Pitfalls of commercial lawn care accounts.

Pitfalls of commercial lawn care accounts.

Stop Lowballing track #11 added today.

Learn about the downside to having commercial accounts before you start to service them. “Listen while you mow, to help your business grow.”

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We recently asked our friends in the industry the following questions. For new businesses starting off into the world of servicing commercial accounts, what would you say are the biggest pitfalls they should be aware of and try to avoid? What do you like most or least about your commercial clients?

I hope you find this information useful.

  • A very common theme amongst the responses was the commercial accounts don’t pay their bills on time. Some responses even put the delay in pay from 6 – 8 months after the invoice was sent. Could you hold off on collecting for that long? It might be important to consider this in your contract and include a late fee for invoices unpaid after a certain amount of time.
  • Commercial clients also want top quality work at the lowest price available to them.
  • If your company is a one person company, you might be at a disadvantage because commercial accounts require much attention to detail on a continuous basis.
  • You will need more cash in your business account to keep you afloat as you provide work for your commercial accounts and await payment.
  • Even if you do a great job, a commercial account still might drop you at the end of your contract because another company offered a lower bid.
  • Don’t go into debt to fund your commercial account operations because you might never get paid.
  • Many lawn care operators talked about a lack of loyalty from commercial clients. With residential clients, you can build a bond with them over time that allows you to charge more. You can also expect they will continue to stick with you as long as your work is kept up. Commercial property managers will come and go and look for the cheapest bid.
  • Be prepared for a commercial customer, who accounts for a large percentage of your revenues, to drop you. It can and will happen. If you are dependent on the income from one customer, it can sink your business. Also, don’t let the client know you are dependent on them or they will use it against you to force a better deal.
  • Try to stay with smaller commercial accounts rather than one big commercial account. You will be able to weather the storm if one fails to pay.
  • Some lawn care operators feel the best commercial clients are office campuses and industrial parks. You will have only one person to answer too. With homeowner associations, each homeowner will want you to do things differently.
  • If you bid one figure for a commercial account and the client wants you to lower it by a certain amount, don’t do it. Stick to your bid. You can and will lose money on such accounts. The client will then know they can push you around and they will use it to their advantage in the future.
  • Be on the watch for property managers who try and get you to perform services that are outside those listed in your contract without offering you additional payment. Even if they make a veiled threat you may lose the account. Don’t do it or you will open a floodgate of other requests which will kill any chance you had at the job being profitable.
  • In your contract make sure you state any additional services will be billed extra.
  • Will you be responsible for picking up stray trash? Make sure you bill for this and have it in your contract.
  • What if a commercial account’s property manager is changed mid year? Who is responsible for paying you? The commercial account or the property management company?
  • Most commercial accounts are not interested in your up sells. So what you see is what you get with them.
  • If you work for a homeowner’s association, make sure you only deal with the president. If a homeowner has a problem with your services, have them bring it up with the president and not you. Otherwise you will be inundated with an unlimited flow of requests from each homeowner.

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