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
  #11  
Old 01-27-2012, 03:39 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

right now my customers are pre-paid month to month with a few that I mow that pay me when I show up.

dpld....if you don't mind me asking....are your customers paying by check or cc or both? I believe sometime this season, we will be using a cc payment option. Might just be thru paypal....don't know yet. I'm real particular about making choices when it comes to offering this new way of paying (cc), we're checking out different rates, etc. My brother in law (my accountant extraordinaire) suggested maybe collecting for the month on the last Monday of the previous month. It's still a work in progress with decisions that need to be made by the end of Feb.


anyhow....billing clients ahead of time and collecting "as we mow" has probably been the single most important way I have kept my business operating in the black with no debt.
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


  #12  
Old 01-27-2012, 04:35 AM
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

Lawn care business tipsLawn Care Business Book
Have a plan to protect you from clients who cancel service, and request a refund.

Getting money early, means you might spend it. lol. That's the only issue really...

Reply With Quote
  #13  
Old 01-27-2012, 05:57 AM
jymie's Avatar
jymie jymie is online now
Senior Member
 
Join Date: Aug 2008
Location: Hamburg New York
Posts: 904
Rep Power: 7
jymie is on a distinguished road
Default

Quote:
Originally Posted by USA Lawn Care View Post
right now my customers are pre-paid month to month with a few that I mow that pay me when I show up.

dpld....if you don't mind me asking....are your customers paying by check or cc or both? I believe sometime this season, we will be using a cc payment option. Might just be thru paypal....don't know yet. I'm real particular about making choices when it comes to offering this new way of paying (cc), we're checking out different rates, etc. My brother in law (my accountant extraordinaire) suggested maybe collecting for the month on the last Monday of the previous month. It's still a work in progress with decisions that need to be made by the end of Feb.


anyhow....billing clients ahead of time and collecting "as we mow" has probably been the single most important way I have kept my business operating in the black with no debt.
Check into merchantanywhere.com you can use it through a smart phone and they have a bluetooth reader/printer option also.
Plus, they can set you up for part of the year. Ex. our season around here runs from Mid April - Nov, you only get a monthly fee for the month you operate your business. In Dec you get a yearly fee of $99, and the monthly fee was $24.95 (Apr - Nov), plus any transaction fees. I am also looking into inuit payment processing. They are sending me the reader to see if it will work on my phone.
Reply With Quote
  #14  
Old 01-27-2012, 07:20 AM
TiedemanLLC TiedemanLLC is offline
Senior Member
 
Join Date: Dec 2011
Posts: 226
Rep Power: 3
TiedemanLLC is on a distinguished road
Default

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).
Reply With Quote
  #15  
Old 01-27-2012, 07:28 AM
mark123's Avatar
mark123 mark123 is offline
Senior Member
 
Join Date: Apr 2009
Location: Pennsyltucky
Posts: 1,401
Rep Power: 7
mark123 is on a distinguished road
Default

To me, money is money. In advance, during service or at the end of the month is all the same.

I could see where having someone pay in advance would be a good thing if it locks them in and you can pre-order the products without worrying that they'll cancel. No refund would have to be the rule. The discounts are too steep though. I'd say 6% to save the tax or 10% tops no matter how far in advance they pay. I've not offered discounts for pre-payments but I may for the fertilizer treatments, never for mowing.

Last edited by mark123; 01-27-2012 at 07:31 AM.
Reply With Quote
  #16  
Old 01-27-2012, 07:42 AM
jymie's Avatar
jymie jymie is online now
Senior Member
 
Join Date: Aug 2008
Location: Hamburg New York
Posts: 904
Rep Power: 7
jymie is on a distinguished road
Default

I had two customers last season that opted to pay the whole season ahead of time, they are contract customers. I give them the option to pay the whole year at 20% off the weekly rate. It gives me some up front capitol to work with to start the year which is a good thing.
Reply With Quote
  #17  
Old 01-27-2012, 08:25 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 TiedemanLLC View Post
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.

Last edited by dpld; 01-27-2012 at 08:31 AM.
Reply With Quote
  #18  
Old 01-27-2012, 08:38 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
right now my customers are pre-paid month to month with a few that I mow that pay me when I show up.

dpld....if you don't mind me asking....are your customers paying by check or cc or both? I believe sometime this season, we will be using a cc payment option. Might just be thru paypal....don't know yet. I'm real particular about making choices when it comes to offering this new way of paying (cc), we're checking out different rates, etc. My brother in law (my accountant extraordinaire) suggested maybe collecting for the month on the last Monday of the previous month. It's still a work in progress with decisions that need to be made by the end of Feb.


anyhow....billing clients ahead of time and collecting "as we mow" has probably been the single most important way I have kept my business operating in the black with no debt.

they do both and the people who do auto-pay use their cards because they have to have a card on file in order to do the auto-pay.

but as i mentioned in earlier posts all i do is commercial now and i bill ahead of the services so to some degree it works out as the same with some slight variations but with the commercial work the dollar amount is much greater as well as most corp's don't use credit cards to pay for expenses that large.
Reply With Quote
  #19  
Old 01-27-2012, 08:47 AM
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 dpld View Post
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.
good points
Reply With Quote
  #20  
Old 01-27-2012, 04:06 PM
Steve's Avatar
Steve Steve is offline
Administrator
 
Join Date: May 2003
Posts: 36,307
Rep Power: 10
Steve has disabled reputation
Default

Quote:
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?
What % of your total net income from a customer is profit? This needs to be known first before you can take the next step to figure if it is worthwhile offering such discounts.

Then you gotta try and figure if you are getting any discounts from your suppliers to buy in bulk.

And then you also have to account for what % of your customers pay on time and how much time you spend tracking down late payers or how much you lose from non-payment.

When I would see discussions on 10% discount for prepay of a full year I would kind of cringe because we see how crazy some of our members get at using credit cards to accept payment. That is what 3% of the sale? Now how about dealing with 10% of the sale?

At 25% yikes!

Could you get better results by billing each month ahead of time?

To figure this out, I would play with some figures on two fictitious customers and see what the results are to service. Have each customer projected out over 3 years where one prepays with a discount and another doesn't prepay.
__________________
- 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
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
Hello! New here and...
CaliforniaFriendly
Today 11:30 AM
Today 11:30 AM
by CaliforniaFriendly
0 27
Exmark Lazer Z S-Series...
BLC7
08-22-2014 10:18 AM
Today 08:03 AM
by Greg'slawnandlandscape
8 249
Stihl engine isn't...
Marcintosh
08-12-2014 08:30 PM
Yesterday 09:28 PM
by Marcintosh
12 448
Hello
jawnebgoode
Yesterday 08:37 PM
Yesterday 08:37 PM
by jawnebgoode
0 25
Hello from Ohio
kurtwin
Yesterday 05:06 PM
Yesterday 05:06 PM
by kurtwin
0 36
Softball field
kslawn
08-15-2014 09:28 AM
Yesterday 12:01 PM
by Steve
16 547
Lawn needs top soil What...
jymie
08-26-2014 11:01 AM
Yesterday 11:58 AM
by Steve
5 159
Sod
RosalesLawnCare
08-27-2014 03:47 PM
Yesterday 11:55 AM
by Steve
1 83
Help pricing cut down 7...
Bradcook21
08-26-2014 11:17 PM
Yesterday 11:47 AM
by Steve
5 147
Walk Behinds and Texas...
SGL1
08-26-2014 03:53 PM
08-27-2014 10:38 PM
by SGL1
5 152
Say Hello !!!
Steve
03-19-2007 11:18 AM
08-27-2014 08:33 PM
by kurtwin
1,187 331,111
These are the days on...
ExtremeLawncareServices
03-22-2014 09:12 AM
08-26-2014 04:21 PM
by ExtremeLawncareServices
110 6,526
How do I approach...
Bradcook21
08-21-2014 01:48 AM
08-26-2014 05:08 AM
by Billy Goat
12 435
Tender Process
M2Dave
08-24-2014 12:31 PM
08-25-2014 04:14 PM
by Steve
2 142
Grass hopper mower
ExtremeLawncareServices
12-05-2013 08:51 AM
08-25-2014 04:02 PM
by Steve
26 3,782
Need help pricing basic...
Bradcook21
08-22-2014 01:21 AM
08-22-2014 01:05 PM
by Steve
2 221
Yearly contract Pricing
jrob0691
08-21-2014 08:57 AM
08-22-2014 01:01 PM
by Steve
6 288
yearly contract help...
jrob0691
08-21-2014 04:09 PM
08-22-2014 12:48 PM
by Steve
1 175
Pampas bushes
Bradcook21
08-22-2014 01:30 AM
08-22-2014 07:17 AM
by grassdoctore
1 149
2014 Gie-expo
ExtremeLawncareServices
08-19-2014 11:22 PM
08-21-2014 08:50 PM
by phlawncare
2 194
Fuel Can Spouts
Shark1611
08-16-2014 09:09 AM
08-21-2014 08:23 PM
by SGL1
11 429
Have you ever had to...
SouthernRootsLawnCare
07-26-2014 02:41 PM
08-21-2014 05:03 PM
by stevef1201
6 694
Hello
M2Dave
08-21-2014 12:32 AM
08-21-2014 01:38 PM
by Steve
1 154
New Landscaping Business
rekon32
08-16-2014 02:26 PM
08-21-2014 12:33 PM
by SouthallMowing
8 485
Downed Tree Chop Bid
WesleySnips
08-16-2014 03:47 PM
08-20-2014 01:44 PM
by SGL1
10 465
60 inch honda/bunton...
pblawncare
08-17-2014 11:30 AM
08-18-2014 03:19 PM
by Steve
2 212
Replacement Parts -...
nicholas-KC
08-16-2014 08:40 AM
08-18-2014 03:16 PM
by Steve
4 318
Preparing the soil
Billy Goat
08-16-2014 06:18 PM
08-18-2014 03:01 PM
by Steve
1 224
What to pay help
phlawncare
08-04-2014 08:33 PM
08-18-2014 10:33 AM
by jrs.landscaping
29 1,042
Hello
Jeff1
08-07-2014 11:18 PM
08-15-2014 11:53 PM
by Jeff1
11 527
Lie #2 RESIDENTIAL...
ExtremeLawncareServices
01-06-2014 05:02 AM
08-15-2014 01:46 PM
by mattthelawnguy
54 6,605
Need help 30 HP koler...
Shady Grady
08-01-2014 03:31 PM
08-15-2014 08:46 AM
by kslawn
18 700
New Boomless Sprayer!
BlackRain75
01-03-2014 01:01 PM
08-14-2014 02:37 AM
by BlackRain75
12 1,874
first year update
cmdlawncare
08-12-2014 05:41 PM
08-13-2014 03:29 PM
by Steve
1 324
Hello from Jacksonville,...
JM Lawn Care
08-10-2014 07:15 AM
08-13-2014 07:04 AM
by Sprinkler Buddy
9 431
Hello everyone new to...
maddyandrays
08-11-2014 04:51 PM
08-12-2014 08:58 PM
by Shark1611
2 272
Walk behinds
hpruitcei
08-07-2014 06:28 PM
08-12-2014 02:35 PM
by mattthelawnguy
7 536
New name help
stevef1201
08-10-2014 04:27 PM
08-12-2014 12:03 PM
by Steve
6 425
my little green dilemmas
Lawn Techie
08-03-2014 11:47 AM
08-11-2014 01:20 PM
by Steve
7 528
what the best...
CleanCutsLLC
08-02-2014 01:02 AM
08-11-2014 01:16 PM
by Steve
6 558
Texas lawn care company...
Livingston Lawn Care
07-25-2014 11:29 AM
08-11-2014 01:19 AM
by ExtremeLawncareServices
13 827
Covering all the bases
janslawncare
08-08-2014 10:11 AM
08-08-2014 01:41 PM
by Steve
1 371
New from Florida
ADE
08-06-2014 08:40 PM
08-08-2014 01:32 PM
by Steve
4 434
JOB - Landscape Install...
janslawncare
08-08-2014 10:06 AM
08-08-2014 10:06 AM
by janslawncare
0 324
Battery power tools or...
Steve
08-07-2014 12:24 PM
08-07-2014 05:18 PM
by mattthelawnguy
2 331
My client just told me...
Greg'slawnandlandscape
08-04-2014 08:39 AM
08-06-2014 11:14 PM
by grassdoctore
12 674
Illegal spraying
GoGreenerKS
07-04-2014 09:11 AM
08-06-2014 02:03 PM
by Steve
13 1,304
Mowing the hills
EyeCatchersNow
07-08-2014 12:22 PM
08-06-2014 01:40 PM
by Steve
20 1,534
Crop Rotation Techniques...
eastsidelandcare
07-17-2014 03:47 PM
08-06-2014 10:29 AM
by eastsidelandcare
5 714
Late charge
Simon Abousaada
07-30-2014 07:23 PM
08-05-2014 06:46 PM
by TheBeast
12 931
» Popular Tags
4wd 34'' apartment complex auger blades butterfly gardens charge christmas christmas light hanging credit card customers ditches exmark ferris financing first truck georgia gopherhaul grass gravely growing a lawn care business health holiday how much to charge john deere quik trac kansas city landscape services lawn lawn care lawn care busines plan lawn care business podcast lawn care business seo lawn care business show lawn care business website lawn care business website seo lawn care seo lawn care website lawn care website seo leaf marketing mechanic monthly mow mulch mulch price new and restored landscapes new buisness new business podcast property management company pto riding mower running a business savannah scag schedule seo snow plowing starting a business start up lawn care business stihl top dresser toro toro grand stand trailer tree care trimmer rack walker winter winter services
Powered by vBadvanced CMPS v3.1.0

All times are GMT -5. The time now is 04:49 PM.


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

All times are GMT -5. The time now is 04:49 PM.

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