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Creating Contracts With Clients

Mar 23, 2019
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Vacaville, CA
www.commercialcleaningvacaville.com
Real Name
Brianna Driggs
Business Location
United States
Hello everyone! I've just launched my business and wanted to know how you tackle possible longer term contracts to get more cashflow in right away. Seems like I shoudl be able to sign someone up after a free week trial and then get them on a monthly agreement but have them pay for 12 months up front?

How have you all structured your deals? Any deals that have worked well for you or incentives for them to go with you over another competitor? Anything helps, thanks!
 

Luky

Well-Known Member
Nov 29, 2013
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Chicagoland
Real Name
Marian Lukacisin
Business Location
United States
Hello everyone! I've just launched my business and wanted to know how you tackle possible longer term contracts to get more cashflow in right away. Seems like I shoudl be able to sign someone up after a free week trial and then get them on a monthly agreement but have them pay for 12 months up front?

How have you all structured your deals? Any deals that have worked well for you or incentives for them to go with you over another competitor? Anything helps, thanks!
Are you referring to a SS system? I believe that concept is doable, but.. Are you aiming for a janitorial contracts? Carpet cleaning?
Are you reversing history? Most commercials like net 30 45, 90. What are the incentives that would prompt them to sign such contracts?
So, should I go to my supplier , pay $ 1000 upfront and demand discounted products on as needed basis until balance is exhausted ?
 
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PistolPete

Well-Known Member
Sep 28, 2014
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Peter Dymond
That's the question you need to answer.
From the customers perspective, what's in it for me?
Most contracts are structured; you do the work, customer pays invoice. The agreement is you keep doing the work, they keep paying you.

To get someone to pay in advance is a hard if not impossible sell.

Where is their guarantee that after paying you in advance, you show up?

Now if you're proposing an annual contract for quarterly cleaning with the 4 bills broken down into 12 monthly payments then that would work.
But it would be you extending credit for work completed today into 3 future payments.

The advantage for the customer is steady billing at a lower cost vs a big bill.
The advantage to you is steady income.

Some landscaping contracts are written that way.
In the summer you get weekly service, in the winter you get once a month but the bill is the same.

The challenge is cash flow when starting up because you will be doing jobs upfront without full payment.

The only way to get a customer to prepay or early pay is by incentive, which is usually a discount.
I don't see that as a great model because janitorial or commercial contracts are extremely competitive.
You don't want to end up with a bunch of no profit contracts.

Just my 2c
 
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