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Getting customers to switch over to yearly contracts


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A place to talk about general business discussions.
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Old 07-07-2012, 04:35 PM
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Default Getting customers to switch over to yearly contracts

I have a question. How do you guys bill for a yearly contract? Do you figure up what your rate would be to mow a lawn then multiply that by the number of cuts you would do per season then divide that 12? Say I would mow a lawn for $60 and would mow that property 20 times over the cutting season. would you multiply $60 x 20 / 12 = $100 per month for 12 months? I live in south MS and i'm pretty much like everyone else with the drought conditions and have only cut 7 yards in the past 2 weeks. Now it has rained in the evenings for the past week and I should pick back up next week. This is my 1st season and I have 20 clients and would like to start moving them to a yearly contract next season. This is a side job for me as of now but I would like to see it replace my current 9-5 within the next 2 years. Any advice and direction would be helpful. I forgot to mention that most of my clients are bi weekly (I will not be able to move them to weekly as they're tight wads lol)
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Old 07-07-2012, 05:19 PM
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Yeah pretty much. A couple points though.

I would bill for 8 months instead of 12. To prevent some tight wad for stopping payments after your done mowing.

I would add a few extra cuts. If biweekly is 20 cuts, charge them for 22 cuts and tell them that you come 3 times a month during heavy growth.

Then I would add a fall clean up to the price. If you mow in late october there will be very little to clean up. Dividing a $300 clean up over 8 months might make it more affordable to some that would put it off.
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Old 07-07-2012, 07:23 PM
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I figured how much I ned to make for a year. then divide that by 8 (months), then divide that by 4.3 (weeks per month) then by 30 (hours per week) That is my hourly rate.

I contract for 8 months, then add for 4 months, I charge .6 per month.

Example:

This yard is 20 bucks a cut (weekly)
times 4.3
86 dollars a month for 8 months
then 50 dollars a month for 4 months. (this is because there is less grass growth in the winter)

My customers think thay are getting a real good deal, and love tha fact that I charges less for the winter.

I live near Tampa Florida so there is no worry about snow removal.

I do lawn cleanups as part of my winter service. With high speed lawn vacs, blowers etc this takes very little time. And as it is for lawn customers I charge less than if someone just called for the service.

That way I make all the money I have to make in the summer, then get some extra in the winter.
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Old 07-08-2012, 10:22 AM
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Not bad. Just remember no two customers are alike and it's all about the numbers.
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Old 07-08-2012, 02:15 PM
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Quote:
Originally Posted by Godslapper View Post
Not bad. Just remember no two customers are alike and it's all about the numbers.
True that. And The BIGGER the number (for me) the better
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Old 07-09-2012, 11:05 AM
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If you can show them they will be saving money by signing a contract and that they can still get out of it with X amount of days notice made to you, then it's a big win for the customer and a win for you too.
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