Performance-Based Vs Hours-Based Contracts
As budget season draws to a close you have or will likely be reviewing contracts for a variety of services at your property or community. As a landscaping contractor we work with property managers, board members, and property owners every single week as we negotiate new contracts for our clients. One of the questions that comes up from time to time is, “how many hours will “X” price get us?” The cost vs reward benefit is not as simple as “contract dollar amount will get us ‘X’”. Performance based-contracts are better for a variety of reasons, and I want to outline some of them here.
Imagine that you don’t have to direct your landscaper to do tasks, you don’t have to hold their hands to ensure your property looks great, and at the end of the day the place looks fantastic, and when a promise is made to get something done, it gets done. What kind of company would that be? How much easier would your life be?
In starts with honesty about the contract, pricing, profit margins, and execution of the work.
The truth is, landscaping is seasonal. We make money in the winter, and we make less money in the summer (sometimes we lose money!). Plants grow a lot more and a lot faster in the warmer months of southern California, and so more labor is generally required to consistently maintain your landscaping well.
In traditional hours-based contracts, payment to the contractor is based on what was used, how many hours were worked, and other similar factors. Instead, performance-based contracts allow the client to set performance indicators the contractor must meet when completing services. In other words- you pay us to do a good job.
In a performance-based contract we provide a price to ensure that we meet the expectations of the board, industry standards, and proper irrigation management. This is accomplished by defining the outcomes of the contract rather than focusing on the ‘how’. We can provide better service, higher performance, and lower costs by using a performance-based contract.
If you are considering making a change in your landscape maintenance, we would be happy to help in that process. Contact us today and we can work together on creating a win-win landscaping maintenance contract for you and your property!