What Type of Payment Should I Take in My Lawn Care Business?
June 16, 2021 – Episode 21
Join Frank in the studio this week as he answers the questions, What type of Payment Should I Take in My Lawn care Business.
Frank discusses why credit cards are the best option for taking payments and how taking cash and checks wastes your time and money.
Lawn Care Frank:
You’re not sure what payment methods you should be taking? Stay tuned. We’ll discuss that in this episode.
Announcer:
Welcome to the Lawn Care Frank Podcast! Where we help lawn care professionals, like yourself, start and grow their business. By tackling obstacles such as finding customers, hiring talented people, spreading brand awareness, and much, much more. And now your host…Lawn Care Frank.
Frank:
Are you kidding me? Are you telling me you don’t like chasing your money? You’re kidding me right? Why, I tell you what. I don’t like chasing my money. So, we’re gonna go into this in depth, right? So, you’re just starting out. You’re a new lawn care company. This is your first lawn. Mrs. Jones comes out and she hands you $50 cash or $25 cash. Whatever it may be. Is that a good thing or is that a bad thing? In my mind it’s good and bad, right? But as you grow your business you really want to get away from taking/accepting cash or checks. You really want to streamline your business and take credit cards only. That’s the way I do it and we’re gonna go in depth about why I recommend this.
Interviewer:
So, I’m thinking of the old saying “cash is king”. Why are you telling us that it is not acceptable or is not a good thing to take cash from your customers.
Frank:
Let me give you a great example of why cash isn’t king when it comes to a transaction in lawn care business. So, let’s say you’re a solo operator and we’re just gonna say this is, you know, you’ve got 5 lawns right? So you’re just starting out, you’ve got 5 lawns. And you do your first lawn and you’re expecting payment. So you just wrapped up your whole you know mowing, edging, weed eating, and blowing. You’re ready to go. Typically you can just get in your vehicle and go off to your next lawn. But not in this case. Now you’re going to go up the stairs, you’re gonna knock on the door and you’re gonna wait. Mrs. Jones, maybe she didn’t hear, maybe she’s in the shower. Whatever it may be, so you give up. Cause it’s been 2 minutes or whatever that you knocked and nothing happened. So you go back down to your car…oh here comes Mrs. Jones and you go back up and you discuss it with her and she goes oh yea let me go get your payment. So she goes and gets you your payment and then she has a 5 minute conversation with you on top of that. So now we’re into this for like 10 minutes and let’s say that’s all it is. 10 minutes. And you get in your car. And you go ok now I’ve got to punch in the next one. So, let’s just say this whole transaction took 15 minutes. Right? Now we gotta really figure out how much that 15 minutes was worth. Right? Or in this case, how much did that 15 minutes cost you? Because if you were down the road going to the next lawn that 15 minutes could’ve been utilized mowing the next lawn. Are you following me?
Interviewer:
So Frank, you just explained how that 15 minutes would cost me money but could you get a little more specific and break it down on the per man hour basis and how that 15 minutes cost me additional income?
Frank:
Absolutely! So, let’s just assume that in your business where you’re at you’re trying to accomplish $45 per man hour. Right? So, I’m trying to make $45 per hour. Per man. Right? If I’m a sole operator, then that would be $45 per hour, right? So, let’s figure out how much that 15 minutes equates to as far as a dollar amount. So, 15 minutes would equate to I believe it’s roughly or exactly $11.25. So, what does that mean right? What that means is by that whole transaction of going back and forth talking to Mrs. Jones, getting the collection, waiting for her. That cost you $11.25. Now that wouldn’t have cost you anything or it would have cost you a 3% transaction fee when they came down to it as far as if you used a credit card right? So, if you mowed that lawn and that lawn was let’s say $35 you just cut into your profit by $11.25. Right? We have $35 that we’re charging for the lawn. This waste of time cost us $11.25. So really, we didn’t make $35. We made $35 minus $11.25. Whereas if you were able to finish your work. Get in your truck or your vehicle and go off to the next lawn we would have saved that $11.25, right? So, if you’re charging with a credit card, let’s say you have a 3% transaction fee. That $35 that transaction fee is gonna equate to like $1.05. Right? $1.05. Right? $1.05 from $11 that’s like $10 that you’re gaining by using a credit card right? So that’s what I recommend. Get the credit card payments on file and that way you’re more efficient and you’re not dealing with cash and checks. And there’s obviously other reasons you don’t want to do cash and checks.
Interviewer:
And I know you do like to get a customer’s credit card on file like you’re saying for that revolving charge but let’s say I am brand new to the lawn care service business. How do I get set up taking credit cards if I don’t know how to do that?
Frank:
Well, you wanna make sure that you have a good system in place like Yardbooks is a pretty good system. I’m not affiliated with them or anything. So that’s one of the softwares that seems to be pretty good and you can take a credit card. You can also do a merchant account through quickbooks and you can charge credit cards that way. And there’s always other options like venmo and those kinds of things. I like sticking to a nice clean merchant account and again you can use Yardbooks to get that started for you.
Interviewer:
And I want to go back. You know talking about cash but, same goes true for taking a check. If you take a check that’s bad or bounced whether it’s inadvertently or on purpose, now you’ve got a big time suck I guess you could say on getting that money?
Frank:
Absolutely, so a check is even more of a time suck and more of a financial suck right? So, and the reason for that is you know with cash it’s not gonna bounce. With a check you have the potential of it bouncing. And the bad thing with checks when they bounce, you don’t know for about 2 weeks. So, you might be in the hole not only for that mowing but you might be in the hole for the next one. Because what if that’s what they do? You know? And I’ve run into that before whenever I first started. I had a customer where she bounced 4 checks and blamed it on the bank. And even if it is the bank’s fault it’s still a time suck for you right? You’re chasing your money. You’re wasting time. When in reality what you should be doing is concentrating on more customers. Concentrating on more marketing. Concentrating on more production, right? We want to be able to produce more and the only way we are going to do that is having more time. So the last thing we want to do is chase our money.
Interviewer:
When you get the customer’s credit card on file do you usually do that over the phone? Do you go in person? How do you go about to get their credit card on file?
Frank:
So, when it comes to you know getting a credit card on file. Obviously, you want to look with your merchant, talk to your merchant. And they have some rules and regulations that you have to, you know, follow. That’s the best way to answer that question. Follow what your merchant wants you to do. Right? Some of them may not allow you to get the information right over the phone. Some of them might want you to send a link or whatever it might be or an authorization form that they might have to fill out on the first visit. So, get with your merchant and figure out what their policies are and you want to make sure that you follow those to the “T.”
Interviewer:
Are there any other stories you’d like to share with us about taking cash or checks vs. the credit card?
Frank:
Sure. Let me share this store with you. When it comes to cash I remember going to one of my customer’s house and we weren’t doing the mowing service we were doing other services but and we don’t accept cash we don’t accept checks we strictly credit card. But I remember going up to the house and they had an envelope that said payment for lawn mowing. And it was in an envelope taped to the door. Right? So again that’s not a good thing right? Because that money could,you know, be taken by anyone. And that’s just not a good thing for you as the service provider because what that does is waste your time. So if somebody snatches that now it’s you going back and forth with the homeowner. Hey, I didn’t get payment. Oh I put it on there. Are you sure, yea I am sure. And you’re going back and forth. Wasting time. Again, I encourage you from the start, really evaluate how you want to take your payments. And I highly recommend you stick with credit cards.
Interviewer:
Are there any other closing thoughts you’d like to leave us with on this subject of taking credit cards vs cash or checks?
Frank:
I want to add a couple things when it comes to accepting cash and checks. The other thing that, you know, you have to worry about cash or check, primarily cash is a security breach. Right? So, you have to worry about whether you’re gonna get robbed. Or as you grow your business the last thing you want for your employees to handle is cash or check. Another thing is cash or checks can get lost. Right? So, we don’t want to deal with that also. So, in summing things up it really all comes down to your time. Right? So, do you want to spend time chasing your money or do you want to spend time marketing, selling, and production? Right? That’s how you grow your business. So, when you do this in a way where your payment is becoming streamlined then you can concentrate on the more important things and that’s growing your business. Thank you for listening and I will look forward to engaging with you in the next podcast. See you next time lawn care pros!
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