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's Avatar
CHEESE2009 CHEESE2009 is offline
Dr. Scott - Ruler of the Underworld
 
Join Date: Mar 2009
Location: Switzerland, Grindelwald
Age: 74
Posts: 4,475
Rep Power: 11
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: 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: 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 online now
Administrator
 
Join Date: May 2003
Posts: 37,141
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
New to the site
tl757
Today 07:30 PM
Today 07:30 PM
by tl757
0 1
Billing methods
jcurr33
03-26-2015 01:33 PM
Today 07:10 PM
by shadrach
9 261
Commercial Jobs
CurbAppeal1
03-25-2015 04:22 PM
Today 06:42 PM
by lxarth
9 295
How do you get...
ESREVER
03-25-2015 01:30 PM
Today 06:30 PM
by lxarth
10 270
First big mower decision?
SGL1
03-28-2015 08:58 AM
Today 06:27 PM
by Just for Cuts
10 186
Trailer flooring...
Pattersonllc
Today 02:40 PM
Today 06:25 PM
by Just for Cuts
1 26
Snow removal contracts
CDLAWNCARE
Today 02:57 PM
Today 02:57 PM
by CDLAWNCARE
0 27
These are the days on...
ExtremeLawncareServices
01-11-2015 10:41 AM
Today 02:21 PM
by Steve
35 4,117
landscape insurance
clarkslawn
Yesterday 10:14 PM
Today 02:14 PM
by Steve
1 55
Engine question
Blue Star Lawn Care
Yesterday 09:47 PM
Today 02:09 PM
by Steve
1 44
Covering a landscape...
Dan Tanner
03-29-2015 09:01 AM
Today 02:00 PM
by Steve
6 155
Dethatching attachments
jcurr33
03-29-2015 08:56 PM
Today 01:50 PM
by Steve
3 100
Tree Service
Yard Elements
09-10-2011 08:19 PM
Today 01:39 PM
by Steve
25 8,619
Hydro oil
googus
Yesterday 06:45 AM
Today 05:42 AM
by mac83
3 77
35,000 Eddm
greenscaper123
03-18-2015 12:51 PM
Yesterday 10:51 PM
by SC93
22 635
Employee job training...
brookline
12-15-2014 07:15 PM
Yesterday 07:39 PM
by SGL1
30 2,474
Finally got a warehouse
avetslawncare
03-12-2015 07:52 PM
Yesterday 07:36 PM
by SGL1
16 616
Ferris FW35 questions
Chilehead
03-10-2015 08:31 PM
Yesterday 07:08 PM
by Dan Tanner
7 444
Bid for large home...
lxarth
03-22-2015 11:06 AM
Yesterday 07:03 PM
by avetslawncare
11 434
Start LIKING FACEBOOK...
rlclawncare123
02-26-2015 12:06 AM
Yesterday 02:07 PM
by Steve
4 448
Trepidation about...
michellemarvin
03-23-2015 07:46 PM
Yesterday 01:40 PM
by Steve
3 213
I lost a long term...
Sprinkler Buddy
09-04-2011 02:24 PM
Yesterday 01:36 PM
by Steve
16 3,509
bidding a cemetery....
NPM_LLC
03-28-2015 10:56 AM
03-29-2015 01:18 PM
by jrs.landscaping
5 165
Weed and Feed
robkattankate
03-19-2015 09:00 PM
03-29-2015 08:42 AM
by Dan Tanner
5 634
Mower vs lot size advice
jcurr33
03-25-2015 09:29 PM
03-28-2015 08:37 AM
by Dan Tanner
5 221
hoa bid need help
bigdaveha12
03-24-2015 08:29 PM
03-27-2015 11:17 PM
by lxarth
6 296
introducing myself
chris2500hd
03-24-2015 11:16 AM
03-27-2015 02:02 PM
by Steve
8 266
Flag or no flag
Matther777
03-24-2015 02:41 PM
03-27-2015 12:25 PM
by biglee
10 370
Office Administration...
Girlfriend
03-26-2015 05:40 PM
03-26-2015 05:40 PM
by Girlfriend
0 839
Is this tree beyond help?
SGL1
03-22-2015 05:35 PM
03-25-2015 08:55 PM
by SGL1
14 1,259
Opinions on truck wrap
Trupro
02-28-2015 03:21 PM
03-25-2015 07:54 PM
by Trupro
33 1,639
The New Wave!!!! Read...
Jamesw86
03-22-2015 08:33 PM
03-25-2015 02:50 PM
by Steve
10 355
grass in the gas tank
robkattankate
03-23-2015 04:37 PM
03-25-2015 02:36 PM
by Steve
5 233
Helping others
hansenslawncare
09-15-2011 08:50 PM
03-25-2015 02:33 PM
by Steve
11 2,702
DOT Number
acrajchel
03-20-2015 05:56 PM
03-25-2015 02:28 PM
by Steve
7 575
Michelin x tweel.
apmAkron
03-23-2015 04:22 PM
03-24-2015 12:40 PM
by Steve
3 157
spike aerator???
Bradcook21
03-21-2015 01:55 PM
03-24-2015 10:32 AM
by acrajchel
4 258
Hello from Maryland
michellemarvin
03-23-2015 12:44 PM
03-23-2015 07:33 PM
by michellemarvin
2 172
hello from south GA.
CCandALawnCare
03-23-2015 03:46 AM
03-23-2015 07:06 PM
by CCandALawnCare
2 153
Say Hello !!!
Steve
03-19-2007 11:18 AM
03-23-2015 06:14 PM
by jethro
1,218 380,617
Is anyone doing mosquito...
BWild
01-27-2015 11:30 AM
03-23-2015 12:28 PM
by Steve
9 896
Should i take on this...
christw
03-17-2013 01:23 PM
03-22-2015 09:02 PM
by ExtremeLawncareServices
36 7,629
mower stalls when...
boog
03-19-2015 08:20 AM
03-21-2015 08:13 PM
by Wolf4dk
7 298
Hello Emily Reyes from...
Webster14829
03-20-2015 11:23 AM
03-20-2015 03:36 PM
by Steve
2 204
Finally going to give it...
jcurr33
03-12-2015 08:09 PM
03-20-2015 03:31 PM
by Steve
10 592
Weed id?
SGL1
03-17-2015 08:20 PM
03-20-2015 02:37 PM
by Steve
6 311
Mobile small engine...
luckylogger
03-15-2015 02:05 PM
03-20-2015 06:17 AM
by jrs.landscaping
15 534
Brad Cook 21
SC93
03-16-2015 10:40 PM
03-19-2015 09:04 PM
by Bradcook21
4 513
honest opinion please
uppercut
02-17-2015 01:30 AM
03-18-2015 02:55 PM
by Steve
15 1,374
Repair or replace the...
lxarth
12-17-2014 04:07 PM
03-18-2015 02:49 PM
by Just for Cuts
21 2,060
» Popular Tags
aerocore apartment complex auger bark billy goat brushcutter blades bush collections deliquentaccounts design edging employee problems equipment rental ferris flyers foreman free advertising grass growing a lawn care business hills hiring husqvarna introduction john deere quik trac landscape landscape services landscaping training lawn lawn care lawn care business seo lawn care business website lawn care business website seo lawn care seo lawn care website lawn care website seo lawn mowing marketing marketing secrets mr dave mulch new business past due per hour charge per hour service pricing profit on employee pto push versus ride running a business secrets to landscaping sell the vision seo shell small engine repair square foot steep lawns sulky theft toro grand stand trailer tree trimmer rack truck new used landscape up sell employee walk behind web design website website design winterization won't return
Powered by vBadvanced CMPS v3.1.0

All times are GMT -5. The time now is 07:46 PM.


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

All times are GMT -5. The time now is 07:46 PM.

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