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GreenBlue
04-02-2013, 08:24 PM
We are considering using residential contracts to where customers can pay monthly for the entire year. The logic behind this is to make the customer think they are saving money instead of paying every week, but we are still making the same amount of money for the services, except we get payments during the winter months to help with still having an income coming in. I came up with this idea from the Lawn Business School on this website and reading an old post from a member who does this.

The object is to take the weekly amount times the estimated weeks we'll be actively mowing which is between roughly 32 weeks and then dividing that amount by 12 months (Example: $40.00 x 32 weeks = $1,280.00 divided by 12 months = $106.67 per month). I was wondering if anyone else has ever tried this, and also what others opinions on using this type of billing system is, and how could you explain the benefits of this type of contract to a customer?

warbuff
04-02-2013, 10:28 PM
We are considering using residential contracts to where customers can pay monthly for the entire year. The logic behind this is to make the customer think they are saving money instead of paying every week, but we are still making the same amount of money for the services, except we get payments during the winter months to help with still having an income coming in. I came up with this idea from the Lawn Business School on this website and reading an old post from a member who does this.

The object is to take the weekly amount times the estimated weeks we'll be actively mowing which is between roughly 32 weeks and then dividing that amount by 12 months (Example: $40.00 x 32 weeks = $1,280.00 divided by 12 months = $106.67 per month). I was wondering if anyone else has ever tried this, and also what others opinions on using this type of billing system is, and how could you explain the benefits of this type of contract to a customer?


Might want to add in seasonal cleanups, pruning, edging, additional services they might require.

so for example:

Spring cleanup $150
fall Cleanup $200
Prunning $100
32 weeks mowing $1280
Total $1730
Don't forget tax rate in my state is 8.125% $140.56

total with tax 1870.56 / 12 = $155.88 monthly...

GreenBlue
04-02-2013, 10:35 PM
Might want to add in seasonal cleanups, pruning, edging, additional services they might require.

so for example:

Spring cleanup $150
fall Cleanup $200
Prunning $100
32 weeks mowing $1280
Total $1730
Don't forget tax tax rate n my ate 8.125% $140.56

total with tax 1870.56 / 12 = $155.88 monthly...

Yeah we are going to add those services into the contract if they are interested in using them along with mowing, I just used the mowing price by itself as an example. I do thank you though for reminding me of this. I'm working on a contract right now, and will be uploading a sample of it within the next few days.

phouse65
04-02-2013, 11:01 PM
we do that with customers that want multiple services. It gives them a chance to do all of the services that they want and be able to afford them. It is a good way to sell more than mowing and helps them and helps you for winter months. We have a section on that on our webpage (greatriverlawns.com) that shows customers what they can do. Good luck to you.

ratchetmaster2
04-03-2013, 12:29 AM
The problem is that you're relying on credit. This can come back to bite big companies, and certainly small companies too. I'm not saying don't do it, but it's a risk. You run the risk of not getting paid.

Also, there's a psychological issue of being charged for something you aren't receiving...kind of. If I got a bill in January for lawn mowing, I would think "why am I paying for lawn mowing, when my lawn hasn't been mowed in months?"

You might want to just divide it over the 32 weeks, then offer the option of dividing it over 12 months of the customer asks. Personally, I hate being owed money by a client. Sometimes, they just don't pay, and there's not much you can do about it.

LawnBoy0311
04-03-2013, 07:07 AM
The problem is that you're relying on credit. This can come back to bite big companies, and certainly small companies too. I'm not saying don't do it, but it's a risk. You run the risk of not getting paid.

Also, there's a psychological issue of being charged for something you aren't receiving...kind of. If I got a bill in January for lawn mowing, I would think "why am I paying for lawn mowing, when my lawn hasn't been mowed in months?"

Bingo.

In the past I did monthly billing. It went well, but towards the end of the season, I ended up spending too much time trying to collect. When the year comes to an end, thats when all the major holidays are. Guess where the money is spent? X-Mas presents, traveling, etc.

Last month I picked up a full service account because of the season for your billing. She couldn't justify paying the $225 in January.

Maybe a signed contract will be much better. Who knows. It could be worth a shot though. I think you mentioned before this will be your first year....you may want to start off smaller and them attack at full speed. Advertising is a lot of work, the customers don't just all call at once when the weather gets nice. Getting into full service contracts your first year with no experience is a big risk.

Steve
04-03-2013, 01:00 PM
Last month I picked up a full service account because of the season for your billing. She couldn't justify paying the $225 in January.

How was that working out? Was she paying $225 per month to another company and she had, had it with paying per month like that? Or what? How did you differ to attract her?

BelleCityLawn1
04-03-2013, 01:19 PM
The way I do it is each customer has 2 options. They can pay by the mow, or pay a certain monthly fee for the usually 8 months of mowing. For larger contracts I would consider the 12 month payment option but I would make sure to give each customer the option and write it all up in a contract. This way they can choose exactly what they want.

Thanks!

warbuff
04-03-2013, 01:25 PM
The problem is that you're relying on credit. This can come back to bite big companies, and certainly small companies too. I'm not saying don't do it, but it's a risk. You run the risk of not getting paid.

Also, there's a psychological issue of being charged for something you aren't receiving...kind of. If I got a bill in January for lawn mowing, I would think "why am I paying for lawn mowing, when my lawn hasn't been mowed in months?"

You might want to just divide it over the 32 weeks, then offer the option of dividing it over 12 months of the customer asks. Personally, I hate being owed money by a client. Sometimes, they just don't pay, and there's not much you can do about it.

I personally prefer to only offer a contract like this to a commercial client but, if I were to offer this to a residential client it would have to be under contract and be a client I've had a long term relationship so payment wouldn't be an issue.

LawnBoy0311
04-03-2013, 01:42 PM
How was that working out? Was she paying $225 per month to another company and she had, had it with paying per month like that? Or what? How did you differ to attract her?

I estimated a cost for me to do it, but before I gave it to her, I asked her what she was paying. She told me $225. I gave her my price which was higher, and said I only charge for 7 months of service. I explained to her she'd save "X" amount of $$ and she was very happy with it. I was happy too because I got more than what I estimated.

She says the other guy was doing lousy work and charging too much, so if I do good, she has friends in the neighborhood that will change....I'll only believe that when I get the calls.

So far so good!

GreenBlue
04-03-2013, 06:31 PM
I'm still working on my contract, a few kinks to work out and working out the formatting, but I'll be uploading it sometime on Friday for all to comment on, I appreciate the feedback so far and learning quite a bit on how people do stuff in this area.

GreenBlue
04-03-2013, 07:46 PM
Ok, I got done way before I anticipated. Here is our rough draft contract, I couldn't wrap my mind to get it to look exactly as I wanted, because I'm wanting to make it a universal contract where it could be just weekly service, or if they are interested in having a monthly payment and paying over 12 months, I wanted to make sure to list services that could be combined into the total price they'd be paying every month. Hopefully everyone can see this as they read through it. Not very easy to get it the way I wanted, mainly because I'm dealing with alot of personal things with my ongoing divorce. Anyway please look it over and let me know either way.

phouse65
04-03-2013, 07:53 PM
We take their credit or debit card and charge it monthly. They sign a contract and we go from there. We have not had a problem yet.

SNethercutt
04-03-2013, 10:15 PM
I see a few problems.

There is no clause in case of a storm. I don't know where you are. But company's around me have run into issues with customers thinking the company should clean up after a storm for free. Not the case. Its an additional charge and your customers are first on the list.

Also you don't have a breach of contract clause. Meaning they could cancel at any time with no repercussions. Meaning if they are paying $300 a month, and they cancel. You loose 300 the next month until you fill their spot. I require 30 days written notice, and breach of contract requires customer to pay 50% of remaining contract minus cost to do work.

I have to read again but just a couple right off the bat. And I know we don't want to make people feel stuck, but you have to otherwise they will get you to so something and then bail on you because you are financing your work.

GreenBlue
04-04-2013, 08:43 AM
I see a few problems.

There is no clause in case of a storm. I don't know where you are. But company's around me have run into issues with customers thinking the company should clean up after a storm for free. Not the case. Its an additional charge and your customers are first on the list.

Also you don't have a breach of contract clause. Meaning they could cancel at any time with no repercussions. Meaning if they are paying $300 a month, and they cancel. You loose 300 the next month until you fill their spot. I require 30 days written notice, and breach of contract requires customer to pay 50% of remaining contract minus cost to do work.

I have to read again but just a couple right off the bat. And I know we don't want to make people feel stuck, but you have to otherwise they will get you to so something and then bail on you because you are financing your work.

One problem I am running into is keeping the contract one page, and its hard to fit everything without making the text in the contract too small to be read. But it would be good to be able to add a breach of contract clause.

SNethercutt
04-04-2013, 09:32 AM
Don't worry about keeping it one page. Hardly ever am I given a one page contract!!! You want to make sure that you have your butt covered in case something happens. Mine is two pages. Will upload later, I'm at Texas Children's with my son today.

LawnBoy0311
04-04-2013, 12:36 PM
Have you ever thought about not using a contract for residential? Have you looked at the pro's vs cons?

GreenBlue
04-04-2013, 02:36 PM
Have you ever thought about not using a contract for residential? Have you looked at the pro's vs cons?

Considered heavily and its mainly a protection from customers who never pay, its a way to have some sort of a signed agreement to where each party knows what's expected and being charged, and if payment becomes an issue, we have a legal document to take to court if needed.

GreenBlue
04-04-2013, 04:12 PM
Don't worry about keeping it one page. Hardly ever am I given a one page contract!!! You want to make sure that you have your butt covered in case something happens. Mine is two pages. Will upload later, I'm at Texas Children's with my son today.

Looking forward to your contract setup.

ratchetmaster2
04-04-2013, 11:32 PM
Have you ever thought about not using a contract for residential? Have you looked at the pro's vs cons?

Exactly my question.
I feel that residential contracts would be so much more damaging to my cash flow than helping it. People hate being locked in with a contract, I know I do.

Besides, them signing a contract doesn't make it impossible for you to get stiffed on payment. A customer can still call their bank and cancel a check or credit card payment. Then you'll say "but then I have evidence to take to court". You ain't going to court either way, pal. With or without a contract, it's $30. Losing $30 after making $3000 is the cost of doing business.

GreenBlue
04-04-2013, 11:50 PM
Exactly my question.
I feel that residential contracts would be so much more damaging to my cash flow than helping it. People hate being locked in with a contract, I know I do.

Besides, them signing a contract doesn't make it impossible for you to get stiffed on payment. A customer can still call their bank and cancel a check or credit card payment. Then you'll say "but then I have evidence to take to court". You ain't going to court either way, pal. With or without a contract, it's $30. Losing $30 after making $3000 is the cost of doing business.

Ok, I have to ask this question then - how do you avoid having the potential of non-paying customers? Besides "taking care of them" and "doing a good job".

Grass Doctor
04-05-2013, 12:38 AM
Ok, I have to ask this question then - how do you avoid having the potential of non-paying customers? Besides "taking care of them" and "doing a good job".

its call cancelation fee. :D:D:D mine its 50.00 bucks

ratchetmaster2
04-05-2013, 12:42 AM
Ok, I have to ask this question then - how do you avoid having the potential of non-paying customers? Besides "taking care of them" and "doing a good job".

I've never ever been stiffed. In doing this for 3 years now, I've always gotten paid. Not saying it was always easy. But I've never had a person not pay me for a service at their house.
YOU KNOW WHERE THEY LIVE!! I always say that as a joke. "yeah, paying me after the job is done is how I usually do it. I know you're good for it, I know where you live after all haha"
Does anyone stiff the plumber? the electrician? How about the HVAC guy? No, because they know where you live. I'm not implying that as a threat, but still.
If you're that scared of losing $30, then I think you're in the wrong business. I'm not saying it's ok, at all, but every business loses money from non-paying customers. You think nobody has dined-and-dashed at a restaurant before? Ever heard of uh...shoplifting? How about a foreclosure, ever heard of one of those? It is the cost of doing business, you canNOT eliminate risk. You can minimize risk, but contracts, I feel, are not the way to do it.

Besides the feeling of suffocation from a contract, there are other problems. Like I said, a person can STILL stop payment and screw you.
You know what the problem is? Customers are more likely to steal/not pay if they see it as a faceless corporation. "oh, it's ok to steal from Wal-mart, they make billions, losing $50 won't affect them". By forcing customers to sign a contract, you are looking more and more like a faceless, ruthless, humanless corporation.
You know why nobody has screwed me? Because I'm a 18 year old kid busting his *** trying to make money.
Why don't you have some trust? After all, the customer is trusting YOU on their property. Trusting YOU to spray chemicals where their family and pets live. I know some people are pure scumbags, but what happened to innocent until proven guilty? Give a little, and you'll get farther.

ratchetmaster2
04-05-2013, 01:05 AM
You know the big guys are gonna come in here, slap you around, and tell you to stop fooling around with residential accounts anyway. "there's no money in 'em", you know.

Do what you feel is best. I'm trying to have an educated argument here: Are residential contracts beneficial or not?

I'm saying that they aren't, and your defense isn't holding up too well. You're only argument point is "I don't wanna get screwed on payment (oh, and doggy poopoo)"

LawnBoy0311
04-05-2013, 06:13 AM
You know the big guys are gonna come in here, slap you around, and tell you to stop fooling around with residential accounts anyway. "there's no money in 'em", you know.

Do what you feel is best. I'm trying to have an educated argument here: Are residential contracts beneficial or not?

I'm saying that they aren't, and your defense isn't holding up too well. You're only argument point is "I don't wanna get screwed on payment (oh, and doggy poopoo)"

A lot of the "big guys" are actually going back to residential. Higher profit margins. Majority of commercial properties take the cheapest bid....so be prepared to lose because someone will come in cheaper. Ask DPLD (Where are you??????). He does a ton of commercial and I think I remember him saying he was going back to residential.

Greenblue, you've got a lot to learn my friend. How old are you and your buddy? When did you come up with this genius plan to start a business? A contract will not make people pay. It's an agreement between you and the customer on the services your going to perform. You can write all the fine line crap in there all you want....it doesn't mean they have to do it. Think of it this way.....you cut my grass for $150 a month. After the first month, I don't pay you. You take me to court and after all the fee's and legal battle, you had to pay just as much if not more in court costs. It's up to the judge who wins.

An easy way of not getting stiffed is to bill in advance. Cell phone carriers do the same thing.

The reason for my question of pro's vs con's was to see if you thought out your plan. Good luck with your business, I wish you the best.

ratchetmaster2
04-05-2013, 09:18 AM
Exactly. The court costs.
You're scared of losing some money, so you want your customers to sign a contract.
Think about all the money you're going to lose by making them sign a contract. Most customers will say "no thanks, I'll find someone else".

mac83
04-05-2013, 09:45 AM
just my 2 cents.... this is the reason that i do ( Pay me then i Mow )

i do not do ( Monthly Billing )
I do not do ( Weekly Billing )

When i Pull i Check my customers ( Door Mat ) or hidden location for my payment ...

if it is there then i mow and so on

if no payment is there i call my customer to let them know that they forgot to leave payment and either i get i dont need lawn care this week or can you mow later in the day when i get home

i only do ( contracts ) for commerical accounts or Real estate agents

no contracts for Res. accounts

GreenBlue
04-05-2013, 10:28 AM
A lot of the "big guys" are actually going back to residential. Higher profit margins. Majority of commercial properties take the cheapest bid....so be prepared to lose because someone will come in cheaper. Ask DPLD (Where are you??????). He does a ton of commercial and I think I remember him saying he was going back to residential.

Greenblue, you've got a lot to learn my friend. How old are you and your buddy? When did you come up with this genius plan to start a business? A contract will not make people pay. It's an agreement between you and the customer on the services your going to perform. You can write all the fine line crap in there all you want....it doesn't mean they have to do it. Think of it this way.....you cut my grass for $150 a month. After the first month, I don't pay you. You take me to court and after all the fee's and legal battle, you had to pay just as much if not more in court costs. It's up to the judge who wins.

An easy way of not getting stiffed is to bill in advance. Cell phone carriers do the same thing.

The reason for my question of pro's vs con's was to see if you thought out your plan. Good luck with your business, I wish you the best.

As I have said before this will be my first lawn service, I don't know all the in's and the out's, I'm trying to make decisions based on what others have done and been successful with. I am 28 and my best friend and business partner is 21. Its very confusing though when you hear of someone doing something, so you think its a good idea and then someone else says no you don't want to do that because blah blah blah. I am not afraid of losing $30, I've tried to learn what I can on here and tried to get good advice on different things, most have given me good advice. I'm just wanting to do what I can. I'm not trying to get treated like an idiot or like I'm stupid, this type of business I have never had before so I only know what I read on here and then see people doing where I live. If everyone noticed I said this was a contract I was working on and "considering" it doesn't mean that I planned on using it, maybe I should have made that more clear, that's why I asked for advice and suggestions.

mac83
04-05-2013, 12:52 PM
the best thing to do ( IMO ) is just read what has been posted / and try certain ways out and when you figure out which way works best for you buddy stick with that one and you should be ok .. Good luck

LawnBoy0311
04-05-2013, 02:28 PM
As I have said before this will be my first lawn service, I don't know all the in's and the out's, I'm trying to make decisions based on what others have done and been successful with. I am 28 and my best friend and business partner is 21. Its very confusing though when you hear of someone doing something, so you think its a good idea and then someone else says no you don't want to do that because blah blah blah. I am not afraid of losing $30, I've tried to learn what I can on here and tried to get good advice on different things, most have given me good advice. I'm just wanting to do what I can. I'm not trying to get treated like an idiot or like I'm stupid, this type of business I have never had before so I only know what I read on here and then see people doing where I live. If everyone noticed I said this was a contract I was working on and "considering" it doesn't mean that I planned on using it, maybe I should have made that more clear, that's why I asked for advice and suggestions.

Get out of "business owner" mode. Don't think of money, don't think of how people will screw you over, don't think of anything related to costs or your business.

After that is all said and done, put yourself in the customers shoes. Afterall, they are the ones who pay your salary. What would you look for in a company? How would you like to be billed? Would you sign a contract with a guy you don't know? Think of what you'd expect from a lawncare company.

When you have your idea, do that! Tweak it a bit here and there. Last year I billed out at the end of the month. I changed it this year to advance billing from suggestions of guys on here. Your first year won't be perfect, but try out different things and stick with what works the best.

You can't do what everyone on here suggests. Just like quotes,estimates, etc...we all live in different area's. Everyone here is different.

You also made no mention of "thinking of using a contract". Your original post was about using a contract for billing a flat rate.

I understand your trying to learn. We all were at one point. Heck I still am! You and I are actually the same age. But if I told you to jump off a bridge, would you do it?? Think CUSTOMERS FIRST.

GreenBlue
04-05-2013, 02:53 PM
Get out of "business owner" mode. Don't think of money, don't think of how people will screw you over, don't think of anything related to costs or your business.

After that is all said and done, put yourself in the customers shoes. Afterall, they are the ones who pay your salary. What would you look for in a company? How would you like to be billed? Would you sign a contract with a guy you don't know? Think of what you'd expect from a lawncare company.

When you have your idea, do that! Tweak it a bit here and there. Last year I billed out at the end of the month. I changed it this year to advance billing from suggestions of guys on here. Your first year won't be perfect, but try out different things and stick with what works the best.

You can't do what everyone on here suggests. Just like quotes,estimates, etc...we all live in different area's. Everyone here is different.

You also made no mention of "thinking of using a contract". Your original post was about using a contract for billing a flat rate.

I understand your trying to learn. We all were at one point. Heck I still am! You and I are actually the same age. But if I told you to jump off a bridge, would you do it?? Think CUSTOMERS FIRST.

Ok I understand this. This is probably a stupid question, but how do you go about billing in advance?

mac83
04-05-2013, 03:36 PM
Just talk to your customer about the perks of paying ahead of time or paying a lump sum at one time and give them a deal when they do

SNethercutt
04-05-2013, 04:10 PM
Look at the bigger picture people!!!

warbuff
04-05-2013, 10:07 PM
Get out of "business owner" mode. Don't think of money, don't think of how people will screw you over, don't think of anything related to costs or your business.

After that is all said and done, put yourself in the customers shoes. Afterall, they are the ones who pay your salary. What would you look for in a company? How would you like to be billed? Would you sign a contract with a guy you don't know? Think of what you'd expect from a lawncare company.

When you have your idea, do that! Tweak it a bit here and there. Last year I billed out at the end of the month. I changed it this year to advance billing from suggestions of guys on here. Your first year won't be perfect, but try out different things and stick with what works the best.

You can't do what everyone on here suggests. Just like quotes,estimates, etc...we all live in different area's. Everyone here is different.

You also made no mention of "thinking of using a contract". Your original post was about using a contract for billing a flat rate.

I understand your trying to learn. We all were at one point. Heck I still am! You and I are actually the same age. But if I told you to jump off a bridge, would you do it?? Think CUSTOMERS FIRST.

I think is a great suggestion and I would like to add just one simple thing to this, have a plan your comfortable with. How am I going to run my business, ad new customers, bill etc. Boyscout motto be prepared...

GreenBlue
04-05-2013, 10:19 PM
I think is a great suggestion and I would like to add just one simple thing to this, have a plan your comfortable with. How am I going to run my business, ad new customers, bill etc. Boyscout motto be prepared...

Having a plan is good enough for me, I'll post a few more questions I'll have on here, and then once I get my equipment and trailer I'll post those pictures, but after that probably won't post that much at all unless its an update here and there or to answer someone's question if I can....

SNethercutt
04-06-2013, 10:12 AM
Contracts aren't really for mowing. I use them in the following manner.

Customer Josh is paying $200 a month to have his lawn mowed. So he budgets $200 monthly to pay his lawn guy. Totaling about $1600 a year, for cuttings.

I approach josh and say for $300 a month we can mulch once a year, weed beds monthly, keep hedges trimmed, fertilize, control ants, and mow.

Josh says I can get that for only $100 more a month? You say "yes" on a 12 month contract. And you use the contracts to protect both you and him.

Josh knows he can afford $200 a month. Now he has to figure if he can afford $300.

If customer agrees, you just turned your $1600 a year customer to $3600 a year!

Contract worth it.. I say hell yes. What about that isn't worth it. I got this exact contract. Same numbers. I spent $250 on mulch and 4 hours on initial clean up and mulch job. Now its just maintaining..... when the weeds get controlled you don't have a problem anymore.

How anyone says its isn't worth it. Beyond me.

As far as court goes, apparently people don't fully understand the legal system.

I take josh to court because he failed to pay. He has breached the contract. He owes me for months we have performed services, plus the breach of contract penalty, which in my case is 50% of remaining contract value.

If josh doesn't pay this amount. I start keeping track of my time I have spent trying to collect this debt, typing letter, making phone calls. Also keep up with any expenses you have trying to collect, such as sending certified mail, fuel cost and so on.

I also accumulate late fees on past dues accounts at 19.99% MONTHLY.

After 30 days of non payment, I send a certified letter stating if not played within 15 days criminal charges will be filed, and a civil suite as well.

Any cost you have during a civil suite process, can be added into the lawsuit. Even attorneys fees.

So say josh owes me $300 plus 19.99% interest plus a late fee and the 50% of remaining contract. So he now owes me $2,000.

Plus my time and cost. My time at my normal rate in course of busjness per hour. So I have 2 hours in it plus the cost of mail and fuel. So that's another $200.

He owes me $2,200.

Now there is court fees and all that up front.

Now I am suing for $2,500.

I will win. I have a contract and clauses within it to protect me from deadbeats. I suggest any contract you write or get offline, you have an attorney make sure that your contract follows the bylaws of your state. If you have a goofy contract with some off the wall crap in it, the judge will look to you, as the writer of the contract to explain in detail and tell which laws support why that should be upheld.

I leave no out for a contract customer. Its iron clad. Why? Because someone will let you mulch and do big jibs and then try to cancel. I don't play that round. You sign the line, your in it for the long haul. Like a car note its not beneficial to get out of that contract agreement.

LawnBoy0311
04-06-2013, 03:08 PM
Contracts aren't really for mowing. I use them in the following manner.

Customer Josh is paying $200 a month to have his lawn mowed. So he budgets $200 monthly to pay his lawn guy. Totaling about $1600 a year, for cuttings.

I approach josh and say for $300 a month we can mulch once a year, weed beds monthly, keep hedges trimmed, fertilize, control ants, and mow.

Josh says I can get that for only $100 more a month? You say "yes" on a 12 month contract. And you use the contracts to protect both you and him.

Josh knows he can afford $200 a month. Now he has to figure if he can afford $300.

If customer agrees, you just turned your $1600 a year customer to $3600 a year!

Contract worth it.. I say hell yes. What about that isn't worth it. I got this exact contract. Same numbers. I spent $250 on mulch and 4 hours on initial clean up and mulch job. Now its just maintaining..... when the weeds get controlled you don't have a problem anymore.

How anyone says its isn't worth it. Beyond me.

As far as court goes, apparently people don't fully understand the legal system.

I take josh to court because he failed to pay. He has breached the contract. He owes me for months we have performed services, plus the breach of contract penalty, which in my case is 50% of remaining contract value.

If josh doesn't pay this amount. I start keeping track of my time I have spent trying to collect this debt, typing letter, making phone calls. Also keep up with any expenses you have trying to collect, such as sending certified mail, fuel cost and so on.

I also accumulate late fees on past dues accounts at 19.99% MONTHLY.

After 30 days of non payment, I send a certified letter stating if not played within 15 days criminal charges will be filed, and a civil suite as well.

Any cost you have during a civil suite process, can be added into the lawsuit. Even attorneys fees.

So say josh owes me $300 plus 19.99% interest plus a late fee and the 50% of remaining contract. So he now owes me $2,000.

Plus my time and cost. My time at my normal rate in course of busjness per hour. So I have 2 hours in it plus the cost of mail and fuel. So that's another $200.

He owes me $2,200.

Now there is court fees and all that up front.

Now I am suing for $2,500.

I will win. I have a contract and clauses within it to protect me from deadbeats. I suggest any contract you write or get offline, you have an attorney make sure that your contract follows the bylaws of your state. If you have a goofy contract with some off the wall crap in it, the judge will look to you, as the writer of the contract to explain in detail and tell which laws support why that should be upheld.

I leave no out for a contract customer. Its iron clad. Why? Because someone will let you mulch and do big jibs and then try to cancel. I don't play that round. You sign the line, your in it for the long haul. Like a car note its not beneficial to get out of that contract agreement.

Contracts don't guarantee a win in court. I've seen plenty of cases where a contract was enforced and the business still lost out big time.

LawnBoy0311
04-06-2013, 03:12 PM
Ok I understand this. This is probably a stupid question, but how do you go about billing in advance?

Heres how I do it:

Feb 1 - invoices go out to be paid by feb. 20th, this covers march services
March 1 - invoices go out to be paid by march 20th. This covers April services.

If customers come in half way into the month, they pay for the rest of the month.

I ran into a few customers who were a little ticked I did it this way, but after I explained it, they were fine. I said cell phone carriers do this, and it gives me more time to spend with my customers instead of trying to collect.

When I changed policies I lost a few customers....but go figure the only customers I lost were the ones I had to chase for payments.

SNethercutt
04-06-2013, 03:21 PM
A contract can be enforced and either party could loose. You get a good contract AND uphold your end of the contract. There is no way you could loose your case in said occurance. And being in business is a gamble. There is no guarantee you will ever get paid with a contract, without a contract, or even with a judgement.

If your not willing to risk loosing $500 any given day, I would say running a business isn't for you. Your stuff is gonna get stolen, your equipment will get tore up. Its called the cost of doing business and we are all gonna have to live with that.

I have almost been stiffed twice for over $600 each time, different clients in my first year of business. I consulted legal advice and found out my options. I handled it and both customers paid me 100% what was owed. Didn't cost me anything but an hour of my time.

GreenBlue
04-06-2013, 10:21 PM
I'll take that into consideration LawnBoy.

warbuff
04-07-2013, 08:18 AM
Contracts aren't really for mowing. I use them in the following manner.

Customer Josh is paying $200 a month to have his lawn mowed. So he budgets $200 monthly to pay his lawn guy. Totaling about $1600 a year, for cuttings.

I approach josh and say for $300 a month we can mulch once a year, weed beds monthly, keep hedges trimmed, fertilize, control ants, and mow.

Josh says I can get that for only $100 more a month? You say "yes" on a 12 month contract. And you use the contracts to protect both you and him.

Josh knows he can afford $200 a month. Now he has to figure if he can afford $300.

If customer agrees, you just turned your $1600 a year customer to $3600 a year!

Contract worth it.. I say hell yes. What about that isn't worth it. I got this exact contract. Same numbers. I spent $250 on mulch and 4 hours on initial clean up and mulch job. Now its just maintaining..... when the weeds get controlled you don't have a problem anymore.

How anyone says its isn't worth it. Beyond me.

As far as court goes, apparently people don't fully understand the legal system.

I take josh to court because he failed to pay. He has breached the contract. He owes me for months we have performed services, plus the breach of contract penalty, which in my case is 50% of remaining contract value.

If josh doesn't pay this amount. I start keeping track of my time I have spent trying to collect this debt, typing letter, making phone calls. Also keep up with any expenses you have trying to collect, such as sending certified mail, fuel cost and so on.

I also accumulate late fees on past dues accounts at 19.99% MONTHLY.

After 30 days of non payment, I send a certified letter stating if not played within 15 days criminal charges will be filed, and a civil suite as well.

Any cost you have during a civil suite process, can be added into the lawsuit. Even attorneys fees.

So say josh owes me $300 plus 19.99% interest plus a late fee and the 50% of remaining contract. So he now owes me $2,000.

Plus my time and cost. My time at my normal rate in course of busjness per hour. So I have 2 hours in it plus the cost of mail and fuel. So that's another $200.

He owes me $2,200.

Now there is court fees and all that up front.

Now I am suing for $2,500.

I will win. I have a contract and clauses within it to protect me from deadbeats. I suggest any contract you write or get offline, you have an attorney make sure that your contract follows the bylaws of your state. If you have a goofy contract with some off the wall crap in it, the judge will look to you, as the writer of the contract to explain in detail and tell which laws support why that should be upheld.

I leave no out for a contract customer. Its iron clad. Why? Because someone will let you mulch and do big jibs and then try to cancel. I don't play that round. You sign the line, your in it for the long haul. Like a car note its not beneficial to get out of that contract agreement.


Just having little fun and possibly playing devils advocate...
What if your client dies in court of a heart attack after the crap storm you've unleashed on him (LOL) and his estate tanks 10 years to settle (Ouch), only to find there is no money left in the estate to pay the debt (Ugh) and what little was left of the client's assets are gone and there's nothing left worth fighting for (Bummer)?

I was pretty amused myself till I realized my kids are fighting already and its only 9:30 am on my only day off argh Karma has caught up with me!

SNethercutt
04-07-2013, 09:48 AM
Lawn boy,

Customers will get upset with you anytime you change anything. There are people out there that hate change.

But anytime someone gets upset about your change just explain that you have to make changes to your business to better handle the ways of the world that year, in order for your business to run as smoothly as possible to ensure you can be there next week to care for your customers.

Me on the other hand I invoice after services are performed. I keep up with all accounts and bill every customer either at the first or middle of then month. Whichever they choose. I have had nobody stiff me since I started this. The exception is for people who will owe more than $500 at the end of the month, they pay upfront or half the bill every two weeks. Just business practice that I don't carry accounts greater than $500 dollars.

kslawn
04-07-2013, 09:48 AM
I start out the season by sending a letter (feb) to confirm the customer wants the same service as last year..then we get contracts signed (mar)...& I have them all pay by the 5th of every month...I send out a 'reminder of payment due' on the 20th of each month & they are due by the 5th of the next month..LawnBoy & I are similar in that except I do have most sign contracts,but I dont make them,I give them a choice, & I've never had many problems with payment other than being late sometimes & I call & we resolve the issue if possable...very rarely have I had to disscontinue service, but by doing so , usually is good incentive for them to pay!I also have my commercials pay that way too!

GreenBlue
04-08-2013, 06:14 PM
Ok this is really confusing the crap out of me. If you don't have a contract, and you'd prefer that a customer pays monthly, even if its during the mowing season and you don't get customers paying everything single month of the year, then how do you get a customer to understand that this is how you bill? I'm getting what people are saying about how they bill their customers and when they bill their customers, but what I'm failing at getting and having someone explain is how do you explain this to a customer and what do you say to the customer to get this type of an agreement in terms of monthly billing?

SNethercutt
04-08-2013, 06:41 PM
If your just mowing, bill ahead or invoice after whatever fits you. 12 month payments arent for just mowing. But if you have a customer who has beds they don't take care of their self and always bug you with doing something that's when you try to perk their interest in a contract to do all the things and draw payment out over 12 months. Otherwise aren't doing much good for yourself drawing mowing payment out like that.

GreenBlue
04-08-2013, 06:50 PM
If your just mowing, bill ahead or invoice after whatever fits you. 12 month payments arent for just mowing. But if you have a customer who has beds they don't take care of their self and always bug you with doing something that's when you try to perk their interest in a contract to do all the things and draw payment out over 12 months. Otherwise aren't doing much good for yourself drawing mowing payment out like that.

Thanks for the information, if I decide to go with a contract I "MIGHT" (have to put that in there before "someone" freaks out) consider that, and I am well aware that a contract wouldn't be for just mowing and would include other services, but this still doesn't answer how you are going to explain monthly billing to a customer so they understand your billing method. I get doing your services and billing every month and all that wonderful stuff, but I'm looking deeper into this by figuring out how you explain this......

SNethercutt
04-08-2013, 08:38 PM
ok I get it.

First you have to figure out if the customer would even concider a contract. do they get alot of services from you... fertilizing, mowing, mulching, weeds and so on. if so continue reading.

when they mention to you, doing something extra, this is a good time to bring up....

this is my pitch line....

Would you concider a yearly contract. What it is, is I basically add up all of the services you would request for the next 12 months, and instead of you paying for mulching at one time and coming a few hundred out of pocket, I am basically financing it out over 12 months so that I still recieve an income during months that are normally down time for me.

We can build a custome package to include things that are custome fit for you, and you are not paying for services you do not want or need.

The benefits of the contract are that your property is always professionaly maintained by us. It keeps you from having to spend your time off in the yard, and gives you more time with your family.

Also, instead of paying our normal hourly rate, you get a discount of $10 per estimated hour for any services performed outside of the contract. You also get a discount on all services being performed in the contract, such as instead of paying $85per yard of mulch installed you will only be paying $75, and the cost is drawn out over 12 months.

all in all you have to make sure your target customer is in the position to need this. If you go to a customer who doesnt need this, there going to sound intrigued until they hear the price then run you off thinking your trying to get over on them. My biggest luck with these contract is business owners. They love these contracts. They dont have time for yard crap, and whats $350 a month to someone who makes damn good money?

GreenBlue
04-08-2013, 09:37 PM
ok I get it.

First you have to figure out if the customer would even concider a contract. do they get alot of services from you... fertilizing, mowing, mulching, weeds and so on. if so continue reading.

when they mention to you, doing something extra, this is a good time to bring up....

this is my pitch line....

Would you concider a yearly contract. What it is, is I basically add up all of the services you would request for the next 12 months, and instead of you paying for mulching at one time and coming a few hundred out of pocket, I am basically financing it out over 12 months so that I still recieve an income during months that are normally down time for me.

We can build a custome package to include things that are custome fit for you, and you are not paying for services you do not want or need.

The benefits of the contract are that your property is always professionaly maintained by us. It keeps you from having to spend your time off in the yard, and gives you more time with your family.

Also, instead of paying our normal hourly rate, you get a discount of $10 per estimated hour for any services performed outside of the contract. You also get a discount on all services being performed in the contract, such as instead of paying $85per yard of mulch installed you will only be paying $75, and the cost is drawn out over 12 months.

all in all you have to make sure your target customer is in the position to need this. If you go to a customer who doesnt need this, there going to sound intrigued until they hear the price then run you off thinking your trying to get over on them. My biggest luck with these contract is business owners. They love these contracts. They dont have time for yard crap, and whats $350 a month to someone who makes damn good money?

Ok, forget the contract stuff, I'm not asking about the contract stuff. Let's go about it this way shall we? Maybe you'll see what I'm asking.....


Customer: "Can you mow my grass?"

Business Owner: "Of course I can."

Customer: " How much would you charge me?"

Business Owner: "Well for this size yard it'd be $40.00."

Customer: "And can you explain how you bill?"


Do you see what I'm looking for now?

SNethercutt
04-08-2013, 10:31 PM
Well how are you planning to bill them?

If its pay in advance, if your a big compaany its easy to say I require payment upfront.... what big business is going to run off with $100.

Small guy, chances are someone isnt giving you $200 up front in good faith your not on drugs and running away with their money.

ut you just tell people how you bill. I tell them "payment for first service is due at time of service after that, we will out on the 1st due by the 15th or bill on the 15th due on the 30th."

bill me on the 15th <**- customer reply.

ok your payment will be due by the 30th of each month.

Then with their first invoice or customer packet you have a nice letter stating the following.

Payments not made on time will incur a late fee of $30 and add another $15 for each week payment is late. If you cat afford your bill at the time its due for whatever reason, let me know a minimum of 7 days before its due, and we will re-evaluate your status as a customer of our company.

Its easy. They have agreed to be your customer. but most people probably wont be handing you money upfront to start out. later down the road existing customers might, but not new customers. its hard to pull of unless your well established.

GreenBlue
04-08-2013, 10:52 PM
Well how are you planning to bill them?

If its pay in advance, if your a big compaany its easy to say I require payment upfront.... what big business is going to run off with $100.

Small guy, chances are someone isnt giving you $200 up front in good faith your not on drugs and running away with their money.

ut you just tell people how you bill. I tell them "payment for first service is due at time of service after that, we will out on the 1st due by the 15th or bill on the 15th due on the 30th."

bill me on the 15th <**- customer reply.

ok your payment will be due by the 30th of each month.

Then with their first invoice or customer packet you have a nice letter stating the following.

Payments not made on time will incur a late fee of $30 and add another $15 for each week payment is late. If you cat afford your bill at the time its due for whatever reason, let me know a minimum of 7 days before its due, and we will re-evaluate your status as a customer of our company.

Its easy. They have agreed to be your customer. but most people probably wont be handing you money upfront to start out. later down the road existing customers might, but not new customers. its hard to pull of unless your well established.

Finally we are getting somewhere, that takes care of input from SNethercutt LOL.......LawnBoy where are you, how do you go about doing this?

LawnBoy0311
04-09-2013, 07:10 AM
Finally we are getting somewhere, that takes care of input from SNethercutt LOL.......LawnBoy where are you, how do you go about doing this?

Here is how I do it, and I just did it again yesterday and it works.

Customer: Can you mow my crap filled weed yard?
Me: Of course!!!!!!! The charge is $40 per cut. How does that sound?
Customer: Great! Its in the same ballpark as everyone else. How do you bill? Me: Our billing is very easy. We accept cash, check, debit/credit. I send bills out the first of every month to be paid by the 20th of the same month. For example, April 1st invoices go out (due April 20th) that cover May services. May invoices go out (due May 20th) for June services. At this point, the advance billing will click in their head!!! The reason we do this is so we can spend more time with our customers making sure things are done right. It's easier and our customers prefer it. It's no different than cell phone companies. But please keep in mind that your last invoice will be due October 20th, which is great because the holidays are coming up!

I know Cheese and a few others on here can get customers to pay a few months in advance, I can't. Its a high cost living area and some people just don't have the cash to throw down up front. This is the best way for me....so far. I also like it because I get the warm and fuzzy in my stomach showing up to a job that I've already gotten paid for. Anything other than mowing that a customer wants done, I look at it from the money side. For example, I got a call yesterday from someone who wants their shrubs trimmed and small garden weeded. I told her I'll send her the bill of $100. This is the total cost of the job. She'll pay it before I do the job. Now, on the flip side, I have an aeration job I'm doing today, the total is $220. I told the guy 50% is due up front, then 50% is do upon completion. I figured that was fair so it'll give him time to come up with the money or whatever. I try to work with them!!! He asked if he could pay in full after I was done, I said yes of course. If you keep your billing simple, clear cut, and to the point, its easy. Even if they try to stiff you (if you bill out monthly after services are performed)......which brings me to.....

Emails. Believe it or not, emails are considered mail. It is illegal to hack into someones email. Courts also count email as certified mail. I WILL TAKE NO JOB UNLESS APPROVED BY THE CUSTOMER IN AN EMAIL! Every quote I do is emailed to them with the details and scope of the work, as well as billing and the total. I never tell prices or quotes over the phone....it must be email.

This is how I bill full service customers. To give me an upper hand on things, I don't bill them for 12 months. I only do the mowing season (for me, about 7 months). There are 2 reasons I do that....its very hard to collect any money in December, January and February (especially when they haven't even seen your face in a few months!). It also makes the customer feel like they are getting a deal. I break my price down into 7 month totals and bill the same price every month. But again, EMAIL THEM THE QUOTE!

I don't do contracts (although they should be called agreements...). I never tell my customers I don't do them, but if they ask, I say " Well Sir, I don't do contracts because I want to earn your business every week." Little do they know when they confirmed my email, they entered an angreement. Bidding and quoting accounts are no good unless you can sell. But remember, the more you talk, the deeper the hole your digging for yourself. I was always taught to give your sales pitch THEN SHUT UP!

kslawn
04-09-2013, 01:47 PM
GreenBlue,, I have a few billing options for my customers, after we go through the lawn & figure out what they want done, I explain to them that they have several options to choose from..they can either get billed at the end of each month (send out bill on last day of month & due by the 15th) or they can choose a monthly payment plan of which they will recieve a discount for doing so (the discount sells itself most times), if they choose the payment plan then the first payment is due on april 5th & I send out a simple "reminder of payment due" on the 20th of april for the may payment due on the 5th & so on & so on until the last billing for the season which in my case is october 5th...I go 7 months in summer & 5 months in winter but you can stretch the # of months out if you like to make it cheaper per month for your customer,but the service that you agree opon stays the same..the other option I have is for customers that have been with me for a year or longer is to pay ahead for the season ,but, you only want to take on so many of these & save as much as you can out of this for unexpected break downs etc; try & sell the monthly plans the most because you can budgit on what you have coming in every month...the up front I get is mostly for start-up costs & such..hope this helps!