If you’re in the landscaping or lawn care business, you know that commercial mowing contracts can be a great source of revenue. But how do you price them? Bid them? Win them? Today, we’ll teach you the basics of commercial contracts so that you can start landing more jobs and boosting your bottom line.
What you’ll learn in this guide
Before we jump into our commercial lawn care contract guide, here’s a quick overview of what you’ll learn.
Table of contents
Residential vs. commercial mowing: What’s the difference?
It may not seem complicated, but making the move from a residential to commercial client base requires some adjustments. While the work will more or less stay the same, there are some aspects to the business that could change significantly. This includes:
Commercial and home use lawn mowers differ in terms of quality, endurance, range of features, and, of course, pricing.
Residential mowing equipment is built for infrequent use on smaller lots, while commercial mowers are made to withstand daily use over larger areas. The latter will have engines with higher horsepower and features that allow them to operate in a range of terrain.
With that in mind, you can expect to spend more to purchase and maintain commercial lawn care equipment.
Revenue per customer
Commercial properties generate higher revenues compared to residential ones, commercial lots are often bigger and require more frequent maintenance. This is especially true for businesses that want to make sure their properties look well-maintained and professional.
Residential landscaping is a competitive field, so you could have a tough time scoring loyal customers if you’re new to the game. However, while there may be fewer commercial lawn mowing and landscaping contractors, you’re going to have to work hard to win new business. You’ll be up against skilled competitors, and the quality of both your service and equipment will be key to your success.
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The benefits of working on commercial mowing contracts
If equipment is expensive and competition is tough, why waste your time with commercial clients? Aside from earning higher revenues per customer, commercial contracts will also give you:
Residential mowing jobs are usually project-based, while commercial lawn mowing is typically based on a contracted agreement. Property managers will usually request month or year-long contracts with commercial lawn care contractors. These contracts will indicate how often the landscaping company makes visit, what the responsibilities are on each visit, and whether specialized services are required.
Because of the aforementioned set up, commercial accounts are also far more predictable.
Given that you’ll be working with professional businesses, you’ll know when and how you’ll be getting paid from the get-go. You also won’t have to wait around for your clients to decide when they can afford to pay for your services.
Pricing commercial mowing contracts
We previously discussed how to price residential lawn care services. In a nutshell, the key to good pricing is putting the time in to realistically estimate the number of hours the job will take to complete. You may be tempted to calculate a price based on the lot size, but taking this approach will likely leave you stretched for the time you need to do the job well.
After estimating the number of hours the job will take, you need to apply your hourly cost. How much to charge per hour should depend on the following factors:
- Labor: This is what you’ll be paying your workers per hour. This should also include your hourly rate as the owner. To find out your hourly labor rate per worker per job, consider the average rates of commercial lawn care companies in your area, the amount you pay your employees by the hour, and your target profit margin.
- Equipment: Most commercial lawn care contractors charge an equipment fee, which is usually billed as a flat rate. This should cover the cost of purchasing, maintaining, and repairing equipment over its lifecycle.
- Overhead costs: This includes the costs of maintaining administrative staff, an office, transport vehicles, communications, marketing, etc.
- Time: To determine how much time a job will take, do a thorough walkthrough of the property and discuss any specialized service your client might need.
To compute for pricing, follow this formula:
Hourly labor rate (number of hours) + overhead fees + profits + taxes = Total job price
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What’s included in a commercial mowing contract?
You commercial lawn care contract should include the following details:
- Your business’s and your customer’s name, address, contact information, and the date.
- Your business’s license information.
- The time period in which your services should be rendered.
- The frequency of your visits.
- The number of workers assigned to the project and the amount of hours they will work per day.
- The equipment that will be used.
- The pricing.
- An outline of the services you will provide, along with a list of exclusions.
- Clauses to indicate which party takes responsibility for damages incurred to things like fencing, irrigation systems, etc.
- An agreement on the application of pesticides, including the names of pesticides to be used.
Finding new commercial clients and building relationships that last
Now that you know how to price your services and what to include in your contract, it’s time to get out there and start finding new clients. But where do you even begin? Here are four ways to build your commercial client pool.
Tap into your residential clients
Your existing relationships and clients are an easy place to start. If you previously worked with residential accounts, you can use your already established relationships to secure recommendations for commercial clients. Ask your clients if they have any commercial businesses that need your services, or if they can endorse you to businesses they know.
Attend community events
Gone are the days of cold calls and emails. Today, it’s all about building real-world connections.
One way to do this is to find local events or community meetings where you can rub shoulders with property managers. Consider joining your local chamber of commerce, networking events, or CEO forums to get to know the business owners in your community.
Identify businesses in your service area that may need help
This method of finding potential clients is almost too simple, but it works! Just hop in a car and drive around your neighborhood to look for properties that look like they may need help in the landscaping and mowing department.
Make a list of the types of properties you find and their addresses, then create targeted ads aimed at these very businesses.
Get in touch with HOAs, real estate groups, and BOMAs
Real estate groups, building owners and managers associations (BOMAs), and homeowners associations (HOAs) are all wellsprings of potential clients.
Image credit: Avi Waxman via Unsplash
Bidding on your next commercial mowing contract
So you’ve made connections. How do you then get potential clients into signing your landscaping contracts?
Listen, don’t impose
Most clients already have an idea of what they want in terms of landscaping and lawn care. Your job is to listen, take note of their expectations, and deliver.
Discuss the benefits of a well-maintained property
How will a professionally-maintained lawn bring in more customers? landscaping and mowing costs money, so you have to find a way to convince your clients why they should be spending their hard-earned money towards your services.
Take a professional and scientific approach
When bidding for a project, make it a point to be systematic and clear about what exactly you can provide.
Make sure your proposal is professionally made, with a strong and cleaning branding. Ensure that it is formatted so that it can be easily understood as well.
You can also check out our landscaping estimate template for a guide on delivering a consistently accurate estimates.
Expanding into commercial mowing work: Dos and don’ts
Expanding into commercial mowing and landscaping is not as easy as it sounds, even with a residential background. The following tips should help you navigate the commercial landscaping market.
Don’t rely on just one account
Commercial landscaping contracts can bring in a significant amount of money compared to residential contracts. But this doesn’t mean that you can rely on just one or two clients to get by. It’s good to have a variety of different property types on your roster, so that if one client cancels, you aren’t left scrambling for ways to pay your workers.
Don’t compromise your pricing to get started
As a new player in a field of well-established businesses, you may be tempted to lower your pricing to appeal to more clients. However, this move will be detrimental both to you and your competition. Clients will continue to expect your services at low rates, and will demand the same from other companies. If you want to get the pay that you (and your team) deserve, charge at reasonable rates.
Do invest in training
Just because you have experience in residential accounts, it doesn’t automatically mean you’ll succeed with your commercial accounts. Invest in training, especially for your sales and marketing team, if you want to see your business flourish.
Image credit: Dylan Gillis via Unsplash
How to maintain customer satisfaction
In our recent blog post on how small businesses can provide world-class customer service, we talked about how customer service is essential to the very survival of any business. When you can make a client happy, you can almost be certain they will return to your business.
Here are some top tips for keeping your client roster satisfied with your service:
Listen and learn
Provide your customers with opportunities to provide feedback — then make an effort to act on that feedback.
Some companies provide their clients with an automated survey email upon completion of each job. Others allow clients to leave reviews on their sites or Facebook pages. The key is to ask for a review once a job is done – great work leads to great reviews, which leads to new business.
Keep customer information organized
When you have all your customer information in one place, you can respond to job orders, inquiries, issues, and special requests in a snap.
CRMs are great for keeping all client information in one easily-accessible dashboard. Instead of wasting your customers’ precious time looking for an invoice or a note, you can simply pull up all the information you need on one client and answer all their concerns in an instant.
Offer promos and discounts to loyal customers
One simple way to keep customers coming back is by rewarding their loyalty. There are many ways to go about this, from offering discounts for pre-paying to providing referral fees to customers who send recommendations that sign.
Commercial mowing contracts FAQs
How do you bid for commercial lawn care work?
How do you get commercial property to mow?
Is a mowing business profitable?
How do you bid for commercial lawn care work?
Listen to your clients and take note of their expectations, outline the benefits your business can provide to the client, and send a clear, professional, and well-formatted proposal.
How do you get commercial property to mow?
You can find commercial clients by tapping into your former residential clients, joining community events, and surveying your area for the types of businesses to market to.
Is a mowing business profitable?
Yes, a commercial mowing business is profitable. Any establishment with a patch of grass and some landscaping needs help with upkeep.
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The post Commercial mowing contracts: How to price, bid, and win them appeared first on Method.
By: Sarah Iranca
Title: Commercial mowing contracts: How to price, bid, and win them
Sourced From: www.method.me/blog/commercial-mowing-contracts/
Published Date: Wed, 02 Feb 2022 15:15:00 +0000