Open Association of Landscape Industries
Get shot of under performing contracts
Let us assume that you have five separate contracts each week and that four of them are accurate when it comes to the charge out rate.
The fifth one however only covers one fifth (20%) of your yearly cost (assuming it is a day a week for the year).
In your mind, you do not feel that you can let the client down by walking away, however, you need to boost your income because you need to make some extra profit.
What do you do next?
Experience tells me that you should never do the work at anything below what you need to charge and regardless of how loyal you feel to the client the decision should be, walk away or up the charge.
You are effectively working for nothing because there is no profit going into your account and although one fifth of your costs are being met, it is not a situation that you should have to endure.
Be strong, if your client is able to afford £15.00 then chances are they can stretch to £18 or £20 and if they can't, it is in your interest to seek a client that can.
Talk to the existing client before you doing anything drastic, you will be surprised how many people will be sympathetic to your needs, after all, any arrangement should be 'mutually' beneficial.
I cannot advise on exactly what you should charge. You need to accurately work out what it costs you to supply one hour of your time and add the appropriate profit - calculate your hourly rate.
Please read this post in conjunction with: Landscapers - be prepared to walk away.
Replies to This Discussion
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Permalink Reply by Ian Parkes on -
What if you u have no contracts, everyone seems to have them excepct me... this is the year I have knuckled down, grown and now got a helper with me and things are going good, but no contracts , do they really pay a lot more... what's the going hourly rate of a contract then £25 per hour per man a guess??? no idea as I have none , I got a block of faults to quote next week and I'm sure they don't want no contract and be hourly rate so still no contracts, kinda getting to me as residential I am turning away now... I put my rates up this yr on residential not by much a pound and everyone seemed to stay.. but did loss a lot jobs last year as people moved but to replaces with better jobs now.
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Permalink Reply by Colin Hunt on -
£25.00 per hour for maintenance.............8 hour day.......£200.00per day..........£1K per week, would be very nice, but remembering that a lot of maintenance is unskilled labour, you would be very lucky to get that. Much will depend on the location.
With regard to your quote next week, you have to decide what you want to earn. You will have an idea of the time each visit will take, I would go for weekly March-Nov and monthly Dec-Feb. Include all aspects, grass cutting, fertilizing/weedkilling, pruning, keeping hard areas swept and clear of weeds, raking gravel if there is any, removal of all arisings(important). Add all this up as a yearly price and ask for equal monthly payments(companies prefer this). Make yourself available for snow slearing/salting at additional cost. Stress that you will be looking to give added value and site improvement as the year progresses.
Have fun!
Ian Parkes said:what if u have no contracts, everyone seems to have them expect me... this is the year i have nuckled down, grown and now got a helper with me and things are going good, but no contracts , do they really pay alot more... whats the going hr rate of a contract then £25 per hr per man a guess??? no idea as i have none , i got a block of falts to quote next week and im sure they dont want no contract and be hourly rate so still no contracts, kinda getting to me as residential i am turning away now... i put my rates up this yr on residnetial not by much a pound and everyone seemed to stay.. but did loss alot jobs last year as people moved but to replaces with better jobs now.
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Permalink Reply by Ian Parkes on
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yea very good idea thanks im just hopeing its a good size and he doesnt ask how much per hr and shopping for a cheap gardener... but fingers crossed.
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PRO MemberPermalink Reply by Gary RK on -
The idea is to "value add" to the maintenance tasks so you can charge prices like that per hour. I don't necessary agree that a lot of maintenance is 'unskilled'. Depends how how you position your business, how you specify tasks and what 'auotmation' you can chuck in to get a job done.
Example : Weeding
- can be somewhat 'unskilled' UNLESS the person knows how to identify weeds, best cutural method to manage
Verses:
- careful use of pesticides via a IPM program. Experienced, trained qualified staff. License, ability to upsell etc, Ability to charge a profitable rate as a 'Professional'
I can tell you the large commercials cost out their contracts at more than that per hour. However it bears no relation to what they actually pay their guys.....
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Permalink Reply by Ian Parkes on
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ahh yea i see so maximum profit is achieved.
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Permalink Reply by Colin Hunt on
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Walking behind a mower and edging a lawn is relatively unskilled and will take care of at lease 50% of time on most contracts- allowing the more knowledgable(and skilled) gardener to 'garden'.
Agreed that the large commercials charge a much higher rate, but a company would not entertain a 'small guy' trying to match their charges - they may as well go with the big boys.
Gary RK said:
The idea is to "value add" to the maintenance tasks so you can charge prices like that per hour. I don't necessary agree that a lot of maintenance is 'unskilled'. Depends how how you position your business, how you specify tasks and what 'auotmation' you can chuck in to get a job done.
Example : Weeding
- can be somewhat 'unskilled' UNLESS the person knows how to identify weeds, best cutural method to manage
Verses:
- careful use of pesticides via a IPM program. Experienced, trained qualified staff. License, ability to upsell etc, Ability to charge a profitable rate as a 'Professional'
I can tell you the large commercials cost out their contracts at more than that per hour. However it bears no relation to what they actually pay their guys.....
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PRO MemberPermalink Reply by Gary RK on -
Colin, I guess we will agree to disagree - we don't sell our services in such a basic fashion!
We don't let 'unskilled' people cut lawns. Our staff have been trained, hold basic lawn care and maintanance (NPTC) qualifications and take pride in getting a lawn looking good.
We focus ourselves on the profitable, upmarket sector where professionalism, image, ability to deliver matter. THAT's where the money is....
And, yes companies do and can choose the smaller contractor. We have won many contracts against larger companies as they can not provide a reliable professional, quality service. I have previous experience to prove it and come from Sales background and can "sell" our services effectively and profitably......
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PRO MemberPermalink Reply by Jen@A&J Owenwindows&gardens on -
We were asked to quote for a contract for a nursing home recently to take care of borders. Company were not happy with the service they were receiving, guy didn't know what he was doing etc etc and contract was up for tender.
My contact into there was a close friend who had been very happy with the work we'd done for her father who had given us a glowing review...
Initial chat all went well, explained what we could offer etc. Came back with the quote and we were told sorry we will have to stick with our original gardener our max budget is £9 per hour per person!!
Sometimes it doesn't matter how you view yourself, but how others value you...Loads of time wasted!!!
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Permalink Reply by Ian Parkes on
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gary is right worked for and seen so many bodge job contract maintenance services, cant belive they actually get paid! what a joke all untrained people who dont know what a weed is or can even cut a lawn properly, let along strim.
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PRO MemberPermalink Reply by Gary RK on -
Jenny agree, but initial due dilegence might have saved you wasted effort. It is quite legit to test the water with a mention of costs, ask budget /specifcation questions or even do a bit of digging online (esp if council contracts as previous costs are a matter of public record).
Intutition is key. We had one in Feb for a large private estate. talking to one of the committe members over a cup of tea while walking around she let slip they had to test the market every couple of years to see if their current contractor was still value. So, in fact they were using other contractors to validate their current contractor with no intention of changing. I walked and did a no bid. I later learnt they did not progress futher anyone's first tender. ......
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Permalink Reply by Colin Hunt on
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I am not 'selling my services' here Gary, the point I was trying to make to Ian was to be realistic (and professional) when quoting for the commercial contract for which he was asking guidance.
For the record, we too offer a professional service, have prestigious contracts as well as many smaller garden contracts - our area dictates the market. We are in our 35th year of trading and our lads are given the necessary on site training.
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PRO MemberPermalink Reply by Anthony @ JDC Maintenance on -
Ive won two contracts so far this year where the previous contractor was not doing everything they should be, in both cases they would turn up trim, strim and blow and be gone. They were repeatedly asked by the residents to pull weeds, trim shrubs etc as the contract specified, but nothing extra was ever done.
It worked out for both jobs i was a fair bit more expensive, but you get what you pay for and the clients understood this, the sites are now gradually improving to everyones satisfaction.
It seems a lot of the bigger companies quote low to win the work and then dont deliver the service required,
there loss and my win! in my experience, after having the initial meeting it seems that a lot of the clients actually want a 'gardener' not just a 'contractor' and so, in my case atleast are willing to pay more for a far more personal style of service.
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