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JP Landscaping
02-19-2010, 11:49 AM
Take this scenerio for instance:

Lets say you pay your employees $10 and hour and in 1 hour your employee can mow 2 lawns on average. You are paying them $5 per lawn gross pay.
If they work 8 hours a day. you pay them $80 gross.

If I was that employee, and not thinking too deeply, I would figure I can charge $10-$15 per lawn and make 2-3 times as much money as I was making and still be charging 1/2 to 1/3 of the competition.

i know you may be thinking, "he's gonna be broke in no time!"

But consider this, I had a friend who's uncle gave him a brand new riding mower with a ton of attachements (including snow blower), trimmer, blower, etc. because his uncle owned an equipment store. uncle wanted to claim a loss somehow.

Well this friend already owned a pick up and small trailer, big enough to put the mower in.

This is almost the perfect scenerio for him to be able to start his lawncare business charging $15 per lawn. (He was only making $8.50/hr at his factory job)

I mean, this is probably why there are many new competitors trying to charge so low...they figure, i already have equipment to use, my overhead is low since I'm not gonna pay insurance or register...or even if they did, it doesn't cost much to at least register.

Get this... so lets say a LCO pays 65% overhead, 20% company profit, and 15% owner profit. out of a $30 lawn that's $19.50 for company costs.
the company and owner combined are only making $10.50 on the lawn.

I think it's possible for someone in this situation to charge $15 for the same lawn that a larger LCO would charge $30 for and still make about the same amount of profit. That's about $30 per hour if he does 2 lawns per hour. I know of landscapers who charge $30 per labor hour and that includes their overhead.

What do you guys think??

Lets analyze this: what would be his costs?
- basically his operating costs (variable)
gas, maintanence, administration, ??
- his fixed costs would be pretty low
: registration, insurance, adv, what else??

CHEESE2009
02-19-2010, 01:39 PM
Situation A:

A guy charges $10.00 a cut & finds loads of work almost instantly, but can only handle 50 customers being one person.

This guys business makes $500.00 a week


Situation B:

A guy charges $20.00 a cut but only has 25 customers, he can STILL handle 50 customers, & already he's making more than the guy from Situation A.

This guys business makes $500.00 a week, & he also does half the work.


Guy in situation A does not make enough money to grow, or to make his business "work for him".



Pros of advertising low prices:
You will be instantly booked with customers

Customers can be replaced easily

You can build relationships with your customers, & charge them more over time. Though so can the guy from Situation B. Not really an advantage, but it's what I'd recommend.


Cons of advertising low prices:

You aren't making a profit, you are just "getting by"

Expenses are difficult to cover & are able to jeopardize your business

Work is generally just a hassle & isn't worth doing

JP Landscaping
02-19-2010, 02:05 PM
I agree with what you are saying. If you can charge double and get half the work it's a better way to go.

but what do you think about the situation where your expenses (at least the start up expenses) are much lower than the competition and therefore allows you to charge much less than the competition?

Like i had written, a company charges $30 for a paticular lawn based on the company's overhead and desired income. but if company A has 1/3 of the expenses of company B and desires the same income, then company A can charge less and still make the same amount of profit.

It's like having two companies with the same equipment, lawns, and expenses,,etc. But if company A is more efficient than B, A can charge less and make the same profits because of their effeciency.

Similar in my example, if you can lower your expenses, then you are able to lower the price you charge. Starting out with free equipment is a huge competitive advantage!

*wish i had an uncle like my friend's*

CHEESE2009
02-19-2010, 02:55 PM
but what do you think about the situation where your expenses (at least the start up expenses) are much lower than the competition and therefore allows you to charge much less than the competition?

Then use it to your advantage by not charging less. It's better to make it count.

That's like saying, "my business doesn't have to pay $100.00, so I don't need to make $100.00"

what better time to make a buck than now? No expenses = maximum profit.

Like i had written, a company charges $30 for a paticular lawn based on the company's overhead and desired income. but if company A has 1/3 of the expenses of company B and desires the same income, then company A can charge less and still make the same amount of profit.

It wouldn't necessarily be a profit. At the end of the day, the other company has you beat because it's doing half the work, when you could be to.

You could easily be ahead of them by charging more & doing half the work just like them, & you'd make more $ than them because your expenses allow it.

It's like having two companies with the same equipment, lawns, and expenses,,etc. But if company A is more efficient than B, A can charge less and make the same profits because of their effeciency.

You wouldn't have to rely on efficiency if you charged more. Imagine if you charged more & were still more efficient than them? That would be wonderful!

Similar in my example, if you can lower your expenses, then you are able to lower the price you charge.

You could, but why would you want to lower the price? That's going backwards & it's basically saying no to great profit. You'd be filling your days up with cheap work when you could be making big bucks, using the advantage of free equipment & less expenses.

It's like saying no to a promotion, you could double your hourly salary, hire a helper, afford new & better equipment. Why not take advantage of it?

You have two choices:

a) Make $1000.00 by cutting 100 lawns (no room to grow)
or
b) Make $1000.00 by cutting 50 lawns (a lot of room to grow)

With b) you can even work as hard as a), & do 100 lawns but make $2000.00 instead!

Think about it.


Starting out with free equipment is a huge competitive advantage!

It is, but it doesn't mean you should ignore investing in repairs or replacements. Charging more will save you the headache of major & random expenses.

When that mower breaks, wouldn't you be happy knowing that most of your income wont be lost?



*wish i had an uncle like my friend's*

Me too, my uncle is a cross dresser.




I have been in your shoes & wondered why the heck shouldn't I charge less?

I figured out that in the long run, I would be missing out on a lot if I had done so.

Sure I could gain loads of customers, but they wouldn't be worth anything.

The customers wouldn't provide me with the things I'd need to make even more money.

More money = *insert everything you want & need*


Also, I do think it would be wise to split up your customers.

Go out & grab 25 $10.00 customers, but work hard on getting 25 $20.00 paying customers.

If you want to charge $10.00, try to make it as profitable for you as possible.

An example:

You have 4 customers who pay $10.00 a cut, they all live on the same street = Profit, you don't waste gas & time.

If your customers are all scattered, you'll be spending $10.00 on gas getting to the next lawn, lol.

... someone stole one of my shovels today... :( lol





A silly example…

Imagine a person was on a game show, & he’s picked to go into a room & grab as many $100.00 bills as he can within 50 seconds.

Wouldn’t you grab all that damn money & murder whoever tried to stop you?!

Anyway,

Imagine this person refusing to go into the room, because he makes as much money as the crowd in the audience.

MountainViewGreenskeeper
02-19-2010, 03:00 PM
I have to say your both right. You want to be in a position to charge as little as possible (to get the pros as you stated)you should also want to be able to grow/expand regaurdless if you do or not.

CHEESE2009
02-19-2010, 03:23 PM
Another thing...

If your competition charges $20.00, don't charge $10.00.

Charge $19.00 ;) Lol!

...

I have to say that we are both correct too. The plan he had stated is possible for the individual. For me, I would do it but adjust my price as required over time.

If I feel like growing, I'll up my price the next season. Though the advantage of already having money is a beautiful thing & great for emergencies.

The plan for me is to have less work on my plate & to generate more profit by hiring employees.

A good price on my service is what will make my plan work, & happen fast. You have to think ahead & know what you want, & when you want it.

Just think, an extra $1000.00 can get you an employee for 100 hours or more... Might not sound like much (it is), but it's $1000.00 you never had & are willing to give away anyway.

Imagine if you could afford to have an employee for longer, how easy your life would become & how you could use him/her to profit. Use them to take on more work, as you maintain the work you already have. You pay them less then they make for the business & you got yourself a money making machine.

I sounded like an a-hole right there didn't I? ^^^ lol

###########
Holy crow... Now you got me thinking...

I should charge a few customers less & get a crap load of clients & just have employees handle them. The only downside is that I can't avoid the stress they (the customers) will bring.

I can have an entire two-sided business, my big money maker side, & the slow money generating side which I can run across the town. But then knowing me I'll say, "why not have 2 good sides" damn.

Your turning me into a hypocrite!!! LOL

Though I did do something similar with garden weeding.

I had an employee do my garden work, she made $80.00 for every $100.00 I charged. I did this because she was an awesome worker & I knew she needed the work, what do I care anyway? The business still profits (minor) & don't have to get my hands dirty :) (my hands are usually already dirty, but you know what I mean!)

ritchiem
02-19-2010, 06:23 PM
This situation may work if they still lived with mom and dad :D

CHEESE2009
02-19-2010, 06:50 PM
This situation may work if they still lived with mom and dad :D

basically lol.

Another bit of advice would be for this person to set a goal, try to afford future expenses wants & needs, before the last minute. Plan out how you want your future to look like, & form your business around that.

Maybe you want a house, a family, etc... $$$ A fraction of your income should go towards the things you want. (Disney World, Animal Kingdom Lodge:o)

Extreme long term, I kinda wanna let Breeze grow & be self sufficient, then I can open up another business elsewhere.

I can call it "Cheese Lawn Service" joking...

I can travel to different areas & have fun building both businesses. I'll be dead before I reach that point if I charge low, though.

JP Landscaping
02-19-2010, 09:30 PM
this is good analyzing...

When I first started I also thought of the competing on price and in a way I had to because according to my former management college professor... you compete either in price or quality.

No one knew my work so in order to attract attention, i had to compete in price. And I think it's what most starters do- they're kinda forced to.
But as soon as you can show your quality work and have some references to back it up, then you should get out of the price competition because in the long run it's bad for the industry.

You're right Breeze, it's a good idea to get a handfull of those quick low paying customers to at least break you even while you look for the high paying customers. (finance-diversification is safe). Because if you spend all your time and effort trying to get the high paying customers as a starter with no recognition then you're going to find that this world is tough.

**To clarify that was a scenerio and I wasn't lucky enough to be the guy getting all the free equipment lol **
So how big of operations do you guys have? 1 man... 1 crew...a few crews?

CHEESE2009
02-19-2010, 09:55 PM
I'm a one man show for lawn maintenance but I have someone I hire for the odd months. I'm only going to hire another person full time if he can take on his own route alone (50 customers), then I can worry about finding him a partner & they can do 100 customers a week. It'll cost me $14,400.00, but the profit I'd make from them should be $27,600.00-$30,600.00 after I deduct their entire pay for 6 months work. I wouldn't know about finding myself a partner, I might want to just focus on garden work with my extra time.

I'd probably get into doing snow removal like a champ, well at least I'd fund it, but someone else would be riding the tractor. I honestly never liked doing it & enjoy panicking too much as some worker running off & destroying my new tractor. ;)

All of the above is me dreaming, eventually my time will come.

Other than that, I have a full time garden maintenance employee. lol

psparaco
02-19-2010, 09:57 PM
I would never in a million years charge $10 a cut. the lowest i've ever charged is $20. ok sure 10 bucks more. but keep in mind. the properties i service are all rental townhomes. middle of group townhomes have about 900 sq.ft. of lawn for 20. end of group had about 3500 sqft and takes me an extra 5 min to do the overall job. i am a 1 man crew and sometimes 2 when my fiance helps me during the school days while our daughter is in school. alone i can drive to the property (2-4 min form home) unload(2 min) trim (3-5 min), mow (5-10 min), cleanup (2-3 min), load my equipment back in my car (2 min) and we off to the next property which is usually 30 seconds to 1 min away and sometimes as i set up my routes. i park my car and knock out 4 lawns in one chunk. so on average i spend 16-26 min per property if you add up the total time amounts. if my fiance helps me. cut that time in half. she usually mows while i trim and cleanup on several properties all within feet of each other. the luxury of doing townhomes. i didnt base muy price off nothing but just deciding from the git go. 20 middles, 25 ends. last year i had 22 clients. this year i have 19 ( from last year) 3 people canceled my service cause they moved to where they didnt need a lawn guy.

Steve
02-20-2010, 09:24 AM
Would charging this rate allow for having business insurance and paying taxes or is this concept based on doing everything under the table?

Also what are you thinking one could make as a salary at the end of the year charging such rates?

JP Landscaping
02-20-2010, 10:40 AM
Here's something to think about. Take out the purchase costs of your equipment and trucks (but leave the maintenance and operating costs of operating them)from your overhead costs and see how much you would be able to charge and still make the same amount of money.

In other words, if those trucks and equipment were given to you for free. Example: you get a government grant and use that to buy your equipment.

SuperiorPower
02-20-2010, 11:41 AM
Some figures to think about: Say you charge $10 per yard x 50 yards x say 40 cuts per yard per year (i know, it depends on your location), you gross $20,000. Then subtract gas, maintenance, etc, you will not be making much money. If you charge $20 per yard I am guessing you could still have most of those yards and thus make about twice as much money.

It matters not that he doesn't have to pay for the equipment the first time. He still needs to look at their "selling price" as expense. Then he can add this much value to his gross profit. Eventually he will have to replace this equipment. For that reason he needs to be charging enough so that he can place their replacement funds aside to be ready to purchase the equipment at that time.

There are several recent threads about overhead expenses to look up. All of these threads have in depth conversation about overhead, how to figure it, etc. I have posted at least 2 different overhead calculators to help with overhead expense calculation. I will attach the most recent one again.

Hope this helps,
Eli

picframer
02-20-2010, 01:34 PM
It matters not that he doesn't have to pay for the equipment the first time. He still needs to look at their "selling price" as expense. Then he can add this much value to his gross profit. Eventually he will have to replace this equipment. For that reason he needs to be charging enough so that he can place their replacement funds aside to be ready to purchase the equipment at that time.

There are several recent threads about overhead expenses to look up. All of these threads have in depth conversation about overhead, how to figure it, etc. I have posted at least 2 different overhead calculators to help with overhead expense calculation. I will attach the most recent one again.

Hope this helps,
Eli

There is no way on earth one can cut lawns for ten bucks and make a profit even if you walked to the customers site, calculate depreciation into this i.e. replacement costs of the mower, trimmer and blower, I amportize everything for mowing except the tractors over two years, I have 169 clients and there is no way on earth I could do any of them for ten bucks, I woun't even attend a lawn that is under $25.00.

JP Landscaping
02-21-2010, 12:48 AM
very good points... but I think you can make a profit in the right situation..you just won't make a as much profit as you should be making. Well at least until you have to replace the equipment you got for free. but like I read before, if you maintain your equipment right, it lasts.

take this...the employee earns $10/hr. If it takes 30 min per lawn for a $30 lawn, then he gets paid $5 per lawn.

At this rate he can mow 16 lawns in a day or 80 possible lawns mowed in 40 hours or 1 week. if you consider 35 mowing weeks in the season, that makes 2800 mows for the season.

if he charges $15 per lawn (half of his boss) he will gross $42000 for the season.

as an employee at $10/hr ($5/mow avg), he will gross only $14000.

True. out of those 42000 he has to take out OPERATING expenses (to keep it simple)

Gas ($4/lawn) 11200, truck insurance 300, biz cards he printed out 50, maintenace 1000, Liab insurance 800, business registration 100,printing paper and ink 80,
- total = 13530 lets round it to $14000 in case we forgot something

- So 42000 - 14000 = $28000 gross
- That's twice as much as he made working for his boss!

as far as saving for equipment, You wouldn't expect to replace your equipment the first year, and if you do, then you can send it to warranty.

Now we're saying this is a one man operation, Two mowers (a good one and a back up one), two trimmers and a blower. How much can all this equipment cost to replace? not 14000 a year.

lets say you spend 5 grand on this equipment and you expect it to last you 5 years. then you can set aside 1000 each year (depreciation) for when you have to replace it...that still leaves him $27,000.

Now is he making a profit? If his opportunity cost for the time spent working for his boss is $14000 gross, I think he is making profit.

What do you guys think?

jasonw
05-06-2010, 09:53 AM
Take this scenerio for instance:

Lets say you pay your employees $10 and hour and in 1 hour your employee can mow 2 lawns on average. You are paying them $5 per lawn gross pay.
If they work 8 hours a day. you pay them $80 gross.

If I was that employee, and not thinking too deeply, I would figure I can charge $10-$15 per lawn and make 2-3 times as much money as I was making and still be charging 1/2 to 1/3 of the competition.

i know you may be thinking, "he's gonna be broke in no time!"

But consider this, I had a friend who's uncle gave him a brand new riding mower with a ton of attachements (including snow blower), trimmer, blower, etc. because his uncle owned an equipment store. uncle wanted to claim a loss somehow.

Well this friend already owned a pick up and small trailer, big enough to put the mower in.

This is almost the perfect scenerio for him to be able to start his lawncare business charging $15 per lawn. (He was only making $8.50/hr at his factory job)

I mean, this is probably why there are many new competitors trying to charge so low...they figure, i already have equipment to use, my overhead is low since I'm not gonna pay insurance or register...or even if they did, it doesn't cost much to at least register.

Get this... so lets say a LCO pays 65% overhead, 20% company profit, and 15% owner profit. out of a $30 lawn that's $19.50 for company costs.
the company and owner combined are only making $10.50 on the lawn.

I think it's possible for someone in this situation to charge $15 for the same lawn that a larger LCO would charge $30 for and still make about the same amount of profit. That's about $30 per hour if he does 2 lawns per hour. I know of landscapers who charge $30 per labor hour and that includes their overhead.

What do you guys think??

Lets analyze this: what would be his costs?
- basically his operating costs (variable)
gas, maintanence, administration, ??
- his fixed costs would be pretty low
: registration, insurance, adv, what else??

This was probably already covered but I didn't read all the reply's. At %50 or your revenue going to expenses I think they will be out of business in no time. At the same time someones uncle who gives away equipment to claim a loss is both a crook and not a good businessman so chances are he is out of business or shut down anyway. A minimum I like to shoot for is no more than %15 expenses. So far I am able to beat that target. Hopefully it stays that way.

The Cleaning Doctor
05-06-2010, 11:07 PM
Not to mention that as a self employed person you also have both sides of the income tax and SS and FICA to pay.

Not taken into account is invoices, rain delays, non payers etc.

JP Landscaping
05-06-2010, 11:22 PM
ok but self employment is 7.65% additionally to the 7.65% that would be deducted from your pay if you were an employee anyway. So 1 yard out of the day's bunch would pay for that.

I still think in the right situation you can make a profit charging $15 per lawn that would take you about 30 minutes to complete. I know landscapers who charge $30 an hour and they have more overhead than would be needed.

lets say you buy a used self porpelled mower in good condition for $300. A trimmer and a blower for an additional 300. if you already have a truck, then you are set for business.

What would be your overhead?

You are already paying insurance for the truck so you don't need it.
you would have gas, maintenance (wouldn't be much for a 21'' mower, etc), advertising, and depreciation of equipment.

jasonw
05-07-2010, 01:41 AM
7.65% are you kidding me? where are the taxes that low? I am taxed about 22.5%.

SuperiorPower
05-07-2010, 06:59 AM
I am confused as to why you would want to limit your profit so drastically....

I understand there is a point where too much profit will actually cause you to loose profit due to lose of work. But in this case, too little profit will cause you to loose hope. Don't just charge what it takes you to get by. Tomorrow your truck will break down and you will need to do a repair or your mower will blow up and you will need to replace it. Or you will need to buy a bigger mower so you can do 4 yards in an hour.

The bottom line is that your overhead is more than you are thinking it is. I don't know if you are in denial or simply oblivious to it. Like I think I mentioned before, even if you don't have the overhead, charge enough so that it will help make up for it in case you ever do have the overhead. Breeze mentioned earlier that if you want to undercut the competition who charges $20, charge $19. I think that is decent advise. My opinion would be to be the best. Then go fix those $20 yards (for like $30)......

Has it ever occurred to you that perhaps the guys that are charging more are having to come along and fix someone else's $10 yard job?

jasonw
05-07-2010, 03:01 PM
I am confused as to why you would want to limit your profit so drastically....

I understand there is a point where too much profit will actually cause you to loose profit due to lose of work. But in this case, too little profit will cause you to loose hope. Don't just charge what it takes you to get by. Tomorrow your truck will break down and you will need to do a repair or your mower will blow up and you will need to replace it. Or you will need to buy a bigger mower so you can do 4 yards in an hour.

The bottom line is that your overhead is more than you are thinking it is. I don't know if you are in denial or simply oblivious to it. Like I think I mentioned before, even if you don't have the overhead, charge enough so that it will help make up for it in case you ever do have the overhead. Breeze mentioned earlier that if you want to undercut the competition who charges $20, charge $19. I think that is decent advise. My opinion would be to be the best. Then go fix those $20 yards (for like $30)......

Has it ever occurred to you that perhaps the guys that are charging more are having to come along and fix someone else's $10 yard job?

LOL:) You read my mind. I always like to say "Ok thanks for your time, Here is my card. Give me a call when your lawn gets hacked" LOL:)

Yard Elements
05-07-2010, 09:53 PM
ok but self employment is 7.65% additionally to the 7.65% that would be deducted from your pay if you were an employee anyway. So 1 yard out of the day's bunch would pay for that.

I still think in the right situation you can make a profit charging $15 per lawn that would take you about 30 minutes to complete. I know landscapers who charge $30 an hour and they have more overhead than would be needed.

lets say you buy a used self porpelled mower in good condition for $300. A trimmer and a blower for an additional 300. if you already have a truck, then you are set for business.

What would be your overhead?

You are already paying insurance for the truck so you don't need it.
you would have gas, maintenance (wouldn't be much for a 21'' mower, etc), advertising, and depreciation of equipment.


Overhead would be

* Rent to store your equipment

*Maintaining your truck

* Getting a trimmer and blower that will do the job for $300?

*gas

*Time



$1 dollar a minute why limit yourself

JP Landscaping
05-07-2010, 10:16 PM
I agree with all of you. You are all right because you know how the business works. But if you read the first post. I talked about an employee not thinking too deeply about it would think this way.

And it is possible to make a living cutting $15 lawns but not practicle for a very long time. (I mean as an employee he was grossing $5 per yard) Unless he doesn't want to grow the business and just make somewhat more than being the employee.

as far as having to fix a lawn just because the prior guy charges less isn't always true. as a matter of fact I have a few lawns out of my route that I have subbed out to those guys charging the $20 and let me tell you this guy does a fantastic job. He has been mowing my $40 lawns, trimming, bagging, edging, and blowing off all the debri (or brooming because it looks too clean for a blower) ... and using a push mower all for $20.

I admit, after looking at the size of the lawns, I think I overpriced them. They would take about 25 minutes to finish with riding equipment. but these are in higher end neighborhoods and we offer extra services along with that price.

SuperiorPower
05-07-2010, 10:32 PM
I agree with all of you. You are all right because you know how the business works. But if you read the first post. I talked about an employee not thinking too deeply about it would think this way.

And it is possible to make a living cutting $15 lawns but not practicle for a very long time. (I mean as an employee he was grossing $5 per yard) Unless he doesn't want to grow the business and just make somewhat more than being the employee.

as far as having to fix a lawn just because the prior guy charges less isn't always true. as a matter of fact I have a few lawns out of my route that I have subbed out to those guys charging the $20 and let me tell you this guy does a fantastic job. He has been mowing my $40 lawns, trimming, bagging, edging, and blowing off all the debri (or brooming because it looks too clean for a blower) ... and using a push mower all for $20.

I admit, after looking at the size of the lawns, I think I overpriced them. They would take about 25 minutes to finish with riding equipment. but these are in higher end neighborhoods and we offer extra services along with that price.

I see your point. I would hope that an employee would realize there is much more to it than that and also respect their boss enough to not try to under cut their boss. But, as we all know, there are some real winners out there who think they could do better than anyone else. In the end they will drive their business into the ground because of poor management and lack of business sense.

At least that is my take on it.

Eli

JP Landscaping
05-07-2010, 10:39 PM
that is true. Eventually they find out the hard way.

As they say, just because you are a great landscaper or lawn guy doesn't mean you will be a great lawn care/landscaping business owner.

doing the actual work and running the business are two separate things.

The Cleaning Doctor
05-08-2010, 12:21 AM
BINGO!

You hit the nail right on the head.

jasonw
05-08-2010, 01:37 AM
And it is possible to make a living cutting $15 lawns but not practicle for a very long time.



Only f you plan on living with your parents and driving dads truck. $15 per lawn in my area equates to about $30 per hour. I wont even get out of bed and turn on the Coffey pot for $30 per hours. If I have my A game on during this time of year I usually average about $160 per hour. This of course is a tinny pit smaller if I hire help. I am not sure why everyone ells went into business for themselves. I know this is stupid easy work and some may have started because, well they are stupid. Not to sound rude but they are uneducated and really cant do anything ells "I know a few of them" Others did it to be there own boss, to live a better life making better money than they were before. Shoot, I would charge $6,700 per lawn if I thought I could get away with it. Normally while bidding a lawn I will take a number, this number is the absolute most IO think I can make from that job, then I will knock off a few bucks just to look like a good guy. Every once in a blue moon depending on location for example I may cut my price in half for a neighbor or do it for free for a family member. My prices hover around the $40-$50 per lawn mark and thus far I have only lost one because of my prices.

SuperiorPower
05-08-2010, 02:58 AM
Ok, so let me play a little evil here......

I totally agree that you guys need to charge as much as you can and still get away with it. Many of you say you won't even show up to mow a lawn for less than $xx. But lets be fair. How do you feel about it when you take your mower to the shop and they charge you $xx for the repair, even if it is simple? That is exactly why most shops have a minimum charge of $20+. Lets be fair, and honest about this, how do you really feel about that?

Did you feel the same way about this yesterday as you do now that I have pointed this out?

I am not trying to be mean, but I think this ball needs to roll both ways. This also goes for when you go to any other business in town. I find this is a very hard one for me to bite but I try to be fair in the matter. For example, if I have to buy parts from other dealers, because I can't buy them from other sources (like certain John Deere parts) or need them TODAY and don't have them in stock, I won't shy away from paying full price (even though in a round about way it gets passed on to the customer, I am not making any profit typically on these parts). But, that is a bullet I feel like I need to bite. I don't ask for a discount because they need to make a profit too. I need them to stay in business to help me out! lol I don't want to service all the losers myself! lol

jasonw
05-09-2010, 01:39 AM
Ok, so let me play a little evil here......

I totally agree that you guys need to charge as much as you can and still get away with it. Many of you say you won't even show up to mow a lawn for less than $xx. But lets be fair. How do you feel about it when you take your mower to the shop and they charge you $xx for the repair, even if it is simple? That is exactly why most shops have a minimum charge of $20+. Lets be fair, and honest about this, how do you really feel about that?

Did you feel the same way about this yesterday as you do now that I have pointed this out?

I am not trying to be mean, but I think this ball needs to roll both ways. This also goes for when you go to any other business in town. I find this is a very hard one for me to bite but I try to be fair in the matter. For example, if I have to buy parts from other dealers, because I can't buy them from other sources (like certain John Deere parts) or need them TODAY and don't have them in stock, I won't shy away from paying full price (even though in a round about way it gets passed on to the customer, I am not making any profit typically on these parts). But, that is a bullet I feel like I need to bite. I don't ask for a discount because they need to make a profit too. I need them to stay in business to help me out! lol I don't want to service all the losers myself! lol

Lawn care is not small engine repair so its hard to compare the 2. That being said nothing has gone wrong with my tractor so I have not had to work on it myself but if I did that exactly what I would do. I am not going to pay someone to work on something I am 100% capable of doing myself. As far as the push mower if it craps out it goes in the trash and I buy a new one. You see because I mow lawns for $40-$50 I can afford to do this. If I did it for $10-$15 I would be screwed in the event of equipment failure.

You see here is my feeling. The average person can NOT work hard and fast enough to mow enough $10 lawns to make any money. In order to mow enough lawns you would need to hire help which will cost you at least $8 or so an hour plus WC, You would make no money after the insurance, not to mention gas and upkeep. No matter how you look at this situation you are just pissing in the wind plain and simple. Now if you are unemployed and need to eat then fine mow $10 lawns, do it illegally under the table and do what you have to do to eat but if you are not that hard up why Screw yourself that way? Leave that for uncle Sam to do.

SuperiorPower
05-09-2010, 02:17 PM
It is not lawn care and small engine repair that I am trying to compare here. It is the thought of being willing to allow other businesses we do business with to make money. That is especially true for the local small businesses we deal with every day. Personally, I try to do business with individually owned businesses (as opposed to chain stores like Wal-Mart, TSC, Rural King, Westlakes, Orscheln's, etc). These chain stores take out money out of the community.

Back to topic. My point is, if you guys need to take a mower or other machine to a shop to have some work done on it, and it ends up being something small (but something you can't do yourself), will you be upset if they charge you $20 or $30? Let's say there is some adjustment that needs to be made that you don't have the expertise to do and it takes them 10 minutes from the time you pull into their driveway to the time you pullback out. They charge you $20. You do the math and you determine if they make this much for an entire hour they will make $120 per hour, more than a automotive shop. Will you be upset?

Finally, let me just say, they will NOT average that much per hour. Yet, Jason said he usually averages $160 per hour. How would you feel about a small engine shop averaging that much per hour? I am all for you making that much per hour, I just want you guys to think about it when you take your machines to a shop, they have to make money too. Just remember, the shop probably has well over $100,000 invested in parts and tools alone. Then, you have the building, new equipment, and utilities (among other things). It is not that hard for them to have $200,000+ invested. How many of you who only mow have even $30,000-$40,000 invested, including your truck/trailer?

Sorry for the rant, its just that many times we take a lot of lip for charging so much, yet, we have a much greater investment than the complainers do.

Think about it.

P.S. Jason, this is not directed at you personally, just asking a question to the readers here as a whole. I simply want you guys to think about it that typically your small engine shop has a LOT MORE of an investment than the commercial lawn care guy does and needs to make a living too.

jasonw
05-09-2010, 02:54 PM
I would not go to a shop but if I did I would not even ask there price, I would have the work done and pay the bill. Now if an engine rebuild ran me &59.99 you bet your but I am going somewhere ells to have the work checked. I would question the quality of anyone's work who comes in more than %50 lower on a bid no matter what the service is. I would rather pay more and have it done right than save a buck and do it over again myself a week later.

lxarth
05-19-2010, 06:34 PM
I just got through this whole thread, and it's quite the rant.

I like to support small businesses, and the repair guy I use is a nice guy, and runs it out of his house. I don't know enough about mowers to work on them myself, so I go to him. Soon I should be able to do my own work on the rainy days and such.

Now, to comment on the $10/lawn debate. I charge a minimum of $20 per lawn, but I usually don't get lawns above the $30 range. Now, just to clarify, I am making $1/min on these lawns. I don't feel I am underbidding, but at the same time I can be more competitive because I have less overhead. But that doesn't mean I lower my price, it just means I make more money.

Where I feel I underbid is with lawn maintenance. That's where I screw myself.

But as far as overhead does go, I try to not take any clippings. I either try to mulch-mow, or use their debris container, but when a customer’s lawn requires that I take the clippings...well, what about that overhead? I estimate it costs $1 just in clippings from one yard.

Also, what about the customer who ask you for extra stuff? "Hey, can you spray the weeds?"...What's your answer going to be? "No, I don't do that, call another company". Hell no. I started getting requests for that, so I went out and bought a sprayer.

Then I got people interested in edging...so I got an edger.

I don't foresee someone charging less staying in business, because the moment their mower breaks, their business stops. I'm scared to death of my mower breaking on me, and I can afford to replace it, I would just rather keep saving for a motorcycle, a new trailer, and a bachelor party (yes, I'm saving to buy/do all that in less then a month).

And I can afford to save like that because I don't cut my own throat by charging too little. How do you expect to keep a customer for next season when you tell them: "Oh, just so you know my prices have gone up...ya, last year I only charged you $10, but this year I have to charge you $20". That's a huge jump, and will just leave the customer thinking that they can just find another $10-guy.

Lets be real, I would pay a kid $10 to cut my lawn, but I wouldn't cut someone’s lawn for only $10.

I could keep going, but I'm starting to rant myself, lol.

JP Landscaping
05-19-2010, 09:29 PM
So I was talking to a guy in town I know, who also mows lawns and this is what he had to say:

His average lawn is about $15...That's A lawn I would charge 30-35 for.
His truck is a 79 Dodge. He says his insurance is almost free. He uses a self propelled push mower (Toro) not commercial... A trimmer from Home depot, and a leaf blower he got for free. (he is also a mechanic so he works on his own equipment).

So he adds, his insurance is really low because he is old with a good record and his truck is old. Plus he uses that truck personally so even if he wasn't using it for business, he would still have all those expenses.

He told me he has 20 lawns and he does them in the evenings during the week. So for a couple of hours in the evening time he's making an extra $300 or so each week.

My question to you is...out of those 30 you charge to mow a lawn, how much is profit?

lxarth
05-20-2010, 02:42 AM
I use stuff that isn't really commercial, aside from maybe the new Echo blower, but I have a Toro mower, and a $70 Sears trimmer, and some other Home Depot stuff.

My lawns are in the $20-$30 range, not counting the lawns that I maintain, which could technically run in the $30-$40 range. I spent about 25% on expenses last month, with (strangely) only about 10% in expenses this month, but the month is not yet over, and last month I bought some equipment.

With a lower fee your cost to run a business doesn't go down, it goes up. You still have to pay the same amount in gas as the other guy charging double, but his profit is greater, IMO.

As I see it, if you make $2,000 this month, but spend $500 in expenses, you are better off then the guy making $1,000 and spending $500 in expenses.

Also, there are people who think that $20 is over-priced to mow, but those are the people looking up and down the street for a kid to mow for $10. But then there are people that think $20 is too little.

I have had so many people not flinch when I tell them "Ya, it's pretty over-grown, I can cut it for $60". Yet I have had only a few people comment about a high price, but those are usually the people who go: "Yea, I'm not looking to spent more then $25 or $30 to get it cut". So I walk around and then say: "Hmmm, I can cut it for $40". They say no, and I walk away.

LawnMoore
07-25-2010, 10:02 PM
Take this scenerio for instance:

What do you guys think??

Lets analyze this: what would be his costs?
- basically his operating costs (variable)
gas, maintanence, administration, ??
- his fixed costs would be pretty low
: registration, insurance, adv, what else??
I did not read the many pages of replies!
If you would like to read the entire quoted post, please scroll to the last page and look at the last post, which is post #1 that started this thread!

My analization:
His fixed costs could be more if:
Assuming his grandpa owns an equipment shop, his mower/equipment shouldnt cost anything if it breaks ;)
But if
his truck motor blows up..
his transmission malfunctions due to pulling a heavy load in OD for too long..
He has a flat tire!!! Sidewall(unfixable) can cost a new tire or a $20-30 dollar used one!
Then:
If he is uninsured as many know, a lawsuit can be costly!

Then with these unfortunate scenario's he is broke or in debt ;(

All Terrian landscaping
08-06-2010, 08:56 PM
I live in Wisconsin near Miliwukee, where there are alot of small city lots, (i live in the country, so im not able to do this), but anyways on craigslist there is someone selling there, $10 a mow landscape company. now i have no idea how this is workin out for them, heck for all i know it mite just be a kid. All i know is that i sure cant compete with that.

jasonw
08-26-2010, 01:09 PM
So I was talking to a guy in town I know, who also mows lawns and this is what he had to say:

His average lawn is about $15...That's A lawn I would charge 30-35 for.
His truck is a 79 Dodge. He says his insurance is almost free. He uses a self propelled push mower (Toro) not commercial... A trimmer from Home depot, and a leaf blower he got for free. (he is also a mechanic so he works on his own equipment).

So he adds, his insurance is really low because he is old with a good record and his truck is old. Plus he uses that truck personally so even if he wasn't using it for business, he would still have all those expenses.

He told me he has 20 lawns and he does them in the evenings during the week. So for a couple of hours in the evening time he's making an extra $300 or so each week.

My question to you is...out of those 30 you charge to mow a lawn, how much is profit?

WOW $15 per lawn would barely cover my vehicle and liability insurance. I am willing to bet he has no liability insurance so at $300 per week if he puts a rock through a windshield he will lose a months pay replacing it. Not only that once the clients and city find out he is not insured they will more than likely put a stop to his business. For those 20 laws I would be doing them every 2 weeks in my area and taking in $1,800-2,000 per month for them. If I did them weekly like him it would be $3,600-$4,000 per month. That is going with the average of $45-$50 that I get in my area. I dont really work on my own equipment. I change the oil and air filters and stuff like that but everything I have is new and under warranty so I dont have to work on any of it. When the warranty is gone and I have trouble I will more than likely haul it to the bone yard on my farm and just get a new one. I also use only residential grade equipment so if my push mower blows up I am only out $200 for a new one. $2,000 tops for the tractor.

MAKLawnCutter
08-26-2010, 07:00 PM
Some chick called me out today to "trim" her yard from my craigslist ad, i made her my last stop since first service calls can be HOURS of work to make them worth a damn and not a killer... which, this ladies yard looked like a grass Nome took a dump all over the place...

I told her over the 25$ service it would be an additional hour worth of labor to complete it, so, two hours for 80$ CHEAP! She said it was too expensive, i handed her my papers (Tax ID, insurance card, fuel fill ups) and showed her this wasnt a low cost industry and making sure she was covered cost me money, you pay for quality...
She talked with her husband and he came out all huffy and puffy "I dont want anything special, i just want it cut and the hedges done" I walked him to the hedges and grabbed a hand full of morning glory from the cap and walked 12feet from him pulling the weeds out, his jaw hit the floor "Wow, i thought that was part of the hedges" Pulled out his wallet and handed me 150$ and told me to do as much as i could in his yard on that. I wrote him up for the 80$ in labor and two additional cuts and a spray treatment. He was STOKED, i hooked him up since he realized i wasnt f-ing with him and he realized HE f-ed it up.

People get what they pay for, i can use 55$ in gasoline a day just in my truck and mowers... doesnt include my mix fill ups every other day. Insurance, LoJack on the trailer, Fuel, Blades, Tune-Ups...

I want to hire this kid that is making 10$ a lawn and put him on my route, give him 2.25$ a lawn and call it a Business deal :D.

matt

jasonw
08-27-2010, 01:56 AM
Some chick called me out today to "trim" her yard from my craigslist ad, i made her my last stop since first service calls can be HOURS of work to make them worth a damn and not a killer... which, this ladies yard looked like a grass Nome took a dump all over the place...

I told her over the 25$ service it would be an additional hour worth of labor to complete it, so, two hours for 80$ CHEAP! She said it was too expensive, i handed her my papers (Tax ID, insurance card, fuel fill ups) and showed her this wasnt a low cost industry and making sure she was covered cost me money, you pay for quality...
She talked with her husband and he came out all huffy and puffy "I dont want anything special, i just want it cut and the hedges done" I walked him to the hedges and grabbed a hand full of morning glory from the cap and walked 12feet from him pulling the weeds out, his jaw hit the floor "Wow, i thought that was part of the hedges" Pulled out his wallet and handed me 150$ and told me to do as much as i could in his yard on that. I wrote him up for the 80$ in labor and two additional cuts and a spray treatment. He was STOKED, i hooked him up since he realized i wasnt f-ing with him and he realized HE f-ed it up.

People get what they pay for, i can use 55$ in gasoline a day just in my truck and mowers... doesnt include my mix fill ups every other day. Insurance, LoJack on the trailer, Fuel, Blades, Tune-Ups...

I want to hire this kid that is making 10$ a lawn and put him on my route, give him 2.25$ a lawn and call it a Business deal :D.

matt

HAHA trust me you dont want to hire someone that cheep. He probably cuts laws with his teeth.