Cut Grass In January….In The Snow

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Well, maybe not, but you can get paid to cut grass even when the grass isn’t growing. I sold my lawn company in January 2006, and when I sold the company it was making $10,000.00 per month during the winter months. And I only had one full time employee. So, my profit in the winter was exceptional. This is one of the reasons I was able to know how to run an online business successfully.

One question that I get asked often is, “How to you negotiate and estimate a year round lawn contract?”

First, don’t be afraid of the term “year round” or “contract”. I remember when I first started my lawn company thinking that I would never be able to get year round contracts. But after negotiating the first couple contracts it became easy. The largest lawn contract that I negotiated was worth over $60,000.00 annually.

Let’s look at a sample of how you would price a year round contract. We’ll assume that where you live the grass growing season is only seven months and your client only wants service every two weeks during those months. That means you’ll service the client about 14 times during the seven month period. If your normal bill per service was $100.00 then your total annual revenue from the client would be $1,400.00.

However, by creating extra value in your customer’s mind you can easily increase this annual revenue and turn the client into a year round customer. (Which means you’ll have a better Christmas.) So, how do you create extra value? Let’s assume that your normal services include mowing, weed-eating and blowing. What you have to do is provide additional services to the client for the same monthly invoice amount but on a year round basis.

We created a premium package which included our normal services plus fertilization of the lawn and shrubs, minor trimming of shrubs and debris/trash removal from lawn and flower bed areas. (We customized our list of premium services depending on what we thought the customer would view as valuable.) Then when I would go in to have the customer sign the contract for the 14 service calls that he wanted I would show them how much more they could get for the same amount of money each month, but the contract would just be paid on a year round basis.

The majority of the time (85% or more) the customer would chose the year round option. There are a couple of principles from selling that are important to remember. First, remember the customer has already accepted the fact that they are going to have to spend $100.00 per service call. You don’t have to convince the customer to spend any extra money each month. Second, you are making it easy for the customer to feel that they are getting a good deal and everyone wants to feel like they are getting a deal.

I would have two contracts already written out and I would try to get them to sign the year round contract by explaining all the benefits. If they wouldn’t initially sign the year round contract I’d pull out the summer time only contract and place it beside the year round. On each contract I would had typed out exactly what services they would get from us. So they would see on the summer time only contract just a couple of line items of service and on the year would contract they would see 10 or more line items. Then I would ask one more time if they “would prefer to keep there lawn looking perfect year round instead of just for a few months.”

Well that’s a brief look at how I negotiated year round contracts. Do you have any different techniques or ideas that you use to win year round contracts?

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