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  • Pricing for Annual Contracts

    I have a dilemma that I'm trying to work out before the season starts. I have a annual client that I charge 75.00 Bi-weekly from Apr - Nov plus on fall cleanup she pays an extra 50.00 which totals 125.00 for that visit. From Dec - Mar I charge her 50.00 Bi-Weekly which includes the winterization, aeration and preemergent application. The winter fertilizer cost 40.00 and the preemergent cost 40.00 my question is should I add the 40.00 to the 50.00 Bi - Weekly service to make a profit or leave the price as is. I would like some input so when the season starts I will have a price plan in place. It just seems like I'm paying for the chemicals and losing profit. Please help! Anyone out there

  • #2
    I have a dilemma that I'm trying to work out before the season starts. I have a annual client that I charge 75.00 Bi-weekly from Apr - Nov plus on fall cleanup she pays an extra 50.00 which totals 125.00 for that visit. From Dec - Mar I charge her 50.00 Bi-Weekly which includes the winterization, aeration and preemergent application. The winter fertilizer cost 40.00 and the preemergent cost 40.00 my question is should I add the 40.00 to the 50.00 Bi - Weekly service to make a profit or leave the price as is. I would like some input so when the season starts I will have a price plan in place. It just seems like I'm paying for the chemicals and losing profit. Please help! Anyone out there
    Well that is money straight out of your pocket. $40.00 for the fertilizer and $40.00 for the preemergent = $80.00 plus the aeration labor and the labor for spreading the materials. Add in what your time is worth and you can see exactly how much you are actually loosing.
    What you can do is add all of your services together for the whole year and all of your material used for the property then divide it by twelve. Present this lower monthly payment to the customer and see where it goes. Good luck!
    sigpic
    www.bnclawncare.com

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    • #3
      From Dec - Mar I charge her 50.00 Bi-Weekly which includes the winterization, aeration and preemergent application. The winter fertilizer cost 40.00 and the preemergent cost 40.00 my question is should I add the 40.00 to the 50.00 Bi - Weekly service to make a profit or leave the price as is.
      Dec = $50
      Jan = $50
      Feb = $50
      Mar = $50
      _________
      Total $200
      -
      Fert $40
      PreEme $40
      __________
      Total = $120

      How many times are you visiting that location over the course of those 4 months?
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      • #4
        Pricing for Annual Contracts

        HI Steve, I took a fellow North Carolinians' advice and totaled up all services for the year and came up with a price of 72.08 per visit. I also experimented with the thought that some clients want to pay less in the winter so what I did was for eight months service it would cost 1250.00/8= 156.25/2=78.12per visit and for the next four months it would cost 480.00/4=120/2=60.00 per visit

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        • #5
          Total = $120

          How many times are you visiting that location over the course of those 4 months?
          Well when you offer these winter services, how many times are you visiting the customer during that period? How many man hours are you spending there then?
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          • #6
            I have a dilemma that I'm trying to work out before the season starts. I have a annual client that I charge 75.00 Bi-weekly from Apr - Nov plus on fall cleanup she pays an extra 50.00 which totals 125.00 for that visit. From Dec - Mar I charge her 50.00 Bi-Weekly which includes the winterization, aeration and preemergent application. The winter fertilizer cost 40.00 and the preemergent cost 40.00 my question is should I add the 40.00 to the 50.00 Bi - Weekly service to make a profit or leave the price as is. I would like some input so when the season starts I will have a price plan in place. It just seems like I'm paying for the chemicals and losing profit. Please help! Anyone out there
            April= $150.00
            May= $150.00
            June= $150.00
            July= $150.00
            Aug. $150.00
            Sept.= $150.00 (This month or next should be when you seed, so there is only one service + aeration) So really the aeration is not free.
            Oct.= $150.00
            Nov.= $200.00
            Dec.= $100.00
            Jan. $100.00
            Feb.= $100.00
            Mar.= $100.00
            Fertilizer= $40.00
            Pre-emergent $40.00

            Total= $1730 / 12= $144.17 a month.
            So basically $145.00 a month for 12 months.

            For 8 months. the customer is really paying less. Pitch to them like this. Make the sale.

            How long does it take you to service the property? And please correct me if I did my math wrong.
            Last edited by bnclawncare; 02-11-2010, 09:23 PM.
            sigpic
            www.bnclawncare.com

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            • #7
              Low balled again

              Hi Steve, When the leaves fall I spend approxiamately 1hr . From Dec - Mar I spend approxiamately 30-45 mins. I must add that this is my first year doing business full time. I quit my previous employer in April to run my business full time. I had an employee with me for the summer months, but he has since left for other employment because I couldn't give him work year round. This is why my focus is geared toward annual contracts. The yard in question is serviced in the winter months by myself only.

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              • #8
                Ok then so for the Winter months, you charge $120 and spend maybe two hours?

                What about the winter fertilizer application time and the March pre-emergent time?

                My point of all this is to make sure each season and each month is covering your time and expenses.

                It's very easy to gloss over the actual time and money you are spending in the winter months and wrap that all into an annual contract, but it is very easy when you do that to lower your profit margins and end up hurting your business. This is why the costs and time need to be looked at over the entire year.
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                • #9
                  Low balled again

                  Hi Steve, I have the winterization and preemergent all figured into the price. Before I was charging 100.00 during the winter months but with the new calculations I can charge 144.17 a month

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                  • #10
                    Hi Steve, I have the winterization and preemergent all figured into the price. Before I was charging 100.00 during the winter months but with the new calculations I can charge 144.17 a month
                    You customer may think that you are going up on them in the winter months, when actually your not. You have to explain to them that 7 months out of the year they pay you $150.00 and 1 month they pay you $200.00. Let them know that you are just spreading the payments out equally so that 8 months out of the year their payment is actually lower.
                    They may not go for it, so be prepared to leave it like it is.
                    sigpic
                    www.bnclawncare.com

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