Thursday, March 5, 2009

Is it time to ask vendors to cut rates?

The short answer is Yes, kind of, When Dan Greenstein brought the subject up yesterday about freezing contractor prices for 1-3 years or doing an outright cut, there were nervous coughs from the vendors in the audience. Can I afford a bidding war this year? No, Will my service come in as low bid most of the time, No. Do I make a ton of money, No, so there's no room to cut, right? My cost for fuel, tires, fertilizer, salt all doubled last year, but there was no room to double the prices. Here are 2 areas where cuts could be made. I'll focus on lawn and snow because it's the biggest part of your budget, but it could apply to anything. Here are 3 quick areas that you could look at: 1. Cutting services in your contract. We talked to a large office park last year that needed cuts. We already had a contract in place, but we went through the specs and cut out an edging, pruning and one application of fert and weed control. 2. Standard bid specs. I'm the #1 advocate for standardized bid specs. (If you don't have them, I'll send you one) Here are a few specs that can be cut that will have minimal effects on quality and minimal impacts on contractor profits. 1. Apply much around all trees (whether it's needed or not) Too much mulch is BAD for trees 2. Rough Cut 7 times per year. There's a site I'm looking at now, where I can save them $4000 if I cut it 4 times per year. There is a segment of the market that will likelyy either put off landscape care or reduce their maintenance programs. We are working closely with all our clients to prioritize the work that cannot be put off, and giving them a program tailored to their budget. It's important to maintain open, honest communications with each other. Someday we'll talk about hybrid snow contracts.

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