pre pays

[clclawn]

what can i expect out of pre pays? i have never done them before but thought it would help with the early season money. What % is interested, or am i waisting my time

[thillteamsource]

CLCLAWN

I'm not sure what you mean by "prepays". We bill at the first of each month for services to be performed that month with 10 day terms. Most of our residential clients pay in 10 to 20 days. About half are very close to 10 days.

All of our commercial clients pay in 30 to 45 days.

Hope this helps

Tom

[Yard Boy]

A friend of mine told me about an acquaintance who wanted to get into the biz by giving new customers a discounted price if they prepaid for the first years' maintenance. He says he thinks he only got one customer to go for it.

There is no way that I'm going to prepay for service that I haven't received or is not at least started. Discount or not.

A friend from my church was telling me how his brother and dad (among others) were charter "lifetime" members of a local Tae Kwon Do school and had prepaid a discounted rate to help finance the new operation. Everything was cool for the first few years then the guy's wife left him, he went through a depression and lost the business. They did not get a refund.

These are the reasons I think you'll have a hard time getting anything prepaid.

Billy

[RRS]

I offer 10% off the total price of the contract for anyone that pays for 7-month or 10-month service at the beginning of the season. In the two years I've offered that I've only had one customer do it.

[hardboiled]

I did two months service prepaid, giving one customer an initial cleanup in the spring free. Time involved there was equal to one mowing, as they had done most of the cleaning. Later they paid another two months in advance and I believe it was a free shrub trimming I offered. Carried it over into snow plowing with other customers and offered one plowing of 2-4" in exchange for two months in advance.I was encouraged to try it after reading posts about it here. Worked well for me. We had a mild winter here, and I have one customer pikced up late in the season for plowing. They wanted to carry over any unused balance from plowing, and apply it to lawn service. I am willing to do this in their case, since I will most likely get other jobs from them. I don't think many in my market would go a year, but they seem to like the 2 months.

[Phillip Baker]

prepay

Two months is what i can get people to preypay also must be the magic number anything longer and they seem to shy away from it. I dont offer up anything though for pre paying. It works out good when you need to pay cash for something new!!!!

[Elwood]

Pre-pays are a tool to use, but don't let it hurt you.


Many people won't consider pre-paying for mowing, but more will consider it for applications. Why? Pre-paying for mowing is a lot of up front money for them and the number of mows are not set in stone. Applications are and the money is less.

People are also more willing to take advantage of a pre-pay program with a company who has been serving them for a while and has been in business for a while. People will typically not pre-pay with a new company.

The way pre-pays can hurt you is this: Many like pre-pays to get money early, but if you offer a 10% discount, you are "paying" 10% of that money to use it early. Basically taking 10% less for the job, just to get early cash. Follow me?

The best way to deal with pre-pays is to bake in an extra percentage into your price. This way if you offer a discount, they are really paying for all or part of it anyway. If your applications for a residental lawn are $200 for an entire season, and you can sell it for $210 or $215, you are really only a couple dollars higher per application. If you offer a pre-pay discount of 10%, they are paying for $10 or $15 of the $20 you are giving up, leading to you only paying $5 or $10 for the use of your money early. Follow me?

If you are a good salesman with a solid performing program, you can sell a $200 per year job at a few dollars per year more and if you decide to use the pre-pay discount you are not paying for the use of the money (or very little of it), they are.

[Phil Nilsson]

Go with credit cards and you don't need prepays ...