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Floridajoe
03-03-2010, 09:05 AM
Just wanted to bring up a conversation about commercial vs residential.
Do most of you find commercial to be a ego thing. Seems most will do whatever they can do to get commercial accounts. Around here that means loosing money. In my area there are sooo many companies going for the commercial at whatever cost. I find that most of the commercials around here go stricktly with the lowest bid. They are not concerned with anything about your service, or what may set you apart from the rest. Just the bottom dollar. Not saying I don't do commercial, I do have some very good commercial accounts. But in general they seem to be more of a pain than my residential customers.
It takes more residential to get to the dollar amount; but it seems I can make almost double per hour on residential than what the commercials go for. I will not loose money on ANY job, just to say I have commercial. I just usually tell them: "next season when the guy you hired has all broken down equipment and no money to replace it; call me I'll be here."
What does everyone else think? Does this seem to be the norm everywhere? Are all the new guys thinking they must undercut commercial pricing to make them feel like a legitimate company? WHY?

XtreemGreen
03-03-2010, 09:46 AM
In my area its mostly the big companies that do the commercial, so I dont know how cut throat it is.. But residential here is real bad...Prices are very low and I dont see how they survive..Im restarting my business this year and guess Im going to have to lower my price to compete..

fieroboi
03-03-2010, 10:13 AM
I think you bring up an interesting point. I concentrate on residential, partially because i enjoy it more than I do commercial. Where I operate, there are a few companies, and they have all concentrated on commercial accounts to the point that the business owners asking for bids do exactly what you said .... take the lowest bid. I too have found that I can make more per hour looking after residential than commercial.

Personally, I feel more rewarded when the little old lady says she doesn't know what she would do without me, or offers cookies, pies or whatever they made as a gesture of thanks. Not to mention that they brag about the level of service I provide to their friends and neighbors. I pick up more accounts from refferals than any other single thing.

That being said I do have the odd commercial account, yet everyone of them is only because I look after their residential property as well. I am willing to sit back, take on all the residential I can handle and let the other guys fight it out for commercial territory.

Lloyd
Blue's YardFX
Camrose, Alberta

Steve
03-03-2010, 11:23 AM
Not saying I don't do commercial, I do have some very good commercial accounts. But in general they seem to be more of a pain than my residential customers.

Hi Joe,

What's been your view as to why you do some commercial accounts? What have you found some of the benefits to be?

pnplawn
03-03-2010, 11:39 AM
I stared out doing residential accounts, then I started getting couple of commercial accounts and then it took off from there. All I did for two years was Commercial accounts. Now I ave moved to submitting bids to the Local City's and County. This is where the money is, But you have to have the equipment and man power to keep up with the demand they put on you.

Steve
03-04-2010, 11:08 AM
Now I ave moved to submitting bids to the Local City's and County.

What kinds of work will you be performing in your government bids and how do you feel the amount they pay differs from commercial or residential jobs?

jfcrawford
04-03-2010, 05:22 PM
Hello,
I'm Been Thinking About This Guy For Two Weeks He's Charging 249+ Tax For 6000sq Feet Including House Is This Lowballing Or What Or Does He Go By Volume. He Also Is Doing Lawn Cleaning For 49.00? This Seems Cheap Or I'm Off My Rocker.now He Put Up His Price Up A Little To 269+tax

mark123
04-03-2010, 08:26 PM
... Do most of you find commercial to be a ego thing. Seems most will do whatever they can do to get commercial accounts. Around here that means loosing money. ...
It's a very good point. Commercial usually takes the lowest cost that meets their minimum insurance requirement and they don't care if they have to replace a lawn care company every year. I do have one commercial account and its not a bad account but I'm not actively seeking more. If another falls into my hands then I'll take it.

The key to making money in this business is efficiency, not the type of accounts you have.

picframer
04-04-2010, 04:27 AM
I personally tend to stay clear of commercial accounts, we have a few but very few. Being a small operation payment is critical and I know from experience in other companies they are slow to pay, I also know the mentality seems to be something for nothing.

One of my largest residential customers is also a property manager, he asked me to look at 20+ properties last year, before I even quoted because I have known him a long time, I asked what they were paying for each and he gave me the proposal, he wanted to switch as they were not happy with the service but I said to him Bruce for what you are paying, that is already less than I could do for the type of work they are doing. He said they didn't want to put a lot of money into the property so I simply passed, now his home is a different story, he forks out pretty big bucks to make it look really good.

Our city have a few really big lawn care companies, three come to mind and the gear they have is a very big investment. I have found a balance as I don't like to keep all my eggs in one basket meaning a variety of services, lawn mowing is at the bottom of the list simply due to profit per hour, we will still do it if the price is right however the other services we do is where the money is in my experience.

Steve
04-04-2010, 05:06 AM
before I even quoted because I have known him a long time, I asked what they were paying for each and he gave me the proposal, he wanted to switch as they were not happy with the service but I said to him Bruce for what you are paying, that is already less than I could do for the type of work they are doing.

Being able to pass on such jobs seems to be so important. So often it seems there is this gut reaction where if there is a job available, you must get it at all costs. It doesn't matter if you are going to make or lose money on the job, its simply a question of you MUST get it.

Fighting that urge and using your brain to figure if it makes sense to take a job can be overwhelming and I bet many businesses that end up closing up shop, do so because they couldn't fight that urge.

Do you find this to be the case too?

picframer
04-04-2010, 05:37 AM
Being able to pass on such jobs seems to be so important. So often it seems there is this gut reaction where if there is a job available, you must get it at all costs. It doesn't matter if you are going to make or lose money on the job, its simply a question of you MUST get it.

Fighting that urge and using your brain to figure if it makes sense to take a job can be overwhelming and I bet many businesses that end up closing up shop, do so because they couldn't fight that urge.

Do you find this to be the case too?

When I started a woodworking company as a hobby business 20 some years ago yes, I wanted every job that was presented to me at all costs. It came to me over time, the quality of my work was far superior to those I was competing against so I started raising my prices. Today in woodworking, my price is my price, I make and sell things you simply can't find and the average woodworker either can't figure it out, doesn't have the tools to do it or generally the experience.

This is what my Yard Care company is all about, the competition around here does not have the equipment we do to offer all the services we can, so they end up renting and generally do not have the experience so the results are generally not satisfactory, they won't come back as the rental cost of the machines has already eaten most of their profit so we get the call, I find this every week.

I fully understand it is a massive investment to get where we are today, I know from my balance sheet we have over $200,000 in equipment which would scare many away, the thing is one has to look at the income statement, when all the gear is working we can gross three thousand a day easy, and because we do so many things, rain days do not matter as we simply spray or do pressure washing or some will do maintenance on the gear so it works perfect.

hotwired
05-26-2010, 03:53 AM
Hi All
Great thoughts. We actually lost nearly all our commercial and municipal work this year to lower bids. We charge $60-$70 per man hour, and even though we're efficient enough to get the same work per hour done as the typical contractor charging $45-$50, we are still sensitive when the economy is perceived as negative. (Not ego talking, It's just been me and the same guy working for nearly 20 years together, can't help but being efficient! We've been together longer than both our marriages put together!)

It's been illustrative on where our "economic weaknesses" are. I think it's advisable to avoid putting things in categories too ruthlessly. "commercial vs. residential" can be misleading. We have amassed a portfolio of accounts over the years of people (both residential and commercial) who are loyal, completely trust us, treat us like gold, and would never dream of leaving. They almost comprise a "third category." And I think that's the point ... looking a little deeper, beyond just hte commercial / rez equation and identifiying who you want to work for. And of course you find out who you want to work for sometiems by finding out who you do NOT want to work for!

We've also developed a feel for what's recession resistant in our work. I beleive the residential, 25-50 per week mowings, with foundation beds, moderate priced spring and fall cleanups, etc. are the most recession resistant for us. They can let the shrubs go a year if things get tough, but in cost cutting, we're pretty far down the line. Contrast that with the $75 per week mowing .... $300-$375 per monht .... a person could probably bit the bullet and buy a cheap rider and break even in one season or less, and might be inclined to do so if he got a cut in pay.

My two cents. 4.30 a.m. , forgive any lack of cohesion!!

aries9245
06-01-2010, 02:20 PM
I have alway's had a slit 40% commercial 60% res this yr is the first time I have experienced a heavy loss on my commercial accounts that I have had for 8yrs being that the rental on most of the properties are at about 50% vacant the property managers had no choice but to get outside bids. And unfurtunatly there are some real jackasses out there giving the work away for nothing I'm telling you guy's there is 0 profit in what they are charging I can see being competitve! but this is isane just a example 1 commercial property takes 4 of my guy's 1 whole day just to do a spring clean-up along with 4 apps at 8 bags of 15000 sq ft bag, shrub trimming 2x a yr and fall leaves removal and clean-up these guys have cut my price in half?:eek: impossible just makes me sick:mad: were do we go from here?

MountainViewGreenskeeper
06-01-2010, 02:38 PM
its not really giving it away they trying to survive. had a plumbing company help me out with some work when I was laid off. They keep getting under bid cause everyone is trying to find work. and its the guys that get laid off that dnt know what it cost to A. do the job and B. do the job right. I helpped with alot of repipes for homes and the new install guys would charge new install prices for exisiting home repipes. SOOOOO much more work is involved with a repipe even more so with the older homes.

So they were slow for the longest time but it picked up. They had to fix problems or unfinished jobs... all sorts of stuff. people even would steal the back flow preventers on the commercial parks. So they had to fix it and put cages around it.

Im not in the commercial side yet but I would imagine that there is a similar case as well with losing to under bid jobs. unemployment may be at 10%ish but there is a lot of underemployment. I know a guy that started a landscape business doesnt even run it except office stuff and that is his side job to make up for the loss of income from his new job.

Lots of usless info but figured it needed to be said.

stevef1201
06-01-2010, 06:07 PM
There are guys here doing Mobile Home Park Lots as cheap as 6 dollars a cut. Now i charge 1.10 per thousands, plus 10 stop charge. That puts mobile home park lots in the range of 13 to 18 dollars each. So i don't do them. I also dont want them. I work about 5 to 6 hours a day, 5 days a week. make 1500 average a week. How? I don't work for free. I do o great work, and make sure my customers are happy. I give them an overview of what to expect, then always do more. I have gotten more jobs by word of mouth advertising, than anything else, so my customers must be happy

new horizon
06-01-2010, 10:04 PM
[QUOTE=Floridajoe;66529]Just wanted to bring up a conversation about commercial vs residential.
Do most of you find commercial to be a ego thing. Seems most will do whatever they can do to get commercial accounts. Around here that means loosing money. In my area there are sooo many companies going for the commercial at whatever cost. I find that most of the commercials around here go stricktly with the lowest bid. They are not concerned with anything about your service, or what may set you apart from the rest. Just the bottom dollar. Not saying I don't do commercial, I do have some very good commercial accounts. But in general they seem to be more of a pain than my residential customers.
It takes more residential to get to the dollar amount; but it seems I can make almost double per hour on residential than what the commercials go for. I will not loose money on ANY job, just to say I have commercial. I just usually tell them: "next season when the guy you hired has all broken down equipment and no money to replace it; call me I'll be here."
What does everyone else think? Does this seem to be the norm everywhere? Are all the new guys thinking they must undercut commercial





Yes I totally agree with you I would rather take the residential work over the commercial it is a pain and you do loose alot of money, and plus the resedential customer appreciates your work alot more than the commercial crowd

Norcal
06-02-2010, 12:34 AM
Here in Nor Cal it seems to be the same I looked into a couple quick stops and 7-11s and asked the manager how can i get his buisiness he said beet the current guys price. The only way I could figure swollowing doing the same work for less than the other guy is making on it now would be a long term contract for a little sense of security but I havent approched any of them with that angle yet

Steve
06-03-2010, 12:36 AM
Here in Nor Cal it seems to be the same I looked into a couple quick stops and 7-11s and asked the manager how can i get his buisiness he said beet the current guys price. The only way I could figure swollowing doing the same work for less than the other guy is making on it now would be a long term contract for a little sense of security but I havent approched any of them with that angle yet

It would be interesting to know how much time and profit could be made on such a property, compared with an equal sized residential property.

Norcal
06-05-2010, 01:24 AM
means to short term income until you can get long term residential loyal accounts that's saying one commercial account equals a few residential accounts out here I see no long term future with small commercial accounts that require no insurance or any type of loyalty other than price.