,mulching, snow removal, etc....... divide that by 12. Now that's nice.
  7. mowerman90

    mowerman90 LawnSite Bronze Member
    Messages: 1,492


    The way I pitch it to my customers is like the gas company doesup north. Why pay large bills in the winter (when the furnace uses lots of gas)and tiny bills in the summer (when the furnace is off). They let you pay the average cost each month. Since I'm in Central Florida I mow weekly from Apr -Oct then Bi-weekly Nov - Mar. To figure my customers cost per month we simply agree on a cost per cutting, multiply that by the number of times it will be cut over the year, then divide by 12 to give the monthly cost of service. It makes it easier for the customer to budget, and gives you a steady income year round. On the weeks you're not mowing in the winter you can hustle up shrub timming, installations, cleanups, etc. for even more income. Everybodies happy. For those customers that don't want to go along with this system, I simply make their cost per cut higher.
  8. Evan528

    Evan528 LawnSite Silver Member
    Messages: 2,144

    after reading all your posts i still agree with eric! As long as you can manage your money theres no reason to want 12 months of payments ionstead of 8!
  9. GroundKprs

    GroundKprs LawnSite Bronze Member
    Messages: 1,969

    $100 x 12 mon = $150 x 8 mon = 1 pmt of $1200.

    Eric is right, but why not respond to the customer. I bill monthly itemized, 8 month flat rate, 12 mon flat rate (includes snow work), quarterly, and one even just once a year. These are all basically what the clients are comfortable with. Except the quarterlies - those wanted to pay year in advance, and I wasn't comfortable with that - I hate owing anybody, and I would have owed them a year of work. LOL

    From all the discussion of this in the past, it seems that different areas of the country have different attitudes toward payment terms. You just have to do what works best for you and your clients. Some people like a 12-month budget, others are pay-as-you-go. If you try to force anyone into something they are uncomfortable with, you already have an unhappy customer!

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