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Andrew's Lawn Care
01-09-2008, 06:34 PM
I have been doing a lot of research and I have kept hearing the word contracts. I was wondering if I could get some help as to what the pros/cons are, and what goes into them?

ABurlison
01-09-2008, 08:16 PM
Here's what I use that basically combines the estimate and contract with the customer. *It basically spells out exactly whats included in what they pay me each and every month and lists additional services should they request them.

Does anyone have any feedback on the form I use, do you think I cover all my bases and is this sufficient to use as the contract as well?

Any ideas and opinions would be great.

Steve
01-09-2008, 09:07 PM
I made a screen cap of it so others can see what you are doing. Thanks for sharing that Andy!

Andrew, have you seen the free contract section above?

realhuntin
01-09-2008, 09:38 PM
Contracts and Estimates/Quotes are 2 different peices of paper.

THIS IS NOT LEGAL ADVICE, IT IS ONLY BUSINESS ADIVCE!

Contract: an agreement, In a contract two or more people agree to do or not to do certain things, a written agreement that can be enforced by law.

Estimate: an opinion or judgement as to how much, how good, etc.

Quote: give the price of.

A contract is a legal binding form that has precedence in court of law, parties enter into a contract, with scope of work, amount to be paid, when to be paid, terms and conditions of payment, exceptions and disclaimers to mention a few things that need to be in a contract.

Its your business but I wouldn't work with out a CLEARLY DEFINED CONTRACT. There are many good contracts in the CONTRACTS link above. The BEST CONTRACT IN THERE IS CONTRACT #8, Commercial Maintenance (16 pages). You can modify it to fit RESI as well as smaller Commercial this is how a contract should look. There is one thing missing from it and that is in trems and conditions there should be something about early cancellation fee's like this; "Early termination by contracting officer for unjust reason shall incur a $249.00 fee added to all outstanding invoices and/or outstanding contract amounts".

So basicly speeking Contracts will save you headache and protect you and the customer as everything is spelled out with-in a contract. Leave NO room for the one's who know how to work the system to work you over. PUT IT IN WRITING! any changes or devations from the contract shall be excuted upon writen change/work orders ONLY! PUT IT IN WRITING!

A good CONTRACT can save you THOUSANDS of $$$$$.

Do not rely on Estimates and Quotes Forms to work as a Contract.
Seek Legal Advice from an Attorney.

Hope this helps

OH BTW there are some Cutting Srevice only contracts in there that I use only for that purpose; CUTTING SERVICE ONLY.

Good Luck
Tim

Andrew's Lawn Care
01-09-2008, 09:51 PM
Thanks steve and everyone else that has given me this info i have seen the contracts link above just haven't really paid much attention to seeing what the difference is. But when should a contract be use like on residential or commercial yards. Also I have heard of a yearly contract for mowing does anyone know about those? I probably end up asking a lot more questions about different things so I apologize if it seems like I don't stop talking.

Steve
01-09-2008, 10:40 PM
Quote[/b] ]But when should a contract be use like on residential or commercial yards. Also I have heard of a yearly contract for mowing does anyone know about those?

It seems that most members of the forum use contracts. When should you use them? Whenever you do work.

See the thing is this. If you get your customers on a contract, they are more likely to stick with you the entire season and not jump to someone else. Also, if you set up a monthly payment plan that covers each month of the year, then you get paid even in the winter and the customers will most likely stick with you for the next year as well.

Quote[/b] ]I probably end up asking a lot more questions about different things so I apologize if it seems like I don't stop talking.

Don't apologize, this is what the forum is all about. You learn from us and we learn from you. Share with us your insights on issues as well!

Andrew's Lawn Care
01-09-2008, 11:58 PM
So how would I go about making a contract into yearly payments?

Steve
01-10-2008, 02:49 PM
Well one of the selling points is this:

Say you cut the lawn 8 months out of the year and it's $150 a month for a months.

You can offer your customer a discount per month fee of $100 a month over 12 months. It's cheaper for them per month but ends up being the same at the end the end of the year in total.

You get paid all year round and they get a cheaper monthly rate.

What's your view on that?

ABurlison
01-10-2008, 03:15 PM
I try and be as simple as I can, but a 16 page agreement for a yard that pays $125/month seems a little ridiculous, isn't there a 1-page contract or agreement out there that could spell out the costs and act as a contract all in 1 document. You know something I could give to a potential customer that spells out what I'm charging for what services, and should they choose to accept it and sign it, it acts as the contract as well? I just try being as simple as I can and not overwhelm potential customers. Do you think the form I use could work as the proposal or estimate and act as the contract as well when they sign it? I could add a few little lines of language to make it more contractual?

THANKS,

ANDY

Andrew's Lawn Care
01-10-2008, 04:06 PM
I think steve that splitting it up into a yearly payment is good for the customer and all but I would rather do the 8 months at a little higher price and than to split it up and actually lose money on the deal. Unless there is someway to get back the money you would be losing on the yards that you do that for. Because I'm in the business to make money not to give out a deal, but thats my opinion and its based on what I have said. I just don't know if splitting up the payments into 12 months has any benefit. Ill take any suggestions into consideration.

realhuntin
01-10-2008, 04:32 PM
Quote[/b] (ABurlison @ Jan. 10 2008,3:15)]I try and be as simple as I can, but a 16 page agreement for a yard that pays $125/month seems a little ridiculous, isn't there a 1-page contract or agreement out there that could spell out the costs and act as a contract all in 1 document. *You know something I could give to a potential customer that spells out what I'm charging for what services, and should they choose to accept it and sign it, it acts as the contract as well? *I just try being as simple as I can and not overwhelm potential customers. *Do you think the form I use could work as the proposal or estimate and act as the contract as well when they sign it? *I could add a few little lines of language to make it more contractual?

THANKS,

ANDY
Hi Andy,

I will try my best to justify reason for a tight Contract. Yes there is a 1 page that I submitted that can be used BUT!

You're right 16 pages may be over kill and overwhelming.
But it protects you as well as the customer benefiting both parties in the contract. Explain that and they will understand and appreciate you as a business man.

WHO SHOULD GET A CONTRACT? EVERYONE, INCLUDING MOM!

I know this isn't easy but if business was easy we would have no employees there would be nothing but business owners. The first time you short cut in your contract trying to keep it to simple you open up the door to be burned.

The single page contract I submitted is about as simple as you should get. There needs to be a paper trail for all business's starting with a Quote, Proposal or an Estimate. These are guidlines for your contract. IF the quote, proposal or estimate matches what is outlined in the contrat then it will stand up in court as proof of what was agreed upon, and you have started a paper trail for that customer. Invoices with detailed work performed in a itemized list is a paper trail.

You should never just work off a quote, estimate or proposal unless it is a one time job, for ex. "one time mulch application" and even then, you should write in something on that form that states and covers payment terms and conditions, scope of work, exceptions and responsibilities.

I hope this helps explain me reasons for a tight contract.

Here's a short story; What I have had to do with one non-paying customer; Signed sealed delivered contact, estimate, job completion form all signed by both (Mr & Mrs) holding both responsible for payment. This is a $50k patio project. Upon completion of work they had 10 days to pay me balance of contract. They failed to do so. (over 7K) I had legal rights to place a mechinics lein on the property, I did so, they still failed to respond to colection letters and the lein, so I acted upon the lein, filed for foreclosure on the property, the rock solid contract and PAPER TRAIL stood out like a sore thumb the judgment was for me 100% because of proper documentation. I was not only awarded the balance of the contrat in full I was also awarded my legal fee's, collection fee's and interest on the overdue invoice as stated in my contract. The customers mortage co made them purchase a bonder, that bonder will pay upon request for payment by judgment.

So no matter what, you got to cover your own a$$, at all times. It dosn't matter if its 7K or $700 or $70. Put it in writing, to many people out there know how to work the system.

A 7k deficit would sink most new LCO and force them to close shop.

Seek LEGAL COUNSEL for any and all advice on leins and proper contract terms. A few bucks spent now could save you big bucks in the future.

Good Luck
Tim

Andrew's Lawn Care
01-10-2008, 04:56 PM
I something similar to me that happened like in mowing, i never thought of doing a contract though, it was only $140 (never mowed there after the first month). So is it alright do give a contract out to people even if you live in a smaller city like i do. Because I have had most of my customers (residential) for 3-4yrs and it seems odd to me to go and give them one now? I definetly will start doing it to commercial.

ABurlison
01-10-2008, 06:21 PM
Yeah, I would agree to a 16 page agreement for anything over $1,000, especially your 50K job. But couldn't the 1 page agreement or whatever suffice for a $125/ month job, I mean if they don't pay by lets say the 15th of the following month, I simply stop service, and I'm only out a few bucks. At this point I only do lawn care, so my jobs are fairly inexpensive. I'm just afraid a $125/Month customer might be turned off by a 16 page agreement and I wouldn't want to risk losing these customers, because these type of customers add up, for fairly simple work. Can you send me the 1 pager your referring to Tim?

Thanks http://www.gophergraphics.com/forum/iB_html/non-cgi/emoticons/yourock.gif

Steve
01-10-2008, 06:27 PM
Quote[/b] ]I think steve that splitting it up into a yearly payment is good for the customer and all but I would rather do the 8 months at a little higher price and than to split it up and actually lose money on the deal. Unless there is someway to get back the money you would be losing on the yards that you do that for. Because I'm in the business to make money not to give out a deal, but thats my opinion and its based on what I have said. I just don't know if splitting up the payments into 12 months has any benefit. Ill take any suggestions into consideration.

You wouldn't lose money on the deal.

8 payments of $150 = $1200
12 payments of $100 = $1200

The customer gets lower monthly prices and you get payment in the winter when you aren't cutting their lawn. The payments are equally budgeted out over the entire year.

Does that help?

Steve
01-10-2008, 06:32 PM
Quote[/b] ]Yeah, I would agree to a 16 page agreement for anything over $1,000, especially your 50K job. But couldn't the 1 page agreement or whatever suffice for a $125/ month job, I mean if they don't pay by lets say the 15th of the following month, I simply stop service, and I'm only out a few bucks. At this point I only do lawn care, so my jobs are fairly inexpensive. I'm just afraid a $125/Month customer might be turned off by a 16 page agreement and I wouldn't want to risk losing these customers, because these type of customers add up, for fairly simple work.

Andy, many lawn care operators don't even use contracts but as you are in business over time, you tend to get burned.

We have the benefit of talking with Tim and seeing how someone who has been in business for decades deals with issues that we might face just starting out.

Sure some of these things may sound outlandish and uncomfortable but that is always a sign of growth. We push forwards and adopt the lessons others have learned before us, so we don't find ourselves in the same problems they were in when they started.

Steve
01-10-2008, 06:33 PM
Quote[/b] ]I something similar to me that happened like in mowing, i never thought of doing a contract though, it was only $140 (never mowed there after the first month). So is it alright do give a contract out to people even if you live in a smaller city like i do. Because I have had most of my customers (residential) for 3-4yrs and it seems odd to me to go and give them one now?

I can see your point of view, maybe you won't want to get your old customers on a contract, but maybe you will. It's nice getting things all stabilized with a contract plus it adds value to your business if you ever wanted to sell it.

pmblair
01-10-2008, 07:07 PM
Hey gang... I agree with everything Tim has said thus far... my only exception would be that Andy's form would be fine for someone who only wants a one-time service...

EXAMPLE:
Customer calls out of the blue and says that they would like you to come out and do a fall clean-up. They usually keep their lawn maintained, but they've just neglected it a bit lately and need to get it back into shape so they can handle it again. They're pretty much telling you that they want to use you one time and one time only. Andy's form should suffice.

HOWEVER.... if you're going to sell that customer on additional services that will require more than a single visit, GO WITH THE LONG FORM!

You can never be too careful!!!!!

This will also provide a remedy to everyone who has been asking "what do I do when a customer won't pay"..... With a contract, the answer is simple... PUT A LIEN ON THEIR HOUSE! ... this may cost you a little bit, but if you're smart, you'll put in the contract that if something happens and they don't pay, then they WILL have to pay for everything if you take action (ie - legal fees, court fees, county filing fees (for liens and such) etc etc etc).

Again, as Tim said, "who should get a contract?" EVERYONE!! Even if it's a one time, one page contract, you should STILL have the customer sign it saying that they agree with the scope of work to be performed and the price you have given them. Make them sign TWO copies... likewise, you sign the SAME two copies. Make sure the customer sees that they are identical forms. Make sure THEY keep a copy and YOU keep a copy. That way, if they call you in a week and say "Hey, I thought you were going to trim my shrubs when you cleaned out the flower beds," you can say "That wasn't a part of the contract... however, I would be more than happy to come back out to your house and do that for you for $X.XX!" = )

Here's another idea to encorporate.... take pictures. LOTS of them. Take pics of any damages on the property when you get there. Take before and after shots. Take pics of possible future jobs...clear pictures of the house and street number will help too. If you keep electronic customer files, make sure you keep these pictures in the same folder as the customer's documents. If you keep hard copies, print these pictures and file them in the customer's file with their contracts and etc. This way, when you've gotten 30-40 customers under your belt, if a customer calls and says "Hey, do you remember that shrub on the right hand corner of the back of my house?" you can pull out the file, look at the pics and say "Yes, it was about 4 feet in diameter and about 6 feet tall... right next to the boxwoods, right?"

That's just a little step, but you can imagine the impression it makes on the customer and the help it will give you in talking with customers.

Sorry.... ranted again...

P

realhuntin
01-10-2008, 08:04 PM
Ok Guys,

First Steve THANK YOU for your added points to this you hit what I was trying to say right, square on the head of the nail.

Iím only suggesting that any NEW customers you bring on should have a paper trail and a contract. I too live in a smaller community. As the older generation passes on and the new families move into the area and as the suburbs extend into my area the importance of a contract increases.

One thing you might want to consider is to send out letters before the season starts with contracts explaining as you have grown, for business purposes you are only asking if they would sign the contract and return it. You will be surprised at how many of them will do this. For the customers that baulk at the contract just say thank you anyway and let them know you will continue the service month to month.

As far as someone not paying for cutting services, NOT, a big deal write it off and move on. But remember a loss is a loss no matter what and too many losses will start costing you more and more money. There are ways to recover this lost money, but is it worth the headaches, time and trouble? Probably not.

If you want to take the chance and gamble with all you have invested and worked for, then by all means go for it. Iím only trying to explain the PROís and CONís of a contract. The point of getting paid for services rendered. Your true customers will respect you as a business man even more. In todayís world, most customers will feel more comfortable with a contract than not. Itís a peace of Mind.

Steve said it BEST; ďContracts put value to your business and shows stability.Ē

If you want to portray yourself as a Professional business, and this is what we all are trying to do, you need to be professional and it starts with proper paper work among proper vocabulary, speak and act professional, conduct yourself in a professional manor. People will respect what you say, if you donít know the answer let them know you donít know but you will find out the answer and get back to them. Most people will look up to you for being honest.

Short Story: 25 years ago I bought my first new truck. The dealer was in Cincinnati OH. (big city) I am from a small country town in Kentucky, reminds you of Mayberry USA. When the sales man asked me to fill out the financing forms I asked why? He smiled in almost a laugh and said so you can drive it home or do you have cash with a smirk. I asked if I could use a phone, as I called my bank and got a verbal approval for the trucks whole amount the salesman mouth fell open in shock, he could not believe I got an approval with no paper work and completed the deal with a phone call. The point of this story is, itís not 1983 and things are different in todayís world.

Good Luck Tim
P.S. Here is the one page contract.

Steve
01-10-2008, 08:18 PM
Thanks Tim for sharing your insights and your sample business contract. Here is a screen shot.

ABurlison
01-10-2008, 08:25 PM
Thanks Tim, your a great leader with a lot of knowledge, its great having someone with great experience to help us out. I think a lot of us are Great at doing the work, but lack the experience or know how on running a business.

I did find a legal form on the internet, you can view a sample to the left, I think its 4 pages and basically summarizes everything you've talked about, what do you think of it, here's the link: *

http://forms.lawguru.com/Oregon_Service_Agreement/p20292/#

Thanks for all the help,

ANDY

realhuntin
01-10-2008, 08:40 PM
Quote[/b] (ABurlison @ Jan. 10 2008,8:25)]Thanks Tim, your a great leader with a lot of knowledge, its great having someone with great experience to help us out. *I think a lot of us are Great at doing the work, but lack the experience or know how on running a business.

I did find a legal form on the internet, you can view a sample to the left, I think its 4 pages and basically summarizes everything you've talked about, what do you think of it, here's the link: *

http://forms.lawguru.com/Oregon_Service_Agreement/p20292/#

Thanks for all the help,

ANDY
Thank you Andy I glad to be of some help.

Please don't buy this, you can get them free her on gopher. There are many to chose from. I posted a downloadable MS doc file of the one page contract, you can edit it any way you want so it fits your company and needs.

Thank again Tim

ABurlison
01-11-2008, 01:38 AM
Here's another thing I've been wondering about, I just had a property managment company sign 3 of my proposals and accept the price, now who exactly is hiring me, the owners of the actual properties or the property management company.

I would think the property management company is the legal care takers of the property, so I'm assuming they would be resposible for hiring contractors, I know they told me when I submit my invoices they just go to the PM company. I never asked them specifically about this, I do know all the proposals were submitted to the PM Company, in their name.

What do you think about this?

pmblair
01-11-2008, 03:18 AM
If the Property Management company is the one signing the contracts and paying you, then you'd be communicating directly with them. If the residents want you to do something else, then you should direct them to speak with the property management group.