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commercial vs residential


Lawn Maintenance / Lawn Renovation

A great way to talk about all things lawn care related. Grass, turf, shrubs, trees, aeration, fertilization, reseeding, hydro-seeding, mowing, grub control, chemicals and pesticides. Ask questions, give answers. Grow!
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  #1  
Old 03-03-2010, 10:05 AM
Floridajoe Floridajoe is offline
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Default commercial vs residential

Just wanted to bring up a conversation about commercial vs residential.
Do most of you find commercial to be a ego thing. Seems most will do whatever they can do to get commercial accounts. Around here that means loosing money. In my area there are sooo many companies going for the commercial at whatever cost. I find that most of the commercials around here go stricktly with the lowest bid. They are not concerned with anything about your service, or what may set you apart from the rest. Just the bottom dollar. Not saying I don't do commercial, I do have some very good commercial accounts. But in general they seem to be more of a pain than my residential customers.
It takes more residential to get to the dollar amount; but it seems I can make almost double per hour on residential than what the commercials go for. I will not loose money on ANY job, just to say I have commercial. I just usually tell them: "next season when the guy you hired has all broken down equipment and no money to replace it; call me I'll be here."
What does everyone else think? Does this seem to be the norm everywhere? Are all the new guys thinking they must undercut commercial pricing to make them feel like a legitimate company? WHY?
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  #2  
Old 03-03-2010, 10:46 AM
XtreemGreen XtreemGreen is offline
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In my area its mostly the big companies that do the commercial, so I dont know how cut throat it is.. But residential here is real bad...Prices are very low and I dont see how they survive..Im restarting my business this year and guess Im going to have to lower my price to compete..
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Old 03-03-2010, 11:13 AM
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I think you bring up an interesting point. I concentrate on residential, partially because i enjoy it more than I do commercial. Where I operate, there are a few companies, and they have all concentrated on commercial accounts to the point that the business owners asking for bids do exactly what you said .... take the lowest bid. I too have found that I can make more per hour looking after residential than commercial.

Personally, I feel more rewarded when the little old lady says she doesn't know what she would do without me, or offers cookies, pies or whatever they made as a gesture of thanks. Not to mention that they brag about the level of service I provide to their friends and neighbors. I pick up more accounts from refferals than any other single thing.

That being said I do have the odd commercial account, yet everyone of them is only because I look after their residential property as well. I am willing to sit back, take on all the residential I can handle and let the other guys fight it out for commercial territory.

Lloyd
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Old 03-03-2010, 12:23 PM
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Quote:
Not saying I don't do commercial, I do have some very good commercial accounts. But in general they seem to be more of a pain than my residential customers.
Hi Joe,

What's been your view as to why you do some commercial accounts? What have you found some of the benefits to be?
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Old 03-03-2010, 12:39 PM
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I stared out doing residential accounts, then I started getting couple of commercial accounts and then it took off from there. All I did for two years was Commercial accounts. Now I ave moved to submitting bids to the Local City's and County. This is where the money is, But you have to have the equipment and man power to keep up with the demand they put on you.
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Old 03-04-2010, 12:08 PM
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Quote:
Now I ave moved to submitting bids to the Local City's and County.
What kinds of work will you be performing in your government bids and how do you feel the amount they pay differs from commercial or residential jobs?
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Old 04-03-2010, 06:22 PM
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Default Lawn Prices

Hello,
I'm Been Thinking About This Guy For Two Weeks He's Charging 249+ Tax For 6000sq Feet Including House Is This Lowballing Or What Or Does He Go By Volume. He Also Is Doing Lawn Cleaning For 49.00? This Seems Cheap Or I'm Off My Rocker.now He Put Up His Price Up A Little To 269+tax
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Old 04-03-2010, 09:26 PM
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Quote:
Originally Posted by Floridajoe View Post
... Do most of you find commercial to be a ego thing. Seems most will do whatever they can do to get commercial accounts. Around here that means loosing money. ...
It's a very good point. Commercial usually takes the lowest cost that meets their minimum insurance requirement and they don't care if they have to replace a lawn care company every year. I do have one commercial account and its not a bad account but I'm not actively seeking more. If another falls into my hands then I'll take it.

The key to making money in this business is efficiency, not the type of accounts you have.
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Old 04-04-2010, 05:27 AM
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I personally tend to stay clear of commercial accounts, we have a few but very few. Being a small operation payment is critical and I know from experience in other companies they are slow to pay, I also know the mentality seems to be something for nothing.

One of my largest residential customers is also a property manager, he asked me to look at 20+ properties last year, before I even quoted because I have known him a long time, I asked what they were paying for each and he gave me the proposal, he wanted to switch as they were not happy with the service but I said to him Bruce for what you are paying, that is already less than I could do for the type of work they are doing. He said they didn't want to put a lot of money into the property so I simply passed, now his home is a different story, he forks out pretty big bucks to make it look really good.

Our city have a few really big lawn care companies, three come to mind and the gear they have is a very big investment. I have found a balance as I don't like to keep all my eggs in one basket meaning a variety of services, lawn mowing is at the bottom of the list simply due to profit per hour, we will still do it if the price is right however the other services we do is where the money is in my experience.
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Old 04-04-2010, 06:06 AM
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before I even quoted because I have known him a long time, I asked what they were paying for each and he gave me the proposal, he wanted to switch as they were not happy with the service but I said to him Bruce for what you are paying, that is already less than I could do for the type of work they are doing.
Being able to pass on such jobs seems to be so important. So often it seems there is this gut reaction where if there is a job available, you must get it at all costs. It doesn't matter if you are going to make or lose money on the job, its simply a question of you MUST get it.

Fighting that urge and using your brain to figure if it makes sense to take a job can be overwhelming and I bet many businesses that end up closing up shop, do so because they couldn't fight that urge.

Do you find this to be the case too?
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