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picframer
12-19-2009, 06:08 PM
A few months back we were having a discussion about competition, I had posted my neighbour at the end of the street is in the landscaping business and his excavators and other equipment hadn't moved most of the summer, we ran into each other at the mail box a few times, then he had his son ask my son if he thought I would buy him out, then this discussion came up again at a demonstration I was doing for Deere, he had shown up to see the line up.

Anyhow he has been in the business a long time, his machines are very capable but man they look tired, his trailers look like they went through the war, beautiful truck but no lettering.

So at about 3 this afternoon I started getting calls for snow removal, I found it strange they were all from the area I live (same subdivision), had 6 calls in two hours, I was outside putting the plows on the tractors as we have a storm coming tomorrow, I sub all plowing out unless it's within a mile of my house then I send one of the tractors, not interested in putting plows on the trucks as I don't think they are built for it so I let others beat their trucks to death and worry about the maintenance costs.

I don't advertise in the area where I live as there are four guys in the mini excavation business so I stick to the area where we do 90% of our work, about a 30 min drive from my house, next to no competition.

The 7th call was a lady, said she had been speaking to xxxx and he informed her he was getting out of the business and suggested she give me a call, gosh she lives one street over, I said yes we will match your current price for the first plow and inform you if there is going to be a change, well holy smokes I am at call number 19 and it's only 7:00 and the storm isn't until later tomorrow.

I do feel bad for xxxx competition is good but we have to keep the gear looking eye pleasing and we have to market ourselves and do good work to grow.

Anyhow looks like tomorrow evening we will be busy, I had thought we were kicking back for the year and spending some time in the shop but if this keeps up I along with three staff will be hard at it.

Steve
12-20-2009, 03:52 AM
I said yes we will match your current price for the first plow and inform you if there is going to be a change,

Andy, this is very interesting because as we saw in another post, Scott was dealing with a similar issue. Where a local snow plow company was going out of business. Then we were talking about how he should go about attracting the customers from them.

Here you are dealing with this now and when you tell the customer you will match your current price for the first snow plow, can you tell us the logic behind this and why it's a good idea to do this?

When the customer says, the previous company was snow plowing my driveway for $x amount of dollars. Do you follow up with her and ask how long her driveway is? Do you go and visit it first before you agree upon a quote or do you just figure, yea I will do it for that price for the first time, just to get your foot in the door. Then once you are there and plow it for the first time, you can then figure out what you need to charge to offer them the service in the future?

picframer
12-20-2009, 04:43 AM
Andy, this is very interesting because as we saw in another post, Scott was dealing with a similar issue. Where a local snow plow company was going out of business. Then we were talking about how he should go about attracting the customers from them.

Here you are dealing with this now and when you tell the customer you will match your current price for the first snow plow, can you tell us the logic behind this and why it's a good idea to do this?

When the customer says, the previous company was snow plowing my driveway for $x amount of dollars. Do you follow up with her and ask how long her driveway is? Do you go and visit it first before you agree upon a quote or do you just figure, yea I will do it for that price for the first time, just to get your foot in the door. Then once you are there and plow it for the first time, you can then figure out what you need to charge to offer them the service in the future?

I ask four questions 1) Gravel or paved (we have 6 foot blowers on the back of the tractors, 7 foot plows on the front) we blow paved and plow gravel 2) How long is your driveway (I know how long it takes us to clear the typical driveway in our area) 3) What is your address I know my area very well, is the prospect en route to another we already do? If so it's gravy money and so far they are all within 10 min of my house 4) What was the previous company charging.

It's late for these people as the storm that you folks are experiencing, braking records back to 1922, watched the USA news last night, Washington was a mess with 15", so since it's so late to be shopping by offering the service at the current rate for the first plow, is a marketing ploy for me, it shows I care and I do, however at the same time when I say for the first plow, it lets them know or sets the expectation their might be an increase, we will do good work even if it was a low ball but it will cost to have us come back.

After the first plow we ask the client if the job we did met their expectations, same with mowing, some people will not say anything unless asked and if there is a tree you forgot to trim around, that could be the difference between a referral and loosing an account, walk the property with them, I understand it takes time but this is your day in court, it starts the relationship, up sell at the same time, those mulch beds could use some additional mulch, I have a team coming by here next week, for $xx.xx we can beef them up, show you care and I think we all do.

I am going to visit all 21 this morning, already have a route schedule added split between two of the tractors and all are on route to two private lanes we do, kind of a nice Christmas present, 5 hours work tops, around $680.00, operational cost $16.90, staff $ 75.00, my time zip, I will be working in the shop, staff arrive at 5 a.m. to ensure people can get out, we will see how the day goes but I might send them out at 10, I will either SMS or Email all clients (as we charge every time we go out) earlier this afternoon asking if they want to be cleared before midnight and again in the morning. I will know when I leave what they should be charged and wrote a form letter that will be sent via email to those that have to have an increase BUT if I see Lawncare work we can do next year I will send a second letter, your plowing rate should be $35.00 rather than $25.00 however we know you probably had a budget for this season and our company will honor the rate you were paying as we see a number of services we could offer you in the spring and our company is in the business of building relationships, I trust you will seee this as a step in the right direction.

We do not get into hand shoveling, depending on the layout the guys might offer to blow the walkway, this is an additional $15.00 flat fee, it is totally up to them to offer and get the clients ok before proceeding and the walkway has to have either patio stone or brick, no gravel walkways will be blown or plowed, just to much risk.

picframer
12-20-2009, 05:15 AM
I was just outside with my dog having a smoke when something came to me that I did last week.

Went to the doc for my annual check up, he lives 5 min from my house, we generally have a quick conversation, I said who is keeping you plowed out this season, he said he was doing it with an old snow blower, I said what if I gave you free service for this year? He said sure, went on to say we were taking accounts in the area, back of head not really but lets go fishing and see what happens, this is a local community medical centre so guess what, that doctor is now part of my network and yes he has already sent referrals and I dropped our snow removal card off to him.

Padron the pun but it's a snowball effect and I would like to think we all have a doctor, dentist etc. these people are the root connection in your community because like us, they build relationships.

Steve
12-21-2009, 05:44 AM
I said what if I gave you free service for this year? He said sure, went on to say we were taking accounts in the area, back of head not really but lets go fishing and see what happens, this is a local community medical centre so guess what, that doctor is now part of my network and yes he has already sent referrals and I dropped our snow removal card off to him.

So much great stuff here to talk about! So in this situation, you offer him free service for the year to kind of like pull him into your network and with him knowing it's free, he might feel more compelled to send you other customers vs not? Why do you feel he was chosen over others to give the free service too? Was there something about him or his situation in the community that made him stand out most? Does it just come down to he has a lot of customers himself that are all local and he is a good beacon to promote your services?

Did he look like he had any lawn care issues too?

We do not get into hand shoveling, depending on the layout the guys might offer to blow the walkway, this is an additional $15.00 flat fee, it is totally up to them to offer and get the clients ok before proceeding and the walkway has to have either patio stone or brick, no gravel walkways will be blown or plowed, just to much risk.

Too much risk in that you might damage property or more of liability risk that you might not get all the snow and ice off?

I ask four questions 1) Gravel or paved

Which takes longer to plow?

those mulch beds could use some additional mulch, I have a team coming by here next week, for $xx.xx we can beef them up, show you care and I think we all do.

How late into the season will you be able to re-install mulch beds?

picframer
12-21-2009, 08:31 AM
So much great stuff here to talk about! So in this situation, you offer him free service for the year to kind of like pull him into your network and with him knowing it's free, he might feel more compelled to send you other customers vs not? Why do you feel he was chosen over others to give the free service too? Was there something about him or his situation in the community that made him stand out most? Does it just come down to he has a lot of customers himself that are all local and he is a good beacon to promote your services?

Did he look like he had any lawn care issues too?


Too much risk in that you might damage property or more of liability risk that you might not get all the snow and ice off?


Which takes longer to plow?



How late into the season will you be able to re-install mulch beds?

We offered free service to get his attention, then do an outstanding job and the rest falls into place.

I would be willing to bet no other patient has done something like this and added if you know of anyone looking for plowing or excavation service, we would really appreciate the referral. If it works out we will continue to do little free things for him, like lawn care or whatever.

Doctors, Dentists, Lawyers, Accounting companies, Tax return companies, they know the people in our area, tap into it and see what happens.

I am not sure if he looked at our Lawn Care, he was interested in the Organic products, I suspect he will at some type look at the website.

We can plow a 100 foot driveway in about 10 min tops, the thing is or key, get a bunch of driveways door to door, that is what the guys are reporting back to me this morning and just going almost door to door, this is ideal, now some of these will be one time deals, that is fine, just get their credit card number, give them a card and tell them to contact us for future service, if they want to be added, send me an sms and I will have Holly get them in the system.

Steve
12-22-2009, 06:00 AM
How late into the season can you redo mulch beds? Can it be done in Winter or is it better to wait until Spring?



I think it is fantastic to experiment with this. Keep us posted on how all this turns out!

picframer
12-22-2009, 09:57 AM
How late into the season can you redo mulch beds? Can it be done in Winter or is it better to wait until Spring?



I think it is fantastic to experiment with this. Keep us posted on how all this turns out!

Everything worked perfect, we can probably take on another 30 and divide between the tractors, a condition with me on snow clearing is we need a credit card number and you will be emailed an invoice followed by a receipt when the credit card is processed, no exceptions, not one person complained.

The guys picked up 9 addional driveways on their route, some are on call most are when we receive more than 2"

Mulching is out bud, don't forget we have the New England climate.

Steve
12-23-2009, 07:47 AM
Everything worked perfect, we can probably take on another 30 and divide between the tractors, a condition with me on snow clearing is we need a credit card number and you will be emailed an invoice followed by a receipt when the credit card is processed, no exceptions, not one person complained.

This points out a good way to keep your accounts receivable to an absolute minimum. You already were out there doing all this hard snow plowing work. Why then make the job tougher by having to later go and track customers down for payment.

picframer
12-23-2009, 01:52 PM
This points out a good way to keep your accounts receivable to an absolute minimum. You already were out there doing all this hard snow plowing work. Why then make the job tougher by having to later go and track customers down for payment.

In order to stay in business we have to, all of us. My accounts receivable has been zero all year, you hire me you will pay me when I am finished, deposits on excavation work only.

Steve
12-24-2009, 07:47 AM
I think all too often though this is over looked by the new lawn care business owner. When you are just getting started, you figure you would rather be working than not working, so as long as you are working, it's like money in the bank. But it is so very important to remember it is not.

Only money in the bank is money in the bank. When you do work for someone and they don't pay you right away, it becomes a burden. You then have to spend considerable energy tracking these customers down to get paid. Sometimes you never see payment from them at all.

The way you choose to handle getting paid from your customers can make the difference between your business becoming successful and it sinking.

picframer
12-24-2009, 07:54 AM
Thanks Steve, this is also a good measurement of what you can expect when the money is due, I had a couple of prospects that when I asked for a credit card or to leave a cheque for example under their green bin, if they flintch or balk, I walk, no exceptions. I have learned over the years to read body language if I even get a hint there will be an issue, it will either be payment in advance or I will move on, I can't afford to run this equipment and work for free.

Steve
12-24-2009, 08:34 AM
For the new start up lawn care businesses, which way do you feel it is best for them to go about billing for lawn care?

Should they do something similar to what we are talking about here for snow plowing?

Should they pay per cut, maybe with a credit card? Should they prepay for the upcoming month of mowing or what do you feel is best?

picframer
12-24-2009, 01:17 PM
For the new start up lawn care businesses, which way do you feel it is best for them to go about billing for lawn care?

Should they do something similar to what we are talking about here for snow plowing?

Should they pay per cut, maybe with a credit card? Should they prepay for the upcoming month of mowing or what do you feel is best?

Expectations is a two way street, our clients tell us what they want and expect, I tell them what we can do and what we expect on payment, cheque when we are done, prepay by month on lawn care if you wish or credit card. Never had one issue this summer even taking cheques that were sometimes very large and I was a bit concerned.

Never be afraid to ask for your money, some clients can read us also and some have the attitude if they can take advantage or squeeze you they probably will, stand tall and firm, there is nothing wrong with asking for your money.

Receivables should never be over 30 days unless it's a government contract, yes those can take 90 due to their process but in this case I simply charge interest after 30 days and I get it, if the company has an issue, then hire someone else, I have only had to walk from two jobs this summer.

Steve
12-26-2009, 09:18 AM
I don't know why this is something so many newer businesses miss, it might have to do with a lack of confidence that they can command such terms. Or maybe they feel that they would rather be working today and worry about getting paid tomorrow. But this has got to be one of the biggest new business killers out there.

Tracking down customers for payment will drain you of every ounce of interest you ever had in your business.

picframer
12-26-2009, 01:18 PM
We might be a service industry but go get your vehicle fixed, maybe the furnace in your house, washer, what about gas, groceries, insurance, try to tell these companies you can't pay for 60 or 90 days and see what happens, we have to stick by the same terms, IMHO.

SuperiorPower
12-26-2009, 02:16 PM
This is a very interesting topic. I think part of my problem is that sometimes we tend to think that asking to get paid is a "dirty topic". Yet, when you are on the other side of the counter or mower (so to speak) you wold not think anything about it if the person were to ask you about payment. The consumer expects to have to pay for the service they are receiving. If they don't they don't need the service. Plain and simple.

Oddly enough, one of my worst paying customers is my next door neighbor. He owes me $35 and has for several months. I seldom see him now, but I used to see him all the time before.... Go figure. He is a cheap skate to begin with so I figure if he stays away I can deal with that. If he comes by and wants something I will flat out tell him I need the money from last time before we even look at anything else. And from here on out, its pay up front BEFORE I release the equipment. PERIOD.

With that said, I know this same customer is going to want to buy a used push mower this spring. No problem, I have several on hand but I will need my money before hand....

Steve
12-27-2009, 09:16 AM
Oddly enough, one of my worst paying customers is my next door neighbor. He owes me $35 and has for several months.

This is a great example, can you tell us how he ended up owing you the $35? Do you think this problem just comes down to the way small businesses are operated or is this more an issue of customers feel they can take advantage of a small business owner, or in this case a neighbor who is a small business owner.

Is this a two way street or can one side clamp down and solve the problem?

The other thing I wonder is, does small business exist because they offer a flexibility in payment or is this not important at all for it to function?

SuperiorPower
12-27-2009, 02:45 PM
This is a great example, can you tell us how he ended up owing you the $35? Do you think this problem just comes down to the way small businesses are operated or is this more an issue of customers feel they can take advantage of a small business owner, or in this case a neighbor who is a small business owner.

Is this a two way street or can one side clamp down and solve the problem?

The other thing I wonder is, does small business exist because they offer a flexibility in payment or is this not important at all for it to function?

The way this happened is he needed the mower, but did not have the money. He said, I'll pay you next week. blah, blah, blah. The reason he thinks he can get away with it is because we are "friends". I think this week I will go over and tell him I need to get paid. I like the guy, like them as neighbors. They watch my place while I am gone. I don't think he is trying to get away with never paying, but simply he may be having a hard time.

I think small business can exist because they tend to still be "human". They still have that human feel to them. Because of that, we tend to feel sorry for people and give them a break or whatever it may be. I am not against giving people a break, if they deserve. I personally give my pastor a break on everything. To me, that is something that is directly between me and my pastor.

Steve
12-28-2009, 10:36 AM
But it is fascinating how it all goes. Somewhere there has to be a happy median. I wish there was some kind of rule of thumb for this, like don't ever have more than X% of your income floating around out there uncollected in your accounts receivable.