Commercial Lawn Care Contracts: How to Price, Bid, and Win Them
Every lawn care service provider needs to choose between residential or commercial clients at some point. While many choose to go the residential route, commercial clients can offer a lot of awesome benefits of their own.
Aside from generating larger jobs (with larger payouts), commercial clients often outline their exact expectations in a contract, making the work relatively straightforward.
Their contracts also cover longer periods of time, which means guaranteed ongoing work.
If you decide to go into commercial work, you’ll be working with property managers and real estate boards.
So, you can expect less special individual requests––typical of working with individual homeowner accounts.
We spoke with lawn care expert Ed Ramsden of Enviromasters Lawn Care to get the low down on commercial contracts.
The advantages of working on commercial contracts
“I always liked commercial work because you’ve got a contract. You know how often you’re supposed to visit in a month, what height you’re supposed to cut the grass to, what your responsibilities are, and what your responsibilities aren’t,” Ed explains.
Your client will be clear about their expectations, so your focus should be making note of that, and giving that information to your crew. If something goes wrong, there is inclement weather, or you need to return to finish the job, all you need to do is talk to the property manager.
So long as you care about their property, build a relationship, and do what they ask, you’re golden.
Since you’re dealing with a professional business, getting paid is a bit more predictable. That means you’re not waiting for paychecks, and you don’t need to re-send an invoice. It’s very straightforward.
How to get started with commercial lawn care contracts
Commercial lawn care contracts are centered around building relationships. From the very beginning, you should be focused on getting to know the property managers and real estate board members in your service area.
1. Make contact with them.
You can do this through phone calls, emails, postcards and flyers, or meetings.
Even though some property managers won’t necessarily be looking for a contractor right now, they might be in the future. The objective is to build a relationship so you can ensure you’re the one who gets the job.
2. Make sure you have quality references from previous clients.
Ed explains that referrals are one of the most important parts of landing commercial clients.
“If they offer a fixed contract, they’ll want an established company for it. They’re not just going to hire anybody to do it. They want to see a reputation.”
Most commercial clients will want to call the property managers you’ve worked with in the past. So, tailor the references you give based on the client for the best results.
For example, if you’re trying to land a contract with a condo property manager, try to find a referral from another condo property manager you’ve worked for before.
How to get started without commercial experience
If you don’t have referrals yet, Ed suggests getting your lawn care name out there by doing some basic industry discovery:
“Start reaching out to commercial property managers and ask if they’d mind giving you some advice. Ask them what they like and don’t like about their current service providers, current process, and if they have any tips for someone just getting started in commercial lawn care.”
Ed explains that you should start by assuring them that you’re not trying to win their business, but just trying to learn about the industry.
A lot of property managers know each other and manage more than one property. Ed advises that “once you get your foot in the door and your clients like your work, you can talk to them and see if they have any more land, friends who have land, or other buildings they manage.”
How to price commercial lawn care contracts
“For commercial properties we bid per hour. I walk the site, get the client’s requirements and decide how long the job will take.” From there, Ed decides how much time, labor, and equipment it will take for his team to do the job.
Whether it’s a multi-property job on a new development or a maintenance job for a business block, knowing how much time to commit to the job is essential.
Doing a walkthrough of the property is an essential first step. It will also help you to get a clear idea of the client’s needs, and any special procedures the property might require. If they have a lot of requirements, you might discover that the job takes more time, even if the square footage isn’t huge.
Labor is what you charge customers to staff a job––what you pay your workers per hour.
Aside from the wage you want to pay your workers, you also need to add in your hourly rate as the business owner.
For example, you charge $45 an hour for each employee. They take home $20, you take home $20, and allocate $5 for business costs.
This huge component to pricing out a job is often overlooked.
Always remember that commercial jobs tend to require more staff on site due to the scale of the project. Make sure you know how many people you’ll need to complete a days work before moving forward.
Commercial lawn care equipment is typically more expensive than residential equipment. It needs to be able to handle larger-scale jobs at different job sites. Maintenance and repairs should be top of mind all the time.
Your equipment costs are a big consideration when determining your pricing.
According to Ed, you can (and should) charge an equipment fee (as a flat rate or percentage) on top of every job.
You also need to price in the labor required to run that equipment too. He says, “you’ll want to buy something new eventually, so you do need enough profit off your equipment to do that––even if it’s a couple dollars a job over the course of a year.”
This should cover maintenance, repairs, and eventual replacement of the equipment you’re using.
Ed thinks about it this way: “I consider how much my equipment is worth to me. For example, I charge out a lawn mower $120 (all in for my employee and my mower).”
Here’s how Ed prices his commercial jobs
“After a walk around, I might decide that a property will take an hour and a half with three people. I will need one truck and one trailer, so I’ll build out the quote like that. So three people on the site means I’ll bill them out at $45 an hour, $45 per employee. There are three employees, so that’s $135 for the job to start.
Then I consider what equipment I’ll have on site. I charge two times the hourly rate of labor just to have the staff on the site. About $5 of my price ends up going to my equipment overhead.”
If you have little experience with pricing commercial contracts, take Ed’s advice and follow the same approach you would with residential clients:
“Figure out how much time it will take you to do a commercial job, and then think about much money you’d make on a residential job. Say it’s an hour and a half. If you normally do three residential jobs and bill them at $50 per job, you should be making $150 an hour to do that commercial job, or very close to that.”
How to bid on commercial lawn care contracts
To bid on a commercial lawn care contract, you need to submit a formal quote (or proposal) to your potential client. This should include all the items discussed during your walkthrough as well as taxes, fees, discounts, etc.
Commercial lawn care contracts work like this:
- You complete a walkthrough with a property manager
- Create a proposal that includes a quote for the services you discussed and submit it
- The property manager reviews proposals from every service provider and chooses one
- They have you sign a contract that they supply before you get started
Don’t overlook the importance of providing an accurate quote during this process.
The property manager will use it to determine which bid is the best choice for their budget. In addition, your quote will set the price for the entire contract. If you’re off by a couple dollars, it could mean that you lose out on a lot of money throughout the duration of the job.
At the end of the day, Ed explains: “Commercial clients really care about the price. Some want the lowest price possible, some want a balance between the quality of work they get for that price.”
Keeping commercial clients happy
Most commercial clients are considered “easy” clients because their property manager is the main point person in your relationship. They have few demands, and generally just want those boxes checked and their expectations met.
The best way to win these types of clients is to show them that you care, that you’re doing the job properly, and that you’re not missing anything.
That means that you need to keep track of the notes you make on their account, and ensure that your crew completes all the work they want.
From the start you should make notes of the job requirements during the site walkthrough with the client.
Using quoting software, like Jobber, helps you to add materials, services, and labor as you go so that you don’t have to worry about remembering to add them later on.
Your secret weapon in keeping your client happy will undoubtedly be your CRM (to keep notes on your client accounts) and job checklist (to ensure quality of work for each site visit). That way, you never miss a step with each phone call, email, or site visit.