QUESTION: What do other companies charge for monthly rentals? We charge $85/month for regular people and $80/month for construction companies. Weekend rentals are usually the same price as monthly. We may lose some business that way but we can't do this stuff for free, and people are usually willing to pay that. I'm pretty sure the companies near us charge about that and they may charge less for weekend/one day rentals.
I want to make our customers feel like they are getting good service for the money, but we are trying to make a profit.
ANSWERs: I've added a fuel surcharge to my regular rates, now we are at $97. Weekend rates are $130 up to $230. I'd love to charge that per week, but with some of our regional companies charging $50 for the same service, it just isn't going to happen.
Maybe my math isn't correct, but here is how I look at it: Charging $80 per month comes to $20 per week. I don't know how far you're going after that $20 but let's just say the chemical, paper and diesel cost you $5, and let's say you are able to get that toilet cleaned for $10 total. That only leaves $10. After you prorate tire usage, insurance and every other bill, who do you have out of that $10? Now I don't care if you've got one or 1,000 units, that doesn't resemble anything I would consider making money!
I charge $125 minimum to deliver and set up a unit and $95 per week minimum to clean them. These prices are within a 10-mile radius of my shop plus $2 per mile if it's farther. I don't solicit rentals and let all customers know my price up front and that I'm the most expensive in the area, but all stay rented, and I turn rentals over to other companies daily.
If you feel a rate increase is needed, you can't be afraid to go up. You have to sustain your business. Everyone is increasing prices where necessary.
We offer a premium service for our portable toilets. We steam clean them, pressure wash them on route, use more enzymes, seat covers, etc., and we're only able to get customers at the lower end of the scale ($70-$90). I have a friend who gets at least $90. However, I do charge for fuel, late fees and have a four-week billing cycle.
We provide weekly, not monthly service, therefore if you're charging monthly (30 days) you're essentially giving your customers four free weeks. The worst part of it is they don't even realize the discount they're getting, so you're unlikely to sway them away from a company that uses four-week billing.
Late fees are also great, keeping my customers paying on time and increasing revenue. I used to have many customers who wouldn't pay their bill on a monthly basis. With late fees I only get 2-3 customers who get so far behind that I cancel service, down from 15-20.
How far in arrears do you let them get before you suspend service? Do you stop servicing the unit and wait for them to call? Do you simply pick it up and cut your losses? Do you call them and tell them you will not service their unit until payment is made?
Two billing cycles (three months) is my max, I post bill because I don't want the extra hassle of refund checks. Here's exactly what we do:
When taking an order (especially from a new client) we get their credit card number. We say that it's an anti-theft measure (you are putting your property in someone else's hands after all). On the second month we send a warning letter. On the third month, we will cut service without a payment, send them a letter notification with their invoice. We also charge late fees for every month they missed. There really is no excuse because our customers can pre-pay if they want to.
A deadbeat client isn't your friend. He's your foe. Not only didn't you get your rental fees but you've paid out to service their toilet. You'd have been better off not having them as a customer! Last year to date I lost around $20,000 in revenue due to deadbeats. This year I've lost $5,000, and I've also increased accrual revenue by 25 percent. We're a medium size company so that's quite an achievement.
I take care of the problem one way or the other. Take a customer who runs behind and double their bill. When or if they complain, explain that they have put themselves on the late payment plan. You win either way, but it's their choice.
I have a grease trap customer who started with me paying by check every month. They wanted to start sending a check, but they came later and later. Years later I only get a check two or three times per year, but I now charge $975 per month. This is my extreme case, but I do have several customers paying double and a few paying triple. The few customers I lose, well, you really haven't lost anything.
