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General Business Discussions A place to talk about general business discussions.

How would you handle a situation?


General Business Discussions

A place to talk about general business discussions.
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  #1  
Old 06-13-2006, 11:10 PM
tiedeman
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I am curious as to how some of you would handle these particular situations:

1. A brand new customer is late paying on their first invoice, but it's an awesome property to do, and you would like to keep the account, but they are past due

2. You have to choose between working a huge commerical maintenance job that is secure for 5 years, vs. working residential work that is year after year

3. You are thinking about expanding into installation, more know that the maintenance side is more secure, yet less profit.

4. Fuel prices are increasing more and more and you promised that you would not increase prices on current contract customers, just new customers. But after reviewing the books from last month, your fuel bills were 50% higher than last year. What to do!?

5. You can keep on advertising, pick up new customers, do estimates, and sometimes do work that you might not want to do. Or you have the option of just keeping your current base of customers going into 2007, and not advertise at all, which in turn could save you approx 15% of your expense budget.
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  #2  
Old 06-14-2006, 02:05 AM
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Quote:
Originally Posted by [b
Quote[/b] ]1. A brand new customer is late paying on their first invoice, but it's an awesome property to do, and you would like to keep the account, but they are past due
That is a good question. I would tend to say stick with your normal company policy on this or you might get burned. However I could understand if you gave them a bit of a break because you want to service this property.

Quote:
Originally Posted by [b
Quote[/b] ]2. You have to choose between working a huge commerical maintenance job that is secure for 5 years, vs. working residential work that is year after year
When you say a job do you mean as an employee or do you mean your company would service them?

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Originally Posted by [b
Quote[/b] ]3. You are thinking about expanding into installation, more know that the maintenance side is more secure, yet less profit.
I think it's good to experiment and explore different avenues. You won't know for sure what will best work for you unless you try.

Quote:
Originally Posted by [b
Quote[/b] ]4. Fuel prices are increasing more and more and you promised that you would not increase prices on current contract customers, just new customers. But after reviewing the books from last month, your fuel bills were 50% higher than last year. What to do!?
If this is a make or break issue for your company, I would have to renegotiate the prices. You need to profit from your time.

Can you raise your prices for new customers in order to cover these expenses and still be competitive in your area?

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Originally Posted by [b
Quote[/b] ]5. You can keep on advertising, pick up new customers, do estimates, and sometimes do work that you might not want to do. Or you have the option of just keeping your current base of customers going into 2007, and not advertise at all, which in turn could save you approx 15% of your expense budget.
My view is to always push forwards. It's been my experience nothing stays stasis, things either are in a state of growth or decline.
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Old 06-14-2006, 12:48 PM
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good answers. Keep the answers guys.

In regards to question 2: It would be to still have you as a company maintain a huge commerical account (lawn maintenance, landscaping maintenance, etc) not an employee of the company.
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Old 06-14-2006, 04:03 PM
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1. I'd confront them, find out if everything is ok or if they didn't get the invoice and let them know it is due. I don't know how your contracts are, but mine is 10 days after due date I stop service and send notice, then it's to the court. Normally, a phone call resolves it for me.

2. If you mean get rid of all your other accounts and just maintain this one large property as in it will fill up a full week schedule. You have to think ahead of the 5 years, what will happen when it's up for bids and someone gets it? Then your starting all over again. I don't like to put all my eggs in one basket.

3. Again not having all eggs in one basket, do some of both. Have maybe 4 days of mowing and 1-2 days of landscaping. I know around here the market just wouldn't be able support a 100% landscape install company unless you have the number one recognized name in the area. The best split I'd like to come up with is 4 days maybe 4.5 days of mowing and then one day a week of landscaping.

4. I'm sure you've thought of every way possible to be more fuel effiecent. Right now I'm doing pretty good, of my gross income, fuel is taking up 13%, I've heard of some guys saying their fuel expense is nearly 30% of their gross income. I would look at your least profitable accounts, or ones that you really don't want and talk with them first, if you lose them, no biggie. You don't want to go to your best accounts and risk losing them. Right now everyone I added this year is based on higher fuel prices so I'm safe, ones from last year are 50/50. I have some that are priced high and will be safe with even higher fuel prices, but a few are boarderline and will be raised or cut if fuel goes up.

5. I would probably keep advertising. I however wouldn't do work I don't want to. What if you can add some very profitable accounts and allow yourself to get rid of your lesser profitable accounts? Or just set yourself up for more income? We're starting to see drought here in ohio, accounts that aren't fertilized are slowing down bad and it's getting me worried. I'm going to keep on advertising to try and pick more work up. 15% for >15% more in revenue is a good trade if it works.
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Old 06-14-2006, 08:01 PM
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Quote:
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Quote[/b] ]2. You have to choose between working a huge commerical maintenance job that is secure for 5 years, vs. working residential work that is year after year
Is there any reason you can't do both?
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Old 06-14-2006, 08:17 PM
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Well, lets say that commerical job will be 30-40 hrs of work a week. You can store all of your equipment on site, you never have to travel any place but that site for 5 years straight. The schedule is pretty much open just as long as the lawn is mowed every week, and the beds, shrubs, trees, lawn, etc are maintained in a good order. You are paid basically a flat sum of money each month for 8 months.
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Old 06-14-2006, 09:17 PM
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Could you hire an employee to do this?

Would you consider that?
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