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CloseCuts
01-15-2009, 08:55 PM
How many people out there drop off a % when a customer wants to pay you cash. Then when the work is all done they want to write you a check? Or when you have a contract that states 1/2 the money up front and the rest of it upon completion only to get done with the job and they say we will send you a check. I'm thinking about tacking in something a little extra for those customers who want to try too screw me over. Whats your opinion?

Steve
01-15-2009, 11:16 PM
Hoss,

Very interesting question.

How many people out there drop off a % when a customer wants to pay you cash. Then when the work is all done they want to write you a check?

Can you tell us how you normally would work this out with the customer? When do you tell them this and how do you document it or is there no documentation?

Or when you have a contract that states 1/2 the money up front and the rest of it upon completion only to get done with the job and they say we will send you a check. I'm thinking about tacking in something a little extra for those customers who want to try too screw me over. Whats your opinion?

Maybe you could break it into thirds? Would that help? 1/3 at signing, 1/3 at mid point and 1/3 at completion? Or would that be too much? Could you have maybe the final payment via credit card?

CloseCuts
01-16-2009, 06:43 AM
Well Steve being a smaller business any money that you lose will hurt you. So when I started anything I priced over 300 hundred i would write a contract up and in that contract it would clearly state that before i start the project i want half upfront and when i finish the other half i get the rest. Then we both sign it. Normally i don't have a problem with customers paying but they want to push off the second part for a week or so by sending me a check through the mail which wasn't part of the deal. So i'm thinking about adding a % or just a flat fee in the contract saying if the payment isn't recieved upon completion there will be an extra fee. As far as the cash goes some custmors like to pay cash which is fine. They want a break which is fine because i don't claim that cash but when we made a deal and then when i'm done you write me a check i'm mad. Then there mad to cuz they didn't understand if the price was 1200 normal I take a little bit of the top so it might be 1100 now but they still want to use a check and i have to explain to them that was only if you paid cash

musician/lawnman
01-16-2009, 09:47 AM
People sometimes ask me If I prefer to be paid cash or check, & some ask if there is a discount.... I just explain that it doesn't really matter to me I claim it anyway (and I do). Right now I have 2 kids, A little boy(2yrs old), & a little girl (almost 4 yrs old) in the same bedroom, I can only get away with that for so log so I will want/need a bigger house in the next year or so. I have pretty good credit which is fine, but if I can't show the income I won't qualify for the loan. So I claim everything. I just explain I do business as I should, I pay insurance, & my taxes, I offer the best prices I can with all that in mind & it is what it is, I don't care how they pay as long as they do.

Steve
01-16-2009, 04:56 PM
Good points. I am guessing the only reason to offer a cash discount is if you are not claiming it on your taxes. But if you are, what difference does it matter if you are getting paid in cash or a check other than the cash won't bounce.

But maybe it just comes down to, should you offer a cash discount and if you say no, then you don't run into the problem of the misunderstanding with the customer.

CloseCuts
01-16-2009, 05:16 PM
Thats very true. Normally its the custmor who ask's and its when the job is over a grand.

Steve
01-16-2009, 09:57 PM
How do you think dealing with these different experiences is going to change the way you handle this? Any advice for others on this?

justin_time
01-16-2009, 10:05 PM
People sometimes ask me If I prefer to be paid cash or check, & some ask if there is a discount.... I just explain that it doesn't really matter to me I claim it anyway (and I do). Right now I have 2 kids, A little boy(2yrs old), & a little girl (almost 4 yrs old) in the same bedroom, I can only get away with that for so log so I will want/need a bigger house in the next year or so. I have pretty good credit which is fine, but if I can't show the income I won't qualify for the loan. So I claim everything. I just explain I do business as I should, I pay insurance, & my taxes, I offer the best prices I can with all that in mind & it is what it is, I don't care how they pay as long as they do.

I'm the same Chuck, I always get asked if I take cash or check. I tell them both since I do tell them it all goes into my books anyways. I won't refuse any cash but they don't get any discount.

c4trash
02-03-2009, 01:31 AM
I'm the same Chuck, I always get asked if I take cash or check. I tell them both since I do tell them it all goes into my books anyways. I won't refuse any cash but they don't get any discount.
Im different than most operators
I may seem as though Im being negative
See my posts in http://www.gopherforum.com/showthread.php?t=8238
and http://www.gopherforum.com/showthread.php?t=8239
It think it all depends on who you are dealing with

In my case I keep my ear to the ground and with people not only losing their jobs but their homes and banks and business's going bust I don't accept checks or credit cards from new clients

With my regular corporate property managers/real estate agents I have a good network with their other contractors and we keep each other updated when we may experience payment problems

All my corporates and some regular domestics are on Due on Completion terms for which I allow 10% (of course this is added on when I quote them originally) and is paid via check or telebanking
The payment is due overnight or within 48 hrs after that if they haven't made the payment or left check in my letterbox they lose the discount
That 10% covers me if I need to go collect the payment or if the money doesn't go through

I mainly deal in cash only and don't operate on credit and find I can negotiate some good deals when I produce folding notes

In these economic times credit cost money and there is no guarantees the company giving you credit/loan wont go under tomorrow
If I was offered a loan at no interest I wouldn't take ithttp://www.gopherforum.com/images/icons/icon7.gif

Steve
02-03-2009, 05:21 AM
All my corporates and some regular domestics are on Due on Completion terms for which I allow 10% (of course this is added on when I quote them originally) and is paid via check or telebanking
The payment is due overnight or within 48 hrs after that if they haven't made the payment or left check in my letterbox they lose the discount
That 10% covers me if I need to go collect the payment or if the money doesn't go through

When you meet with new clients, how do you sell this concept? Do you say, I expect to be paid upon completion and if you do pay me then, I will give you 10% off your bill?

Is it difficult to get paid like this from corporations?

c4trash
02-03-2009, 06:40 AM
When you meet with new clients, how do you sell this concept? Do you say, I expect to be paid upon completion and if you do pay me then, I will give you 10% off your bill?

Is it difficult to get paid like this from corporations?
I do tell them when quoting that I expect to be paid on completion however with new customers I tend to over quote sometimes up to 25% above what i expect it to cost and then may negotiate the final price downwards when the job is completed ( This normally applies to cleanups) where I explain to the customer I wont know what the final price is because it depends finally on what work is done
In answer to your second question some of my corporates have a policy that if an invoice is below a certain sum it can be paid by the receptionist out of the company float

Steve
02-03-2009, 08:36 PM
In answer to your second question some of my corporates have a policy that if an invoice is below a certain sum it can be paid by the receptionist out of the company float

Ah very good point! Thank you

VPS Lawn Care
02-03-2009, 11:09 PM
I find all this very interesting. Why you ask?
well 1st off i am in buiss. to make money, not to work for less then i know the job is worth. With that said, the only discounts i offer are for annual contracts paid over the year for the season instead of pay as you go. But on the other hand i do have this to say, Perception is 90% of the yes factor from a potential customer, meaning say i have a job to re-mulch a flower bed, and i do my figures and come up with the price i would do it for that covers all my costs, say $150.00 then i add an additional 20%= $30.00
for a total of $180.00. Now you prsent your price to your customer and you will get 1 of 4 basic responses, 1) good for you , they say ok when can you start, 2) we will let you know, this tells you they think its to much, but hey mr/mrs customer i really want this job, if i took 10% off would we have a deal, remember you added 20% above the real quote you came up with, you can cut even more and still be good. 3 thanks but no thanks, use the rule for #2 4 can you do any better on the price? yes you can! This is called pack ,the percentage you deal with. All people want is to feel like they are getting a good deal.
Well thats my ramble for that subject

c4trash
02-04-2009, 02:50 AM
I find all this very interesting. Why you ask?
well 1st off i am in buiss. to make money, not to work for less then i know the job is worth. With that said, the only discounts i offer are for annual contracts paid over the year for the season instead of pay as you go. But on the other hand i do have this to say, Perception is 90% of the yes factor from a potential customer, meaning say i have a job to re-mulch a flower bed, and i do my figures and come up with the price i would do it for that covers all my costs, say $150.00 then i add an additional 20%= $30.00
for a total of $180.00. Now you prsent your price to your customer and you will get 1 of 4 basic responses, 1) good for you , they say ok when can you start, 2) we will let you know, this tells you they think its to much, but hey mr/mrs customer i really want this job, if i took 10% off would we have a deal, remember you added 20% above the real quote you came up with, you can cut even more and still be good. 3 thanks but no thanks, use the rule for #2 4 can you do any better on the price? yes you can! This is called pack ,the percentage you deal with. All people want is to feel like they are getting a good deal.
Well thats my ramble for that subject
LOL a comment like "but hey mr/mrs customer i really want this job, if i took 10% off would we have a deal," sounds real desperate
Normally I would say hey thats cool my price is valid for 7 days get some other quotes but make sure the price they are giving you is for ABCD ie weedeating,( Both borders and other areas you may think require it) Lawn (with Catcher) Grass removal from property and Blow and Cleanup and not for a rough cowboy job
Then say I will call you in 7days But then I remind them that the price may change if the lawn has grown in the meantime

Steve
02-04-2009, 07:20 AM
Perception is 90% of the yes factor from a potential customer, meaning say i have a job to re-mulch a flower bed, and i do my figures and come up with the price i would do it for that covers all my costs, say $150.00 then i add an additional 20%= $30.00
for a total of $180.00. Now you prsent your price to your customer and you will get 1 of 4 basic responses, 1) good for you , they say ok when can you start, 2) we will let you know, this tells you they think its to much, but hey mr/mrs customer i really want this job, if i took 10% off would we have a deal, remember you added 20% above the real quote you came up with, you can cut even more and still be good. 3 thanks but no thanks, use the rule for #2 4 can you do any better on the price? yes you can! This is called pack ,the percentage you deal with. All people want is to feel like they are getting a good deal.

Let me make sure I am following along with you here. When you say perception is 90% of the yes factor do you mean the customer's perception that they are getting a good deal?

What I really really like about this is it potentially maximizes your profits unless you find yourself getting too many #1 responses.

Have you ever kept track and seen what the percentage of the responses are? That could really help you fine tune your prices further.

What do you feel would be the ideal #1 % response, #2 % response, #3 or #4?

VPS Lawn Care
02-04-2009, 11:14 AM
Let me make sure I am following along with you here. When you say perception is 90% of the yes factor do you mean the customer's perception that they are getting a good deal?

What I really really like about this is it potentially maximizes your profits unless you find yourself getting too many #1 responses.

Have you ever kept track and seen what the percentage of the responses are? That could really help you fine tune your prices further.

What do you feel would be the ideal #1 % response, #2 % response, #3 or #4?
Steve
Yes the customers perception.
Response 1 is always great to hear, but that happens maybe 1 out of 5 times, normaly it is #2 or 4 which is fine with me that shows me they are interested in my service & I have the chance to make a higher return, my norm is aprox a 25% profit margin in myquite quote, then add the 20% on top , i usally get 10 to 15% 0f that to.
Most people looking for lawn care dont get bids, they just use the 1st one they feel can do the job and makes them feel like they are getting a deal for what they get in return.