Originally Posted by TiedemanLLC
I think many of you are missing my point with the pre-payments. When I am referring to the pre-payments I am not taking a week or a month in advance, I am talking about an entire year ahead of time, sometimes with me it's years in advance.
Now with the pre-payments will do have a "no refund" clause in our contract. All you can receive is credit towards services (not products).
i think beyond that everyone is not looking at the whole picture here.
for me the money i discounted represented a larger savings in the end because i offered a full service such as lawn mowing, shrub trimming, lawn treatments and mulch, etc, etc.
at one point we had 75% of 120 accounts giving me pre payment for the entire year.
well, come febuary i would have 3/4 of my revenue in my hand before i even started to work and with that money i would go to my supplier for lawn chemicals and fertilizer and i would buy and pay for every drop and granular of product i would need for the entire year.
that alone would save me 30% off that cost.
then i would go to my mulch supplier and and on average i was useing 1,200 cubic yards of mulch each year and i would pre pay in febuary for the whole year and i was getting mulch that guys were paying $18.00 per yard for $10.00 per yard.
do the math on that one, not to mention when my supplier seen me pulling in every febuary he knew it was pay day and he loved getting paid up front for that much mulch at a time of year when he was selling nothing.
not to mention when my truck pulls in to the yard to pick up, he dropped what he was doing and immediately loaded me up and i would by-pass the long line of guys waiting to get loaded which also saved me time.
guys used to get pissed and complain and his answer would be " money talks and bull**** walks " and i will do the same for you if you come here every febuary and pay me upfront for the season.
at my yard me and one of my former employee who started his own business bought a 2,000 gallon fuel cell and we even would buy our fuel in bulk.
i never had to sweat payroll and had my payroll in the bank for the whole year collecting intrest before i even had to pay out one dime in payroll.
my point is you have to think outside the box and not veiw everything with a tunnel vision and take advantage of everything you can to capitalize on it and it was a two way street for savings for me and the customer.
i would have substanial savings and i passed it down to the customer and rewarded them for pre payment and the 25% of the accounts that did not pre-pay were on the auto-pay and that saved me the trouble of having to send bills out and wait for the remainder of my money.
it is a win win for everyone.