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 > Business > General Business Discussions

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

Are pre-payments bad?


General Business Discussions

A place to talk about general business discussions.
Reply
 
Thread Tools Search this Thread
  #1  
Old 01-25-2012, 03:04 PM
TiedemanLLC TiedemanLLC is offline
Senior Member
 
Join Date: Dec 2011
Posts: 226
Rep Power: 3
TiedemanLLC is on a distinguished road
Default Are pre-payments bad?

Going over our 2011 season I noticed that 16% of our income was from services that were pre-paid. The funny thing is, the pre-payment of services was also our best marketing technique used in the 2011 season.

Now with us, and pre-payment we always give great discounts. Anywhere from 5% up to 25% (25% is when more than three years of service are pre-paid). But we are starting to wonder whether allowing clients to pre-pay is actually hurting us in the long run.

Are we just concentrating on pumping cash into the system NOW instead of looking at how much money we are losing down the road?

What are also the pros and cons of pre-payments?
Reply With Quote

Stop guess-timating. Learn how to estimate and make money! $$$
Mow Time Estimator Lawn Care Price Estimator Mulch and Topsoil Calculator Snow Plow Estimate Calculator


  #2  
Old 01-25-2012, 03:36 PM
dpld dpld is offline
new member
 
Join Date: Jan 2012
Location: nj
Posts: 885
Rep Power: 0
dpld is on a distinguished road
Default

Lawn care business tipsLawn Care Business Book
Quote:
Originally Posted by TiedemanLLC View Post
Going over our 2011 season I noticed that 16% of our income was from services that were pre-paid. The funny thing is, the pre-payment of services was also our best marketing technique used in the 2011 season.

Now with us, and pre-payment we always give great discounts. Anywhere from 5% up to 25% (25% is when more than three years of service are pre-paid). But we are starting to wonder whether allowing clients to pre-pay is actually hurting us in the long run.

Are we just concentrating on pumping cash into the system NOW instead of looking at how much money we are losing down the road?

What are also the pros and cons of pre-payments?
i used to do that when i had residential accounts but i would offer a 10% discount for monthly auto pay with a credit card and i would give a 20% for pre payment of the entire season.

25% is a little too high even if they paid for the whole season in advance.

but now i bill ahead instead of behind so i have eliminated any discounts like that.
Reply With Quote
  #3  
Old 01-25-2012, 05:24 PM
CHEESE2009's Avatar
CHEESE2009 CHEESE2009 is offline
Dr. Scott - Ruler of the Underworld
 
Join Date: Mar 2009
Location: Switzerland, Grindelwald
Age: 73
Posts: 4,475
Rep Power: 10
CHEESE2009 is on a distinguished road
Default

Getting your clients to pre-pay is awesome.

Getting your clients to pre-pay in order to eat your profits, sucks.


A discount of 25%, you're most likely paying the tax on their bill and more.
Reply With Quote
  #4  
Old 01-26-2012, 03:24 AM
USA Lawn Care USA Lawn Care is offline
Member
 
Join Date: Jan 2011
Posts: 62
Rep Power: 4
USA Lawn Care is on a distinguished road
Default

There is no reason to discount for pre-pay. No need to apologize to customers about your policy.

This is your business. Run it and bill how you choose. If a customer doesn't like it so be it. The only thing you need to explain is that 'this is the way that has worked best for our company so this is how we will continue to bill clients.' Your main goal is to stay in business. Cash flow is a key ingredient of that.

I can't tell my trash collector that I don't like pre paying. They would tell me to go find another trash collector then.

Again.....DON'T APOLOGIZE FOR PRE-PAY.
DON'T OFFER DISCOUNTS.
PAYMENT IS DUE BEFORE WE CUT YOUR GRASS.....PERIOD.
Reply With Quote
  #5  
Old 01-26-2012, 06:56 AM
mark123's Avatar
mark123 mark123 is offline
Senior Member
 
Join Date: Apr 2009
Location: Pennsyltucky
Posts: 1,402
Rep Power: 7
mark123 is on a distinguished road
Default

There is a difference between fast food and fine dining. You pre-pay for one.
Reply With Quote
  #6  
Old 01-26-2012, 08:53 AM
dpld dpld is offline
new member
 
Join Date: Jan 2012
Location: nj
Posts: 885
Rep Power: 0
dpld is on a distinguished road
Default

Quote:
Originally Posted by USA Lawn Care View Post
There is no reason to discount for pre-pay. No need to apologize to customers about your policy.

This is your business. Run it and bill how you choose. If a customer doesn't like it so be it. The only thing you need to explain is that 'this is the way that has worked best for our company so this is how we will continue to bill clients.' Your main goal is to stay in business. Cash flow is a key ingredient of that.

I can't tell my trash collector that I don't like pre paying. They would tell me to go find another trash collector then.

Again.....DON'T APOLOGIZE FOR PRE-PAY.
DON'T OFFER DISCOUNTS.
PAYMENT IS DUE BEFORE WE CUT YOUR GRASS.....PERIOD.
that is why i chose to bill ahead instead of behind and when the customer frets about it i tell them i am not bank of america financing homeowners dreams.
if you want to go with the finance plan i suggest you put it on your credit card or go borrow the money from your local bank and work it out with them.

and if the account is not up to date they get no service until it is.
Reply With Quote
  #7  
Old 01-26-2012, 09:53 AM
Hedgemaster Hedgemaster is offline
new member
 
Join Date: Jul 2010
Location: Pittsburgh, PA
Posts: 2,772
Rep Power: 0
Hedgemaster is on a distinguished road
Default

Currently my two options are "Pre-pay", or "at time of service".

I don't offer discounts, I offer options - one or the other.



My mother didn't offer incentives for me to eat my dinner when I was a kid, she gave me two choices: Eat what's in front of you, or go hungry.

Reply With Quote
  #8  
Old 01-26-2012, 10:14 AM
ringahding1's Avatar
ringahding1 ringahding1 is offline
Senior Member
 
Join Date: Mar 2010
Location: Stillwater, MN
Posts: 298
Rep Power: 5
ringahding1 is on a distinguished road
Default

Pre-pay is a good way to target the slow payers or potential non-payers before the growing season ends.

Pre-pay discount would only be offered by us to give the customer an option to capture last year's rates. Other than that I would not offer any other discounts for pre-pay. This is a good way to keep income rolling through the winter season, especially when spring start up $$ is needed.
__________________
08 F250 Ext Cab/04 Chevy 3500
05 F350/04 F350 Diesel/12 Ram 4500 Dump
4 -60 Toro Zmaster/Lesco 48
3 -8'2" Boss V-Plows
1- Hiniker 9'6" V-Plow
20' Enclosed trailer
18' Skid & 16' Open Trailer
2012 - S185 Bobcat


Reply With Quote
  #9  
Old 01-26-2012, 03:48 PM
Steve's Avatar
Steve Steve is online now
Administrator
 
Join Date: May 2003
Posts: 36,540
Rep Power: 10
Steve has disabled reputation
Default

Has anyone looked at the difference in cost between their monthly insurance payments and if they prepaid it for the year? What kind of discounts are you seeing? Could a similar discount % work for lawn care?

Also, is it best to keep the max time to 1 year? Does 3 year lock you into something where you might not want to be performing a certain service that far down the road?
__________________
- Subscribe to my Lawn Care Marketing Blog Feed and get daily tips sent to you. Free!
Download your Free trial of Gopher Lawn Care Software.
Reply With Quote
  #10  
Old 01-26-2012, 04:33 PM
TiedemanLLC TiedemanLLC is offline
Senior Member
 
Join Date: Dec 2011
Posts: 226
Rep Power: 3
TiedemanLLC is on a distinguished road
Default

Quote:
Originally Posted by Steve View Post
Has anyone looked at the difference in cost between their monthly insurance payments and if they prepaid it for the year? What kind of discounts are you seeing? Could a similar discount % work for lawn care?

Also, is it best to keep the max time to 1 year? Does 3 year lock you into something where you might not want to be performing a certain service that far down the road?
I was waiting for someone to finally ask this question, thank you. Even though you are getting 3 years of cash pumped into your system is that three years worth of cash actually good for the long haul. It may be a short term gain, but does it actually hurt you?
Reply With Quote
Reply

Bookmarks

Thread Tools Search this Thread
Search this Thread:

Advanced Search

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is On
Forum Jump

Similar Threads
Thread Thread Starter Forum Replies Last Post
Contracts and Payments Liberty Landscaping LLC General Business Discussions 3 04-01-2011 09:31 AM
Dealing with payments?!?!?! Fresh Cut General Talk 16 10-04-2009 10:22 PM
recurring payments All Aspects Landscaping General Business Discussions 14 03-14-2008 05:46 PM
How to make payments Gopher Software Support Archived Question & Answers - Read Only 5 07-06-2006 05:44 AM
Payments off of Statements Gopher Software Support Archived Question & Answers - Read Only 1 07-20-2005 05:43 PM

» Recent Threads
  RatingTitle, Username, & Date Last Post Replies Views
These are the days on...
ExtremeLawncareServices
03-22-2014 09:12 AM
Today 03:33 PM
by biglee
160 12,085
Lawn Care business...
crieg122
10-23-2014 01:23 PM
Today 03:27 PM
by biglee
17 777
Pavers
crieg122
10-28-2014 02:49 PM
Today 12:49 PM
by Steve
6 283
Client won't pay...
WesleySnips
Yesterday 02:53 PM
Today 12:00 PM
by Steve
6 205
Hi Steve From West...
Mr. Mow
10-21-2014 01:59 PM
Today 11:56 AM
by Steve
5 600
Got my first lawn job...
SGL1
06-11-2014 09:19 PM
Today 09:53 AM
by Max Wagner
30 2,552
Gie-review / What's new...
ExtremeLawncareServices
10-25-2014 09:19 AM
Today 09:30 AM
by ExtremeLawncareServices
7 497
Business Name
sanchez5
10-28-2014 11:55 PM
Today 05:51 AM
by ringahding1
10 324
"Price...
Mr. Mow
Yesterday 03:21 PM
Today 05:48 AM
by ringahding1
3 172
Help a brother...
tbtigers03
09-28-2014 11:41 AM
Today 05:41 AM
by ringahding1
15 1,971
sod job
SGlawncare
Yesterday 08:21 PM
Yesterday 08:21 PM
by SGlawncare
0 31
Difference between lawn...
sanchez5
10-29-2014 04:20 PM
Yesterday 02:08 PM
by Steve
2 205
My Newest Toy (B.P....
Dan Tanner
10-23-2014 05:50 PM
10-29-2014 12:26 PM
by Steve
6 555
West cost lawn prices
SGlawncare
10-09-2014 09:51 PM
10-28-2014 11:08 PM
by SGlawncare
4 918
Say Hello !!!
Steve
03-19-2007 11:18 AM
10-28-2014 02:51 PM
by Steve
1,193 341,169
Business Cards
crieg122
10-25-2014 12:03 PM
10-28-2014 02:37 PM
by crieg122
4 427
So how do you guys...
Mr. Mow
10-26-2014 07:55 AM
10-28-2014 04:56 AM
by Billy Goat
2 369
Pressure Washing Like a...
TNTurf
08-01-2014 11:47 PM
10-27-2014 10:36 PM
by SGlawncare
12 1,285
new to the forum
madmedic8575
10-24-2014 02:52 PM
10-27-2014 12:14 PM
by Steve
1 390
Dealing With Gas Can...
Mr. Mow
10-21-2014 01:41 PM
10-26-2014 10:59 AM
by stevef1201
13 752
Leaf removal
madmedic8575
10-24-2014 04:14 PM
10-26-2014 07:45 AM
by Mr. Mow
5 525
raking leaves ?
robert8509
10-22-2014 09:19 PM
10-25-2014 12:09 PM
by biglee
10 657
Leaf Box & Loader Set...
ringahding1
10-21-2014 06:20 AM
10-25-2014 11:46 AM
by crieg122
6 647
hey everyone
robert8509
10-22-2014 08:16 PM
10-24-2014 11:07 PM
by robert8509
7 547
12 Years in Business!
Chilehead
10-23-2014 08:07 AM
10-23-2014 11:08 PM
by Chilehead
2 468
Cheapskate Landlord...
Mr. Mow
10-20-2014 06:33 AM
10-23-2014 05:55 PM
by biglee
13 803
Hi from SoCal
Jmoney
10-23-2014 11:29 AM
10-23-2014 12:51 PM
by Steve
1 427
Workmans compensation...
CDLAWNCARE
10-15-2014 08:05 AM
10-23-2014 12:33 PM
by Steve
5 903
Pda
stevef1201
10-18-2014 02:05 PM
10-23-2014 06:12 AM
by ringahding1
4 730
Hello, from TEXAS
sanchez5
10-17-2014 09:56 PM
10-22-2014 01:27 PM
by Steve
6 792
Organic Lawn Care...
NHray
10-17-2014 06:05 PM
10-22-2014 01:23 PM
by Steve
3 755
first year update
cmdlawncare
08-12-2014 05:41 PM
10-22-2014 07:47 AM
by ringahding1
4 1,748
What parts do you carry...
Just for Cuts
10-17-2014 09:08 AM
10-21-2014 01:36 PM
by Mr. Mow
16 1,039
Jungle to Beautiful
stevef1201
10-17-2014 09:54 AM
10-21-2014 01:26 PM
by stevef1201
11 898
Sunny Beach Tennis...
SGL1
10-19-2014 11:24 PM
10-21-2014 01:04 PM
by SGL1
4 628
Have you ever had to...
SouthernRootsLawnCare
07-26-2014 02:41 PM
10-20-2014 08:34 PM
by biglee
10 2,226
Look out Bob Villa -...
Mr Dave
09-30-2014 10:06 AM
10-20-2014 05:42 PM
by SGL1
7 1,724
how to fi d commercial...
mchampion319
10-19-2014 09:50 PM
10-20-2014 04:41 PM
by Steve
1 597
Hello From Tennessee
mrmann901
10-17-2014 10:02 PM
10-20-2014 04:24 PM
by Steve
1 666
questions on order to...
jack2048
10-13-2014 11:15 AM
10-20-2014 03:27 PM
by Mr. Mow
15 1,124
This sucks...
Matther777
09-18-2014 04:56 PM
10-20-2014 02:14 PM
by Steve
14 2,662
Cement mixer
KevinsLawns
10-15-2014 08:03 PM
10-20-2014 02:11 PM
by Steve
7 849
Hello ! New guy Rob here
RWorthley1
10-17-2014 04:05 PM
10-20-2014 02:09 PM
by Steve
1 699
Snow Blowing
gwilson98
10-12-2014 02:21 PM
10-17-2014 02:51 PM
by Steve
6 1,045
Spreading Weeds?
WesleySnips
07-27-2014 09:46 PM
10-17-2014 07:49 AM
by SGL1
6 1,345
Grasswhoopins.com Anyone...
GRASS WHOOPINS
06-21-2011 11:38 PM
10-16-2014 01:30 PM
by ExtremeLawncareServices
42 9,750
I Want to buy old...
ExtremeLawncareServices
10-10-2014 10:04 PM
10-15-2014 09:12 PM
by ExtremeLawncareServices
6 1,056
Do you find weed eating...
chuck2s
10-15-2014 02:10 PM
10-15-2014 02:10 PM
by chuck2s
0 780
Incorporating &...
WesleySnips
10-01-2014 09:39 PM
10-15-2014 01:37 PM
by kslawn
20 1,920
Falling into business
stellarmowing
09-28-2014 04:35 PM
10-15-2014 05:57 AM
by ringahding1
8 1,913
» Popular Tags
4wd aerocore apartment bid apartment lawn care estimate applying article marketing bid blades bush care charge collections subcontractor decorating deliquentaccounts demonstration ditches employee problems estimate exmark ferris four wheel drive gopherhaul gravely growing a lawn care business honda how much to charge how to installation introduction landscape services lawn lawn care lawn care busines plan lawn care business lawn care business seo lawn care business show lawn care business website lawn care business website seo lawn care website marketing monthly mulch mulch price new mower ordinance patio install podcast pto redmax reo running a business scag search engine optimization seo snow snow plowing starting a business steep lawns steve stihl theft of services top dresser toro toro grand stand trailer mate pro tree truck new used landscape turfgrass consulting walker won't return
Powered by vBadvanced CMPS v3.1.0

All times are GMT -5. The time now is 08:33 PM.


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

All times are GMT -5. The time now is 08:33 PM.

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