Lawn maintenance contractors who operate without contracts may be missing out on one of the most effective ways to communicate with their customers. That’s right, because the reason for having a contract goes well beyond its legal definition.
To be sure, contracts are designed to protect the rights of all parties involved. But they also serve to communicate in detail the type and level of service a contractor will provide, and create a degree of expectation for customers that wouldn’t be there without a contract.
“Communication is the key word when talking about contracts,” tells Green Industry consultant Tracy Morland. “Customers intuitively want a plan, and they want to know what to expect from their contractors. A contract maps out the plan in detail, including a description of the services to be offered, when they will be offered, the frequency of the services, how much they cost and to what standard they will meet.”
In addition to the basics of what, when and how often, Morland points out that a typical contract may also include insurance data, information regarding who the contractor contact person would be on site, and details such as who will be responsible for watering new plantings.
Make sure to put enough detail in your contract to avoid any ambiguity, he advises. Include, for example, all the services you will be providing, from mowing and edging, to trimming, pruning, and fertilizing, as well as the name of your on-site contact person. If you don’t know for sure who your contact person will be, possibly include something to the effect that all your people will wear uniforms and the supervisor (contact person) will wear a white shirt.
If you have a drug-free policy, include that in the contract, as well, Morland adds, along with special considerations. Here, he would include statements such as, “Work done outside the contact will have written approval by the property owner or manager.” If doing work for a homeowner association, include the phrase, “All requests have to go through the association, first.”
Walker users Char and Kim Kellogg in Millersburg, Ohio, have their mowing and landscaping customers sign and return contracts each year. “Our primary reason for having contracts is to make sure our customers know the value-added services we provide,” tells Char. “For example, we offer free fall fertilization as part of our maintenance program, along with several pruning sessions. The contract lets our customers know the level of service they’re getting for their money.”
The Value of Predictablity
A contract not only provides a roadmap for the customer and a level of expectation, it also helps the contractor predict and plan for the future. As Morland indicates, it’s easier to buy equipment and hire employees in the spring when you know you have a predictable number of routes and customers. Despite a standard “30-day out clause,” a contract, (aka legal document), is more binding than a handshake, and therein derives the security.
Should contractors aspire to sign 12-month-long contracts instead of seasonal contracts? The answer is, it depends. On the positive side, a 12- month contract guarantees an income year-round, despite working nine or 10 months on a property. And there are some customers who prefer to be on a 12-month billing cycle for budgeting purposes.
The Kelloggs, who have operated Grasshopper Property Maintenance for 10 years, at one time offered 12- month contracts. Char notes that some of the customers found it difficult to think about paying for mowing services when it was actually snowing outside. With pro-rated contracts, the contractor is also financing his or her services interest-free, adds Morland. As he describes it, having a 12-month contract for providing nine months of service is like paying more taxes now so you’ll get a refund later.
In both instances, you’re trading money for security. The better alternative is to have a business or financial plan that accounts for the lack of cash flow in the off season. That way, you’re getting your money when the work is completed.
Having customers pay for services when they’re completed is healthy for both the customer and the contractor in another way, Morland explains. It allows for more accurate accountability.
From the customer’s perspective, it’s easier to track what’s being done if you can compare actual costs to performance. Similarly, from the contractor’s perspective, it’s easier to perform job costing when you can compare apples to apples. That is, when you can compare costs to actual revenue.
Multi-year contracts are a different story. They can be beneficial to both parties. The contractor receives an even greater degree of security, especially important for larger properties that may require the purchase of more equipment. The customer, on the other hand, gets to lock in a fixed fee for several years. The down side for the contractor? Cost increases like that of fuel will be difficult to recoup.
Double-Edged Sword
Providing a road map and creating expectations for customers are logical steps for most contractors. Customers aren’t surprised either when they show up to provide a service or don’t show up.
The key is that expectations are a two-way street. If a contract creates them, then contractors have to meet them. If, for example, you indicate you will show up every Tuesday of the month to mow, then you truly have to show up every Tuesday — and mow.
To protect themselves from acts of nature, e.g., too much rain, contractors should include disclaimers. They may not be able to show up every Tuesday, for example, if it rains Sunday and Monday. Having a contract that details frequency of cut can be good for normal and dry seasons, but bad for rainy seasons. The alternative is to have a per mowing agreement, or include in the contract that additional mowing trips caused by excessive rain will be charged as an add-on service.
Too much detail, though, can be confusing, too. The last thing contractors want to do is confuse the customer. So keep the contracts short, detailed enough to provide a good roadmap, and clear enough so customers have a reasonable expectation of what, when and how often you will be performing services.
Tracy Morland operates Morland Landscape Resource in New Glarus, Wisconsin. In addition to providing consulting services to small, growing contractors, he also represents property owners and managers who contract lawn and landscape services.
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