Lawn Care Business Forum Lawn Care Business Book Lawn Care Business Blog Lawn Care Software
Home Forum Contract & Flyer Templates Blog Software Videos Podcast Calculators / Estimators Store Mower Review Design It Yourself Lawn Business School

Go Back   GopherHaul Landscaping & Lawn Care Business Marketing Forum

» Welcome to the Gopher Lawn Care Business Forum
GopherHaul Landscaping & Lawn Care Business Marketing Forum

GopherHaul Landscaping & Lawn Care Business Marketing Forum (http://www.gopherforum.com/forum-index.php)
-   Starting a lawn care business. (http://www.gopherforum.com/forumdisplay.php?f=32)
-   -   Prepaid Accounts (http://www.gopherforum.com/showthread.php?t=18055)

Billy Goat 02-06-2013 05:15 AM

Prepaid Accounts
 
This post is a spin-off from the contract/nocontract post. I can see having a contract for residential accounts that customers are on a payment plan. I would hate to mow a lawn each week and not get paid at the end of the month. They give you the song and dance and tell you the check is in the mail. You could end up mowing their lawn for 6 weeks and not getting paid. With no contract, you have no legal recource.

This post is more geared toward prepaid accounts (new customers). Accounts that are one time service or more so overgrown lawns. You have a feeling that you may get screwed and not get paid after the work is done. Most service companies bill you after the work is done so how do you suggest prepayment without the customer thinking you are some kind of scammer?

LawnBoy0311 02-06-2013 06:30 AM

I was actually going to start a thread like this because I'm curious too. I think I shot myself in the foot this year.

Before I forget-the answer to your question-> with or without a contract, the customer can still "not pay you". You can add all the mumbo jumbo in there you want, but plain and simple, they pay if they want. Same thing with every other service out there...cell phones, trash, electric, cable...you can even call your credit card company right now and tell them you won't be paying the rest of your debt. In return they take you to court and you settle to pay them half of what you owe, and get your credit score all jacked up.

Last year I billed out at the end of the month. For the most part, everyone paid on time. I had a few who needed reminders every month, and I had 2 that didn't pay. The 2 that didn't pay I stopped service on, and tried numerous times to collect. I sent emails, and called, but got the run-a-round from them. It got to the point where I had to mail out letters to each of them by certified mail. The letters were my last resort (they were by no means "nice"), threatening them with court and police reports. They both paid.

A few weeks ago I sent Thank You cards out to all my customers for last year. In the cards I put a notice of billing changes for this year. I stated everything will be paid a month in advance and any missed payments will be charged for every week missed until they resume service. Basically, if they don't pay, I don't mow. I plan to tell every new customer the reason I do it is so I can keep costs at a reasonable rate, and thats not too much to ask considering other's ask for 6 months up front before service starts. This is where I think I shot myself in the foot....out of my 20 customers, I dropped 2 and only 2 have written back saying they are fine with the changes.

The main reason for the change was because I got tired of chasing money and having people pay when they felt like it. I work hard enough taking care of their property, and don't need another job of collecting my money from them.

How is everyone else billing? Whats the major problems you face? I realize I may have lost a bunch of my customers, so it looks like I'll be hitting the streets again. At least my headache and my worries can be focused somewhere else.

Sprinkler Buddy 02-06-2013 07:05 AM

If your having doubts if a customer will pay or not, just tell them you have a pay in advance policy on one time cuts and clean ups.

I would only do this when when you have that gut feeling that you should. This still doesn't mean the check will clear when cashed though.

dpld 02-06-2013 07:25 AM

when i did 100% residential i had about 75% pre-paid accounts and it worked out excellent.
but the catch is all of the homes i serviced where people who were making high 6 digits and low 7 digit incomes.
plus, you need to give them something in return like a discount and i offered 20% off for pre-payment of the entire year and 10% off auto-pay with the credit card on file.
the people that have the money to throw away will gladly write a check for the full amount if it can save them money but the everyday person who is just getting by will not be as receptive because the savings will not out weigh the hardship of spending money that they don't have to spend just yet, like october's services in april.

as far as the people who are slow pay, there is no way they would go with a pre pay. they are slow pay because they are broke @zzes spending more then they make.
the only choice is for people like that is bill ahead instead of behind and discontinue service until payment is made or just kick them to the curb all together.

i know it is easier said then done and i have done all of the above and it works. but as a business you need to set the standards from the start and adhere to them even if it means a little pain in your pocket because once someone gets away with it they will keep doing it.

you always have to remember the reasons as to why you went into business, to make money, money and money and i almost forgot to mention, make money.
as soon as a customer starts making it hard for you to make money or makes it difficult to get your money when you want it then you have no use for that customer.
as long as the money is there you will be reliable, courteous, professional and when it's not you just go away and disappear.

the only business that will continue to deal with a deadbeat is a bank because the deadbeat owes them money and they have no choice but any other business will cut and run when they get paid before the clown can owe them again.

stevef1201 02-06-2013 07:38 AM

I have a policy in which I send out billing on the 15th of the month for the following month. If not paid by the 15th of that month service is continued until the end of the month with a percentage for late payment charged each week. If not paid by the end of the month no more service. I have dropped 2 customers this year, (low paying an always late) an pick up 3 (yes all of them in January) I also raised my rates this year, and only had one (late payer) say they don't want service this year. Last year I gave a monthly price to a guy and he pulled out his check book and wrote a check for the entire amount!!!! 2K. That was great but I had to bank it, and then monthly move the money from savings to business( I know me I would have spent it on something stupid)

LawnBoy0311 02-06-2013 07:45 AM

I think after reading the posts, I'm sticking to my guns on paying in advance. The headache was just not worth it. I do like the idea of giving a discount if paid in advance, maybe 10% off the first half of the mowing season, then another 10% off the back half of the mowing season????


Thanks for the ideas. Keep them coming!

Billy Goat 02-06-2013 08:12 AM

Maybe compare it to someone renting a apartment or house. Depends on the customers payment schedule. Look at the prepayment as a deposit. So if you agree on a monthly payment plan the customer has to pay for first month upfront. If the customers decides to terminate the service and the customer is paid up to date, they will get their deposit back.

dpld 02-06-2013 08:14 AM

Quote:

Originally Posted by LawnBoy0311 (Post 121619)
I think after reading the posts, I'm sticking to my guns on paying in advance. The headache was just not worth it. I do like the idea of giving a discount if paid in advance, maybe 10% off the first half of the mowing season, then another 10% off the back half of the mowing season????


Thanks for the ideas. Keep them coming!


the only thing i will add to give some more perspective is that when i did the residential homes i was servicing 100 homes at a average of 4k per year and when 75 of them pay you in febuary and march before you have done i thing and you have 300k sitting in your account the 20% discount you gave pails into comparison what you save by having the money in hand ahead of time.

for example, those 75 homes all got a average of 10 yards of mulch each year and that was part of the pre-payment.
at the time if i drove into my supplier it would be about 18.00 per cubic yard but i would pre pay him in march for 750 cubic yards and he was giving it to me for 13.00 per yard.

all 100 homes had fert and weed control as well as plant healthcare programs for their trees and shrubs and i would early order and pre-pay all my chemicals and fert for the entire year and i would get a additional 35 to 40% savings from that.
just those discounts alone offset the discount that i gave and actually increased my profit.
the first year i had everything 100% in place and all the checks came rolling in i was able to see first hand the power of cash when i walked into my local dealer and told him i needed 2 new riders and 3 back packs and what is your best price because i am paying cash.
the guys eyes popped out of his head and he did not know what to do but he gave me one of the best deals i ever got.

the bottom line is when ever you discount anything you have to have something else to offset or neutralize it and as you grow and build up a large customer base and you implement these ideas you have to have them set up to where everything works hand and hand.

if you plan on just giving out a discount to get paid earlier and then go about business as usual then yes it is a waste of time and money but if you put a master plan together it will make your life easier and more profitable.

LawnBoy0311 02-06-2013 08:36 AM

Quote:

Originally Posted by dpld (Post 121623)
the only thing i will add to give some more perspective is that when i did the residential homes i was servicing 100 homes at a average of 4k per year and when 75 of them pay you in febuary and march before you have done i thing and you have 300k sitting in your account the 20% discount you gave pails into comparison what you save by having the money in hand ahead of time.

for example, those 75 homes all got a average of 10 yards of mulch each year and that was part of the pre-payment.
at the time if i drove into my supplier it would be about 18.00 per cubic yard but i would pre pay him in march for 750 cubic yards and he was giving it to me for 13.00 per yard.

all 100 homes had fert and weed control as well as plant healthcare programs for their trees and shrubs and i would early order and pre-pay all my chemicals and fert for the entire year and i would get a additional 35 to 40% savings from that.
just those discounts alone offset the discount that i gave and actually increased my profit.
the first year i had everything 100% in place and all the checks came rolling in i was able to see first hand the power of cash when i walked into my local dealer and told him i needed 2 new riders and 3 back packs and what is your best price because i am paying cash.
the guys eyes popped out of his head and he did not know what to do but he gave me one of the best deals i ever got.

the bottom line is when ever you discount anything you have to have something else to offset or neutralize it and as you grow and build up a large customer base and you implement these ideas you have to have them set up to where everything works hand and hand.

if you plan on just giving out a discount to get paid earlier and then go about business as usual then yes it is a waste of time and money but if you put a master plan together it will make your life easier and more profitable.

That makes a lot more sense. The problem is getting them to prepay! I'm excited about this year though, I'm confident I can sell too.

Some say they charge by the cut. I don't see how this could even be possible. It seems like you'd waste more time piddle paddling around waiting for payment. Does anyone do this?

Mayor of Mow Town 02-06-2013 05:24 PM

I think it's valuable to look at what other industries are doing, and what your customers' experience of pre-paying is.

For example, many of your customers have probably bought something on ebay or another online store. That's pre-paying.

Do they pay their insurance or mobile phone plan as a lump sum at the start of the month or year? That's pre-paying.

My point is, your customers probably already pay upfront for products and services, so there's no reason why this couldn't be sustainable for a lawn care business.

Perhaps you could offer something like $30 if paid upfront, or $35 for weekly or monthly billing (adjust the figures & timeframes as it suits). I'd steer away from calling it a "discount" for pre-paying, but think about it as a "surcharge" for weekly or monthly billing. Make it the way you do business.

In my corporate days, I worked for an insurance company that only accepted upfront payments, and only via credit card or direct debit. No storefronts. No cheques. A tiny amount of potential customers decided it wasn't for them, but the trade-off was zero time wasted on debt collection.

Remember, if these are one-off jobs it is quite possibly a small cost and minimal risk to the customer to pay upfront.


All times are GMT -5. The time now is 10:51 AM.

Powered by vBulletin® Version 3.7.1
Copyright ©2000 - 2014, Jelsoft Enterprises Ltd.
(C) 2011 Riggs Publications - Terms of use & Privacy Policy

» Recent Threads
  RatingTitle, Username, & Date Last Post Replies Views
30 Inch Push Mowers Pros...
Billy Goat
06-27-2013 08:07 PM
Today 09:04 AM
by CLB454
23 6,310
Kohler command carb...
ExtremeLawncareServices
Yesterday 03:09 PM
Today 04:15 AM
by stevef1201
3 130
Not sure, but anyone do...
SnowRemoval2k14
Today 12:10 AM
Today 12:10 AM
by SnowRemoval2k14
0 62
2014 Gie-expo
ExtremeLawncareServices
08-19-2014 11:22 PM
Yesterday 09:23 PM
by ExtremeLawncareServices
3 894
Trying something new,...
ExtremeLawncareServices
Yesterday 09:07 PM
Yesterday 09:07 PM
by ExtremeLawncareServices
0 81
Tribulations of working...
stevef1201
09-13-2014 08:37 AM
Yesterday 10:10 AM
by stevef1201
8 569
Mulching beds
Bradcook21
Yesterday 07:43 AM
Yesterday 10:03 AM
by stevef1201
2 156
This sucks...
Matther777
09-18-2014 04:56 PM
09-20-2014 07:19 PM
by ExtremeLawncareServices
9 469
These are the days on...
ExtremeLawncareServices
03-22-2014 09:12 AM
09-20-2014 05:39 PM
by ExtremeLawncareServices
120 8,396
Replacing a Shindi T-27
Dan Tanner
09-13-2014 12:59 PM
09-20-2014 03:16 PM
by kslawn
2 576
Scag turf tiger hydrolic...
ExtremeLawncareServices
09-04-2014 10:55 PM
09-19-2014 05:59 PM
by ExtremeLawncareServices
11 933
Mowing 7 acres
avetslawncare
08-31-2014 04:24 PM
09-19-2014 03:29 PM
by acrajchel
6 1,104
snowplowing
jshak40
09-01-2014 07:20 AM
09-19-2014 11:49 AM
by Steve
23 1,492
Looking for feed back on...
ExtremeLawncareServices
09-17-2014 08:38 AM
09-19-2014 08:17 AM
by ExtremeLawncareServices
9 504
Lowballers scrubs &...
Darksteel
01-13-2014 07:35 AM
09-18-2014 06:32 PM
by Northwoods Outdoors
58 6,897
Hello from upstate NY!
A&MLawn&Snow
09-18-2014 11:19 AM
09-18-2014 04:10 PM
by Sprinkler Buddy
2 357
Price to apply fertilizer
SS.Lawncare
09-15-2014 11:10 AM
09-18-2014 01:16 PM
by Steve
9 618
Trailer tires
J.A.S.LawnService
09-01-2014 10:17 AM
09-17-2014 09:57 PM
by curts lawn care
4 1,020
new to the forum
SGlawncare
09-16-2014 11:20 PM
09-17-2014 08:29 PM
by curts lawn care
3 436
Help With Snow Blowing...
Robertf31
09-13-2014 10:55 PM
09-17-2014 12:34 PM
by Steve
11 792
Non-Stop Summer?
SouthallMowing
09-14-2014 10:51 PM
09-17-2014 10:48 AM
by stevef1201
6 574
Poll - net income
Dan5082
11-15-2010 08:08 PM
09-16-2014 04:44 PM
by jrs.landscaping
12 3,309
Getting lowballed!
PineHillLawn
06-27-2012 07:23 AM
09-16-2014 01:25 PM
by jrs.landscaping
24 5,008
Compare this summer to...
Steve
09-03-2014 12:52 PM
09-16-2014 11:20 AM
by Hanks Lawn Care Services
15 1,224
thinking about throwing...
veteranslawncaresystems
09-09-2014 10:31 PM
09-15-2014 03:41 PM
by Steve
12 902
Hello
Robertf31
09-12-2014 10:34 PM
09-15-2014 03:17 PM
by Steve
2 488
Newbie......Again
Jibber
09-13-2014 12:17 PM
09-15-2014 02:54 PM
by Sprinkler Buddy
2 588
need help with starter...
GoGreenerKS
09-12-2014 04:23 PM
09-15-2014 02:25 PM
by Steve
3 509
Brake job!
kslawn
08-30-2014 07:49 AM
09-15-2014 02:16 PM
by Steve
12 1,210
Hello
jawnebgoode
08-28-2014 08:37 PM
09-15-2014 02:15 PM
by Steve
3 979
Employee uniforms
Gerardo_Landscape
01-21-2014 11:11 PM
09-15-2014 02:12 PM
by Steve
5 1,110
Greetings from the north
Northwoods Outdoors
09-13-2014 08:55 AM
09-15-2014 02:07 PM
by Steve
1 474
darleneh
darleneh
09-15-2014 12:33 PM
09-15-2014 02:07 PM
by Sprinkler Buddy
1 472
My 1st bid
WesleySnips
06-11-2014 03:13 PM
09-15-2014 02:05 PM
by Steve
29 1,895
New Aerator
Chaz
09-09-2014 11:43 PM
09-15-2014 01:50 PM
by Steve
9 734
Yearly contract Pricing
jrob0691
08-21-2014 08:57 AM
09-15-2014 01:23 PM
by stevef1201
8 1,379
getting ready to start
calebmoss
05-23-2011 09:35 PM
09-11-2014 12:21 PM
by Steve
34 11,381
Stihl pull cord replace
SGL1
09-03-2014 09:22 PM
09-10-2014 12:25 PM
by Steve
9 906
Softball field
kslawn
08-15-2014 09:28 AM
09-10-2014 12:16 PM
by Steve
18 1,650
Lawn Route Templates
Landscaper1165
08-30-2014 01:52 PM
09-09-2014 08:05 PM
by Landscaper1165
4 1,137
New truck and trailer...
Johnny Rocket
05-14-2012 03:41 PM
09-09-2014 07:23 PM
by Matther777
18 6,721
What gets you bad press?
Steve
09-09-2014 11:48 AM
09-09-2014 07:21 PM
by Matther777
2 602
Signs on your snow plow?
Steve
01-15-2007 01:07 AM
09-09-2014 11:42 AM
by Steve
19 6,349
Exmark Lazer Z S-Series...
BLC7
08-22-2014 10:18 AM
09-08-2014 08:08 PM
by avetslawncare
12 1,416
New to the business
flamingyouth87
09-05-2014 11:52 AM
09-08-2014 11:55 AM
by Steve
3 816
Hello from Ohio
kurtwin
08-28-2014 05:06 PM
09-08-2014 11:51 AM
by Steve
7 1,106
Facebook
element009
03-23-2011 08:36 AM
09-07-2014 07:35 AM
by avetslawncare
24 7,887
Help pricing cut down 7...
Bradcook21
08-26-2014 11:17 PM
09-06-2014 02:09 PM
by Bradcook21
8 1,198
billing matters
sbuchanan8154
09-05-2014 09:56 AM
09-05-2014 03:00 PM
by Steve
3 794
Thoughts
googus
09-05-2014 07:28 AM
09-05-2014 02:23 PM
by Steve
2 733
Read more about these lawn care business marketing categories.
General Business:
GopherHaul, Podcast
How to Estimate - Services To Offer:
Aeration, Apartment / Condo, bed edging, Color Change Plantings, Dethatching, Edging, Fall Leaf Cleanups, Foreclosed Homes, Gutter Cleaning, Hardscaping, Hedge Trimming, Home Safety Inspection, Irrigation, Landscape Project, Lawn Mower Repair, Mowing, Mulch Jobs, Outdoor decoration, Parking Lot Cleanups, Pet Waste Removal, Pressure Washing, Property Management, Snow plowing, Stump Grinding, Tree Removal
How to Estimate Jobs:
Lawn Care Business:
Barter, Bikini Lawn Care, Business Failure, Business loan, Business Plan, Debt, Debt Collection, Estimate or Proposal Form, Franchise, Fuel surcharge, How to sell, Insurance, Job Tracking, Lawn Care Contract, Lawn Care Customer Survey, Lawn Care Uniform, Lawn Care Videos, Operational Costs, Overhead Costs, Prepay, Pricing, Start up, Tiger Time Lawn Care,
Lawn Care Business Books:
Lawn Care Customers:
Buying customers, Commercial Customers, Customer Retention, How to get, Residential Customers
Lawn Care Employees:
1 Man Lawn Crew, Bonus Pay, training, Your First Employee
lawn care equipment:
bed edger, Lawn Care Truck, Leaf Sweeper, Mower, New Arrival, Trailer, UltraVac
Lawn Care Marketing:
Billboard, Brochure, Business Card, Community Projects To Promote Your Business, Coupons, Cross Promotion / Synergy, Direct Mail, Door hanger, door to door, Free Giveaway Contest, Free Lawn Care Flyer Template, Gift or Discount Cards, home show, Internet, Lawn Care Business Sales Letter, Lawn Care Logo, Lawn Care Marketing, Lawn Care Truck & Trailer Signs, Lawn Care Website, Lawn Signs, Magazine Ad, Magnets, Mailing list, Marketing on Craigslist.com, Newspaper Ads, Parade, Postcards, publicity stunt, Referrals, Review My Lawn Care Marketing Material, t-shirt, Welcoming Kit, Word Of Mouth
Seasonal Promotion Ideas:
4th of July, Armed Forces Day, Christmas, Election Day, Fall, Halloween, Memorial Day, Spring, Summer, Valentine's Day, Veteran's Day, Winter:
Software:
Estimation Software, Landscaper Software, Landscaping Business Software, Landscaping Estimate Software, Landscaping Software, Lawn Care Business Software, Lawn Care Estimating Software, Lawn Care Software, Mowing Software
Uncategorized:
Video:
Website:
Search Engine Optimization
» Lawn Care Business Discussion Categories
Powered by vBadvanced CMPS v3.1.0

All times are GMT -5. The time now is 10:51 AM.


(C) 2011 Riggs Publications - Terms of use & Privacy Policy

All times are GMT -5. The time now is 10:51 AM.

(C) 2011 Riggs Publications - Terms of use & Privacy Policy