Contracts or one cuts???

[jagmagic]

I'm just starting out, I have worked for someone else in the biz for several years and I was just wondering how flexible all of you try to be for the customers. Do you offer a lower per cut rat if they sign a yearly contract, or do you only do yearly contracts? Or I guess the best way to ask this is what % of your cust are yearly contracts?

[Stephen M.]

Don't discount your time; it is what you sell. Your overhead costs are the same for one mowing or 35 mowings. By discounting your time in a contract, you risk losing your profit margin. I think all jobs have to stand on their own and make you money individually and not be subsidized by other accounts. If you offer 35 mows @ $45 each, look at your average $/hr at the end of the year. Weather plays a big part in the high and lows of the mowing cycle; some cuts take longer, some cuts take less time. If you discount for a contract, you lose that cushion of $$ if the weather is crappier than usual. If it's better, you are lucky and count your blessings.
I equate discounting to get a signature the same as offering senior discounts.
I do neither. I want as much money coming to my company as possible and discounts would mean I take home less to live on. The reason you own a business is to live better than when you were working for somebody else.

[edrenckh]

Since I do it part-time, I just do the per-cut thing. If I cut, I get paid. If I don't cut, no charge. I try to charge enough to get $50-$60 per hour while I am mowing/trimming/etc. NOT including drive time.

It works best for me that way too. If it's way hot, the grass dries up and it sucks mowing. So I skip a week once in a while. Last year, was pretty dry. I skipped ~10 cuts total out of ~20 customers. Not 200 cuts, 10 between all of them.

If they have irrigation and use it, I go every week - even dry periods.

They more flexible you are with them, the more they are with you. That's my take anyway.

[Yard Boy]

Flexibility is important. Always remember the customer is King (or Queen) and they literally pay your bills. Sure there are going ot be challenges but that's the beauty of owning your own business. It can be as simple or complex as you want. There's nothing wrong with incentives to initiate or encourage business. Just make sure that you don't discount yourself into the red.

Billy

[MortNuke]

I'm moving towards annual contracts...

I started off with only "per cut" customers, but am beginning to encourage them to move to an annual contract. If your numbers are right, the simplicity of getting a set amount each month (including the winter, since you still have vehicles and insurances to pay) is very appealing.

I don't send bills to annual customers unless they request it, which comes with a small service fee. They just pay by the 10th, and all is good. I like to let them know via phone or email when I'm doing stuff, like fertilizer or core aerating, as a courtesy to them. Additional work is added to the monthly bill with a phone call or reminder.

To answer your discount question: I give customers the numbers straight up for the mowing, fert and core aeration (say, $148.45/month), and take 8 - 10% off to get a nice round number (say, $135/month) for their fixed payment, depending on location and degree-of-difficulty. And, all future services are 10% off (10% of what? Ahhh, Grasshopper; Good question...)

Lastly, I make it clear to them that if they have any concerns or questions, "Don't just tell your wife, don't tell your Momma...Call me!"

We all like certain ways of doing our businesses, but for me - annual contracts are the preference.

Mort