How to get lawn care customers to prepay for the entire year.

One of our friends, Becca, on the Gopher Lawn Care Business Forum wrote to us:

Ok, I’ll ask one more question then leave you guys alone. We have heard that a lot of companies in this area offer their customers a discount if they pay the entire season in full before the season starts. Is this a good idea? If so, do we offer it only to the residential customers or do we offer it to both residential and commercial. We have some customers that own the business that we cut, and we also do thier homes. So, we’re kind of confused as to how to handle this. Please give us your opinion. And, if we do offer this option, I was planning on sending an invoice showing their whole season amount, minus the 10% discount. Is this a good idea, of course it says right on the statement that if they choose not to take the option, to just disregard the invoice and we will bill them monthly. Thanks so much, you guys have been a big help so far.”

Becca, you are not bothering us. This is what the forum is all about. Asking questions and giving answers!

What you are asking here makes me think of the old phrase, ‘a dollar today is worth more than a dollar tomorrow.’

If you can get paid in full for the year’s worth of lawn care service, I would jump on it. I have seen some lawn care business owners offer 10% off for prepay. I have seen some that didn’t offer anything.

But if you want to experiment with this and offer a discount for the year, yea do it! That would be great. Then you don’t have to track people down for payment. You are also guaranteed that working capital for the year.

How best to approach it? I would say I would talk to them and let them know you are offering this service and the discount for pre-pay. Once they are used to it one season, they will most likely jump on and do it year after year.

Now let’s see what some other forum members have to say about this:

  • Chestin suggested: give your customers the option to prepay for your services. For example, let’s say you have someone that’s interested in signing a year long contract for services but instead of you sending them a monthly invoice, you give them the option of paying it all upfront in exchange for 2 months worth of services free.

Now, you obviously need to know your costs very well to know how much you can afford to give them, but by providing this type of incentive you’ll get a number of customers that would be more than happy to avoid all the hassles associated with sending payment PLUS they get 2 months worth of services for free.”

  • Richard suggested: We offer a 5% discount on prepaid contracts. And about 30% of my clients prepay. It’s all about the savings, who doesn’t love to save money. At a company point of view, it starts the revenue coming in a lot earlier.”
  • patphish123 suggested we sent out it looked like an invoice but it listed all the services we have done for them in the past with the regular price then a prepay discount of %10 if they signed it and returned a check by a deadline date it was just a good way to bring money into the company earlier to cover the spring costs, it worked very well to big response on it.”

Thanks to everyone who jumped in and offered their advice. It’s a great thing to be able to get paid in advance for a years worth of service. Just remember one thing if you do so. Don’t forget to budget that money wisely. Don’t spend it all in the first month on new equipment or what not. Remember, it’s gotta get you and your business through the entire year.

If you have a question on how to run your lawn care business, please jump on our Gopher Lawn Care Business Forum and ask it!

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