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 Colin Hunt on -
Truce!! I'm settling down with a beer and hopefully watching Essex chase down a big total from Kent and progress in the 20/20! Cheers
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PRO MemberPermalink Reply by Jen@A&J Owenwindows&gardens on -
Afraid we were just unlucky here. New local manager had come in and didn't like what she saw from the previous gardener, thought she had more budget than she actually had......head office just vetoed it. We don't really touch the commercial market but if that happens again I think I would politely ask the person concerned whether they were the decision maker or not!
Gary RK said: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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PRO MemberPermalink Reply by Dan Frazer Gardening on -
Jenny the nursing home may be expecting the job to take 4 hours a visit but in fact it might only take you two with the right gear. I steer away from hourly rate discussions. With a small nursing home I can give a price within 2 minutes of seeing the site so if it's not out the way it's no loss to quote.
All businesses must run efficiently to maximise their success. Getting and keeping clients is about, in this order:
1. Quality of work
2. Reliability
3. Cost
If a client is the type who would be won on number 3 then I can't work for them.
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PRO MemberPermalink Reply by Jen@A&J Owenwindows&gardens on -
Afraid they were cost only - the problem here was that the local manager wanted quality and we gave them a fixed price. However, HO were getting a bill for 3 hours at £9 per hour!
Dan Frazer Gardening said:Jenny the nursing home may be expecting the job to take 4 hours a visit but in fact it might only take you two with the right gear. I steer away from hourly rate discussions. With a small nursing home I can give a price within 2 minutes of seeing the site so if it's not out the way it's no loss to quote.
All businesses must run efficiently to maximise their success. Getting and keeping clients is about, in this order:
1. Quality of work
2. Reliability
3. Cost
If a client is the type who would be won on number 3 then I can't work for them.
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Permalink Reply by Roy Bretton on -
So true! In the past I have tried to keep everyone happy, at my expense!!
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