Contracts for Residential?

[Parker]

I have searched, but can't find a direct answer to this (at least not the first few pages of my search). Beside the obvious reasons of having a contract (may give you more leverage to get a client to pay), I want to know what the norm is for res accounts.

I am interested to know if you guys do contracts for res, or simply bill them every month for services rendered. It seems to me if you do a service contract, and offer not just mowing but "maintenance" to keep the grounds looking good even when the grass is growing slow, that you can keep cash flow up. Do the customers resent this? Do monthly flat rates cover those dry seasons when you normally wouldn't cut as much? Thanks for the info.

[MGO]

I have a Service Agreement with all of my customers.

For Residential maintenance customers I bill them monthly for the services I actually performed. i.e. The simplest form of Service is Mow, Trim, and blow......if I do that (4) times in a month that is what they get billed for.....(2) times.....then they get billed for 2-mowings. I don't break Residentials into monthly payment plans. Anything in addition to what is in their Service Agreement is a separate issue and I always provide a written QUote for additional work and have them sign it before starting.

[pride]

I have a place where the customer signs on my estimate sheet when they agree to the price, the print where they sign says (short version) I hereby authorize _________ to do the work as described for the amount shown above. I will hereby be liable to pay for the services as billed monthly. etc...
You get the point, not a contract so much as a promise to pay!!! Makes things easy, I have them and I sign and tell them I will send a copy with your first bill. Seems to work great! It probably greatly depends on your area and market.

[Elwood]

MGO is RIGHT!

[perenlawn]

We do have a contract for all our customers (res. or commercial). We have an option to select... either montly flat fee (including mowing, shrub trimming, edging, weeding and blowing)... or we have a pay by occurence option that is basic mowing, trimming and blowing each week.

We offer a 2% price break incentive to encourage the residential customers to take the flat rate monthly option. As a result we have nearly 95% of our residential customers on this plan. We find it keeps cash flow steady during the dry season and it balances out for them during the wet seasons when we have to mow consistantly.

They sign the contract regardless of their choice for legality issues and for formality. It seems to make it professional and it spells out our services in full and the expectations that the customers can have for the care we provide in addition to giving the payment terms we have. It releases us from some basic liabilities as well. Our attorney drew it up for us and we have not had one problem in nearly 4 years. It has worked well for us.

Hope this helps,
Perenlawn

[Ric]

MGO is RIGHT!

Elwood

Normally I agree with your posts. However I will disagree with you on this one. Flat monthly billing is not only easier to sell but gives both parties a fixed income or expense. These fixed money exchanges allow both parties to arrange cash flow in-depend of mother natures weather. Yes if you have a bad growing season and give less service you make out and vise-a-versa. To me a fixed income is easier to manage than a fluctuating one. Yes expense do fluctuate But with a stead income that can be easier managed.

[Seascape]

To each his own but personally id rather have my money in my bank than the client. Its never caused a problem for my cash flow as in winter,or slow growing periods. Theres always money there. Crappy checks dribbleing in during january never impressed me much.

As far as contracts,, i dont use them much on residential anymore. Not like i have to invest for an account anymore. Ive never had anyone no pay me. Had people pay slow but even thats rare. Ive had only a few drop out in the middle of a season and i dont think a contract was going to prevent that. If someone doesnt want my service anymore than so be it. Im not gonna shove it down theyre throat w/ a contract. Not a small residential anyhow.

Now,, there was thread on here a few weeks ago where a lady tried to stiff a member because of a divorce,,, and someone began residing w/ her that could cut the grass. That was unacceptable to me and i might be a crab about that one but generally its a home selling that i see stop service. In that case whatta you do? Nothing.

[Elwood]

Ric, I am glad you can get a residential client to go even pay. Around here, 99% of the time, it is a "no-go". Anyway, I can manage my money just fine and since I keep a sharp eyeball on my numbers at all times anyway, it works out fine for me.

Anything in addition to what is in their Service Agreement is a separate issue and I always provide a written QUote for additional work and have them sign it before starting.

This is the best part. I have known people to want additional work, it gets performed and then the client tries to go back to the "but it was included in my monthly billings, isn't it?" line.

A written "change order" for everything!!

[Ric]

Elwood

Maybe I am forgetting your season is very short. My season although year round is broken into 1/3 heavy 1/3 light and 1/6 + 1/6 Medium transition.

Level payment is not just easy to sell but demanded by customer who are mostly on fixed incomes. We also face low pricing because of the massive amounts of northern loser who come south to live with Mommy and Daddy or Grandma. They push Grandpa's Crapman out of the garage and start cutting. They are all Home Cheapo experts in Pesticide, Irrigation and Landscapes. Most of them stay in business at least 3 months.

However because of the stock market of the 1990's we have a large number of young retirees that Purchase $ 250,000 canal lots and build lovely home on these lots. They demand professional service. So much so that when I sold 200 mowing accounts back in Feb this year the young man that purchased them now has about 50 accounts left. Not a Happy Camper he blames me for his loses and his Lawyer has been sending me nasty Letters. Maybe the reason I am writing this is because I just received another letter today. My reaction of course is of such great concern that I am taking steps not to hurt myself while ROFLMAO. This gentleman was given more than the opportunity to drink.

[Elwood]

Ric, in my area, mowing starts @April 1 and if fall is kind, fertilized lawns can be cut the first week of Nov. Spring and fall cleanups before and after, but not much. An even pay account is difficult for some smaller commercials, but the larger ones like it, but it is 6, 8 or 10 month, almost never 12 months.


On the "nasty-gram", all I can do is smile. I see that happen all the time. Boils down to taking responsibility for your own actions and it sounds like your buyer is looking to point the finger somewhere but in the mirror.

Good Luck! LOL

[Ric]

Ric,
On the "nasty-gram", all I can do is smile. I see that happen all the time. Boils down to taking responsibility for your own actions and it sounds like your buyer is looking to point the finger somewhere but in the mirror.

Good Luck! LOL

Elwood

Thanks but no luck needed in this case. I got the money up front. Everything was totally above board. I tried my best to save these accounts for this individual because I still have the Fert & Squirt. A few of the accounts He lost were my lost also. I now Guide the customers who are unhappy to a good lawn service that will work with me like they should have and promised too. BTW I also provide him with some of my former employees that were servicing the same accounts. Employees will do the type of work you request of them. Interesting how Bean Counter management is not always the best. He now makes a higher margin on each account but has 75% less accounts. Same Accounts Same Personnel Different Results.

[Seascape]

You said yourself they were'nt profitable. Whats he doing ?,,,, trying to blame you cause you had them under sold?

[Ric]

You said yourself they were'nt profitable. Whats he doing ?,,,, trying to blame you cause you had them under sold?

Mr Mike

They were not as profitable as other areas of my business. January 1, 2004 the State of Florida Changed Worker Comp laws which increased my rate because of other areas of my business deal with Landscape installation Or Construction. Lawn Mowing was not effected by these rates. Therefore a 13.6% increase in cost of Mowing operation made it even less profitable. I was looking at opening a retail nursery and the need to buy new $ 10,000 walker lawn mowers. I looked at return on investment and made the decision to sell the Residential mowing off. I let the word out I was selling for 25% a years gross and sold two weeks later for cash up front. Yes I sold out cheaper than I should of or it would not of gone so fast. All accounts were at or higher prices than my local competitors. I could have sold to 10 different guys had I financed the Accounts. However this guy came up with the cash.

I still retain the Commercial account and a few select Residential, that a two man crew can do each week. However Last week I sat on a lawn mower for two days for the first time in 3 years. With the rain out today it looks like I will be doing again this week. In fact maybe I will be sitting on a mower a couple of day each week until Sept.

[Elwood]

However Last week I sat on a lawn mower for two days

I noticed you did not say you walked behind one, ran a string trimmer or broke a sweat! LOL

(jab, jab, jab)

[Ric]

I noticed you did not say you walked behind one, ran a string trimmer or broke a sweat! LOL

(jab, jab, jab)

Elwood

It is only fair that I let my son and Pancho get the exercise they so desperately need as young men. After all I think we need to teach the younger generation good work values.