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: 4
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 CHEESE2009 is offline
Dr. Scott - Ruler of the Underworld
 
Join Date: Mar 2009
Location: Switzerland, Grindelwald
Age: 74
Posts: 4,475
Rep Power: 0
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: 5
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: 8
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: 316
Rep Power: 6
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 offline
Administrator
 
Join Date: May 2003
Posts: 37,572
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: 4
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
best way to.....
Wolf4dk
Yesterday 11:35 AM
Today 06:45 AM
by Chilehead
4 65
John Deere 667a
acrajchel
08-30-2015 10:00 AM
Yesterday 07:45 PM
by Just for Cuts
5 119
SCAG Tiger Cat DECK...
rower30
08-24-2013 10:07 AM
Yesterday 07:44 PM
by Just for Cuts
14 4,944
Sample commercial bid
burtle
Yesterday 06:02 PM
Yesterday 06:02 PM
by burtle
0 40
Your 2015 summer review.
Steve
09-01-2015 11:01 AM
Yesterday 05:58 PM
by Chilehead
3 116
Dane Scag
Steve
08-28-2015 12:29 PM
08-28-2015 12:29 PM
by Steve
0 96
24 and 50 acre cemetery...
grassmasterswilson
08-18-2015 10:09 AM
08-26-2015 02:42 PM
by Steve
13 628
Rookie business question...
WarriorLandscapingCAN
08-05-2015 05:20 PM
08-26-2015 02:33 PM
by Steve
3 429
How to clean an old...
rmccutchan
08-16-2015 05:23 PM
08-26-2015 02:31 PM
by Steve
9 449
how to make customers...
Bradcook21
05-27-2015 05:04 PM
08-26-2015 12:25 PM
by kslawn
19 3,794
Needing a website built
burtle
06-17-2015 09:02 AM
08-25-2015 11:31 AM
by acrajchel
9 2,502
Big mowing job
Bradcook21
07-30-2015 03:57 PM
08-25-2015 11:23 AM
by acrajchel
17 1,030
ZTR Review
Shark1611
05-31-2012 10:42 PM
08-25-2015 11:16 AM
by acrajchel
8 3,792
Hi Everyone
mmays29
08-25-2015 08:16 AM
08-25-2015 11:15 AM
by Steve
3 137
Should I buy this Exmark...
googus
07-03-2015 09:22 AM
08-25-2015 11:08 AM
by acrajchel
11 1,238
Old Business New Owner
Toyman
06-17-2014 08:57 PM
08-25-2015 11:00 AM
by acrajchel
16 1,634
Hi everyone! We're new...
alltrades
08-22-2015 12:46 PM
08-24-2015 10:41 AM
by Steve
2 193
CAn I get some help with...
rootytalbot
08-11-2015 06:14 PM
08-24-2015 10:36 AM
by Steve
12 575
Hi
Wemowjunction
08-16-2015 08:45 PM
08-20-2015 01:46 PM
by Steve
11 438
Drive cable bad?
SGL1
08-10-2015 11:16 PM
08-20-2015 01:41 PM
by Steve
5 395
Hey there everyone
Cole8999
08-16-2015 04:42 PM
08-18-2015 04:35 PM
by Steve
3 275
Help with a truck
bdodson89
04-27-2015 08:15 PM
08-18-2015 11:47 AM
by rmccutchan
7 1,029
I need some aeration...
rootytalbot
08-14-2015 12:32 PM
08-18-2015 07:59 AM
by rootytalbot
7 476
Say Hello !!!
Steve
03-19-2007 11:18 AM
08-17-2015 04:34 PM
by Steve
1,229 406,311
Whats wrong with this...
GreenWorx
07-28-2015 07:56 PM
08-16-2015 11:42 PM
by rmccutchan
3 616
What's your next...
Steve
05-15-2015 11:54 AM
08-16-2015 11:09 PM
by SC93
16 1,274
These are the days on...
ExtremeLawncareServices
01-11-2015 10:41 AM
08-14-2015 11:08 PM
by scaypa
95 11,527
New Biz
kufnerins
08-14-2015 05:52 PM
08-14-2015 08:56 PM
by Steve
1 230
Chemical and Fertilizer...
rmccutchan
08-09-2015 10:36 PM
08-13-2015 11:11 PM
by rmccutchan
6 438
String trim BEFORE mow...
Mr. Mow
04-12-2015 08:13 AM
08-13-2015 02:10 PM
by rootytalbot
12 2,109
Hello all thinking about...
bernie
08-11-2015 04:28 PM
08-13-2015 10:33 AM
by Steve
8 393
Logo Help Font Color
LZLC
08-08-2015 09:26 PM
08-12-2015 03:50 PM
by Steve
4 377
Pricing issue
Mr. Mow
07-07-2015 06:15 AM
08-12-2015 12:30 AM
by Jeff1
20 1,841
My new mower
Chilehead
08-08-2015 09:09 PM
08-11-2015 08:36 PM
by Chilehead
9 557
Thought this was a good...
Just for Cuts
08-06-2015 03:38 PM
08-11-2015 10:54 AM
by Steve
8 538
Plowing pricing
jcurr33
08-08-2015 04:58 PM
08-11-2015 10:51 AM
by Steve
6 534
Should I upgrade my back...
googus
08-07-2015 10:50 AM
08-11-2015 10:44 AM
by googus
7 462
Keeping it clean....
Wolf4dk
08-09-2015 11:31 PM
08-11-2015 06:34 AM
by Chilehead
7 389
I have been rude and...
biglee
06-15-2015 10:11 PM
08-10-2015 09:41 PM
by stallman419
12 2,774
Newbie Saying Hi.
LZLC
08-08-2015 09:22 PM
08-10-2015 11:20 AM
by Steve
1 275
How much do I charge to...
Chris Herrera
08-06-2015 09:30 PM
08-09-2015 11:31 AM
by biglee
2 465
scag SWZT review!
mattthelawnguy
07-23-2015 02:28 PM
08-07-2015 03:26 PM
by Steve
17 1,173
Best commercial contract...
sanlanct
08-04-2015 12:18 PM
08-06-2015 06:20 AM
by sanlanct
2 414
I came across this on a...
rootytalbot
08-02-2015 11:04 AM
08-05-2015 08:17 PM
by SC93
9 649
Help bidding a hedge...
hopolb33
08-02-2015 06:09 PM
08-05-2015 02:07 PM
by Steve
3 451
recycler toro 22"
rvezakis
08-03-2015 12:10 PM
08-04-2015 11:47 AM
by Steve
1 334
» Popular Tags
ad landscaping advertising aerocore applying bark billy goat brushcutter blowout bob villa bush collections contract help curb appeal services deliquentaccounts demonstration design door hangers edging employee problems equipment dealer equipment rental facebook flyers free advertising free lawn care google growing a lawn care business hiring how to hydro increase customers jobs landscape landscaping landscaping training lawn aeration lawn care lawn mowing marketing marketing secrets more customers business mr dave mulch new business ordinance past due per hour charge per hour service plowing pricing profit on employee roundup scag secrets to landscaping sell the vision seo shell shreaded solo solo backpack sprayer sq ft swzt tree tree pics up sell employee walk behind web design website winterization wood www.greenturion.co.za
Powered by vBadvanced CMPS v3.1.0

All times are GMT -5. The time now is 07:16 AM.


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

All times are GMT -5. The time now is 07:16 AM.

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