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adamsmowing88
03-31-2010, 09:15 PM
So I contacted 3 places today to see the going rates over my way. I called one place and they are supposed to come tommorow. I emailed 2, and one of them returned my call a few hours after me filling my info in on there site, and said they would ''mow, trim, and minor edge for $25.00!!!????'' They did not even come out to my house. My guess is they went on google earth or something and found the sq. footage. My yard is 11,900 sq. ft! I would personally charge 35-40 dollars for this. But then I went back on there site and said they were college kids. And that explained alot. What would you charge for this?

mark123
03-31-2010, 09:50 PM
So I contacted 3 places today to see the going rates over my way. I called one place and they are supposed to come tommorow. I emailed 2, and one of them returned my call a few hours after me filling my info in on there site, and said they would ''mow, trim, and minor edge for $25.00!!!????'' They did not even come out to my house. My guess is they went on google earth or something and found the sq. footage. My yard is 11,900 sq. ft! I would personally charge 35-40 dollars for this. But then I went back on there site and said they were college kids. And that explained alot. What would you charge for this?

My price is 11.9 x 1.1 + 14 = $27

adamsmowing88
03-31-2010, 10:44 PM
And can you break that down for me alittle?

JP Landscaping
03-31-2010, 10:48 PM
that's about the same size as my yard. If you have no fence and no major trimming red flags I could also do it for about $27

Steve
04-01-2010, 04:38 AM
My price is 11.9 x 1.1 + 14 = $27

what is the 1.1 and the 14?

adamsmowing88
04-01-2010, 06:57 AM
I don't get it, how are you guys making money?

mark123
04-01-2010, 07:10 PM
what is the 1.1 and the 14?
I charge $1.10 per 1000 square feet and add a $14 stop charge. The stop charge pays for me to get there, unload and reload equipment.

Steve
04-01-2010, 09:06 PM
Oh that is very interesting!

add a $14 stop charge.

How does this change depending on the distance to the customer?

mark123
04-01-2010, 09:11 PM
... How does this change depending on the distance to the customer? It's fixed. It's how I base my minimum pricing. I have a similar formula for fertilizing: Area/1000 x $3 + $18. That would make my minimum fertilizing charge $21.

Steve
04-01-2010, 09:35 PM
But I am guessing, your service area is predefined so you wouldn't take on any jobs that were too far out of the way. So the fee doesn't have to change.

mark123
04-01-2010, 10:43 PM
But I am guessing, your service area is predefined so you wouldn't take on any jobs that were too far out of the way. So the fee doesn't have to change.
I suppose. My business phone number is local (not toll free) so only calls come from around here. Yeah, I'm not driving to pittsburgh for any reason, let alone driving a truckload of equipment. :p

The biggest distance I travel is about 13 miles from base but it's only 4 miles from another stop. Distance isn't really an issue if you cluster jobs.

JP Landscaping
04-01-2010, 11:49 PM
This is how you make money on $27 lawns.

These are up to 30 minutes to unload, mow, reload and go to the next place.
so in 8 hours that is up to 16 lawns.

16x27= 432 daily
432x5= 2164 weekly
2164x30= 64,800 for the season

64800 - 14000(overhead)= $50,800 not bad for 7 months work.
plus they will also add other things like mulch or clean ups, so it turns out to be more

My overhead is fairly low compared to others. i don't have a new truck or $10,000 mowers. I only carry 500,000 liability so its a little cheaper than the 1 mil or 2 mil. Keep a tight route so you save on gas. Keep your equipment well maintained. The key is to keep overhead as low as possible...

For example: my truck was only $5000. but i has a new engine and transmission. The tires are almost new. It is in really good shape. It's an 88 so I save a lot on insurance and licensing. it uses more gas than the new trucks but the savings on my insurance and licensing far outweigh the difference in gas.

Also, since it is an 88 chevy short box. It's in pretty high demand around here for those looking for these types of trucks. Which means, as long as I keep it in good shape, the value of it doesn't drop like buying a new truck.

Steve
04-02-2010, 11:13 AM
Distance isn't really an issue if you cluster jobs.

What kinds of things do you feel a lawn care business should do to help cluster jobs?

These are up to 30 minutes to unload, mow, reload and go to the next place.
so in 8 hours that is up to 16 lawns.

Would this be solo or with a helper?

How long do you think it would take the average lawn care business owner to reach 16 lawns per day?

mark123
04-02-2010, 03:53 PM
What kinds of things do you feel a lawn care business should do to help cluster jobs?
Sometimes it's hard but what I try to do is if someone from one area calls I tell them I'm only there on a certain day of the week. Most customers want done on Friday for some reason but I'm only on the north end of town on Friday. If someone from the west end calls they get placed on Wednesday or Thursday. New customers just get routed according to their locale.

There is only three reasons I'll break a route and place someone on a wrong day:
They pay a lot I really like them She's really cute. :p

Steve
04-03-2010, 05:07 AM
I think that is brilliant! It makes sense and is a smart move.

I charge $1.10 per 1000 square feet and add a $14 stop charge. The stop charge pays for me to get there, unload and reload equipment.

When a newer lawn care business is looking to come up with their own figures, how should they go about figuring out their stop charge?

What is the benefit of having a stop charge vs including it in the price per sqft to cut the lawn?

Yard Elements
04-03-2010, 12:58 PM
I would be more like ifty dollars and do a bang up job.

$27 for 11,900 Square feet to me is crazy but I always get lowballed maybe I price too high.

I have a $30 Minimum as well? Does anyone else have a min.?

Is my Min. way to high?

To me the last guy seemed to low ball?

Yard Elements
04-03-2010, 01:01 PM
This is how you make money on $27 lawns.

These are up to 30 minutes to unload, mow, reload and go to the next place.
so in 8 hours that is up to 16 lawns.

16x27= 432 daily
432x5= 2164 weekly
2164x30= 64,800 for the season

64800 - 14000(overhead)= $50,800 not bad for 7 months work.
plus they will also add other things like mulch or clean ups, so it turns out to be more

My overhead is fairly low compared to others. i don't have a new truck or $10,000 mowers. I only carry 500,000 liability so its a little cheaper than the 1 mil or 2 mil. Keep a tight route so you save on gas. Keep your equipment well maintained. The key is to keep overhead as low as possible...

For example: my truck was only $5000. but i has a new engine and transmission. The tires are almost new. It is in really good shape. It's an 88 so I save a lot on insurance and licensing. it uses more gas than the new trucks but the savings on my insurance and licensing far outweigh the difference in gas.

Also, since it is an 88 chevy short box. It's in pretty high demand around here for those looking for these types of trucks. Which means, as long as I keep it in good shape, the value of it doesn't drop like buying a new truck.

Do you really mow 16 lawns a day every day, all season?

Yard Elements
04-03-2010, 01:03 PM
You guys are crazy $15 lawn mows? With Edging on 2000 Square feet.

How the hell do you make cash? I am confused, everyone hates lowballers but they charge very little to mow a lawn?

mark123
04-03-2010, 03:24 PM
... What is the benefit of having a stop charge vs including it in the price per sqft to cut the lawn?

The stop charge does two things, it creates the minimum price mentioned already and it also keeps the price on a really large job realistic.

Here are some examples:
with the formula of (sqft)/1000 x 1.1 + 14)
1500 sqft lawn = $16
10000 sqft lawn = $25
25000 sqft lawn = $42
50000 sqft lawn = $69

If I instead just had a formula for square feet perhaps $10/1000
1500 sqft lawn = $15 < - this is about right here
10000 sqft lawn = $100 < - that's silly
25000 sqft lawn = $250 < - good luck
50000 sqft lawn = $500 < - that's ridiculous
It gets less realistic the bigger the lawn gets.

Then if you lower the price per 1000 to say $5/1000
1500 sqft lawn = $7.50 < - not worth going to
10000 sqft lawn = $50 < - you might get that if someone isn't comparing prices
25000 sqft lawn = $125 < - no chance
50000 sqft lawn = $250 < - would you pay that?

As you can see the stop charge keeps a nice balance between too little and too much. It's all about the time it takes. Of course you've got to weigh the cost of living in your area. It's been a bit repressed around here since we lost the major steel mills.

I propose we redefine "lowballer" as someone that is cheaper in price because they aren't legitimately licensed or insured. I wouldn't consider someone a lowballer if they just don't need to make as much money as someone else.

Steve
04-04-2010, 05:56 AM
That is a very good point and it helps explain it a lot.

Ultimately you can't base lawn mowing on sqft only because as you said you will need to have a minimum fee to just operate your business and get to the location.

It makes you wonder if it is better to base your price on time to perform the service instead of sq ft.

mark123
04-04-2010, 09:30 AM
... It makes you wonder if it is better to base your price on time to perform the service instead of sq ft. Yes, that would be better but its not a tangible number. The time also changes every week. You could be tired, or the lawn grew 12" since last week causing you to mow slower to not miss anything, the mower could run out of gas in the back yard forcing you to walk back and forth across the lawn 3 extra times or you could snap a belt. Actually, as you get to know the lawn you should be able to do it a bit faster. The first time you do it you won't know the most efficient way to weed whack then you'll discover a few patterns around the shrubbery that allow you to cut a few minutes off of your time.

Basically, sq ft = time, or it should, but there are no guarantees.

JP Landscaping
04-04-2010, 10:30 AM
mark,

you make good points. That formula is a strong foundation to figuring out true costs because costs are split into fixed and variable. The $14 takes care of your fixed costs and the 1.1 takes care of the variable.

Like mark said, it takes different people different amounts of time to mow the same lawn based on their machines and plan of attack so the time way of estimating doesn't always guarantee the right price. It shows what you need to charge what you need to make your desired income but it doesn't show the market value or market going rate.

also we know that in economics the market sets the price, not the companies. That is unless you are a monopoly, the only one in town. So what this tells us is that the correct price will be determined by the customers. The more companies there are the price will be dropped lower and lower because there is more supplies (more competition) Those that can't operate at those prices will drop out. It's the basic law of competition.

Again this depends on the market which depends on the place and the number of companies. So $25 per lawn in one market may be normal while the same lawn in another would cost $45.

It's like the sale of a house. the same house is valued differently in different markets.

glcs
04-04-2010, 04:38 PM
So here is my ? if you have a lawn that is 10,000 sqf. the fourmila you use is 10.0 x 1.1 = 11.00 + 14.00 = 25.00 is this based on one man or two men. and is this takening in the insurance gas and everything to run a business.

The stop charge does two things, it creates the minimum price mentioned already and it also keeps the price on a really large job realistic.

Here are some examples:
with the formula of (sqft)/1000 x 1.1 + 14)
1500 sqft lawn = $16
10000 sqft lawn = $25
25000 sqft lawn = $42
50000 sqft lawn = $69

If I instead just had a formula for square feet perhaps $10/1000
1500 sqft lawn = $15 < - this is about right here
10000 sqft lawn = $100 < - that's silly
25000 sqft lawn = $250 < - good luck
50000 sqft lawn = $500 < - that's ridiculous
It gets less realistic the bigger the lawn gets.

Then if you lower the price per 1000 to say $5/1000
1500 sqft lawn = $7.50 < - not worth going to
10000 sqft lawn = $50 < - you might get that if someone isn't comparing prices
25000 sqft lawn = $125 < - no chance
50000 sqft lawn = $250 < - would you pay that?

As you can see the stop charge keeps a nice balance between too little and too much. It's all about the time it takes. Of course you've got to weigh the cost of living in your area. It's been a bit repressed around here since we lost the major steel mills.

I propose we redefine "lowballer" as someone that is cheaper in price because they aren't legitimately licensed or insured. I wouldn't consider someone a lowballer if they just don't need to make as much money as someone else.

Steve
04-05-2010, 07:21 AM
So here is my ? if you have a lawn that is 10,000 sqf. the fourmila you use is 10.0 x 1.1 = 11.00 + 14.00 = 25.00 is this based on one man or two men. and is this takening in the insurance gas and everything to run a business.

Ultimately this calculation will differ from business to business based on your specific expenses. Yes it should take into account all your expenses.

Your costs will differ depending on how many employees you have or what kind of equipment you have and all of this has to be taken into consideration when you create your bid price.

Does this help?

mark123
04-05-2010, 11:15 AM
Ultimately this calculation will differ from business to business based on your specific expenses. Yes it should take into account all your expenses. ...
This is true. My formulas are just for me. I'm not suggesting that anyone else use my exact numbers or that you're wrong if you disagree with my pricing. You've also got to take into account your area's general cost of living. The cost in my area is most likely going to be much less than the cost in Florida or California.

Steve
04-06-2010, 06:08 AM
How long did it take you to come up with that pricing model? Was there something you went through where mentally it snapped in your head that the way you were pricing wasn't working and you needed to come up with a new pricing model or was this always the way you did it?

mark123
04-06-2010, 08:55 AM
How long did it take you to come up with that pricing model? Was there something you went through where mentally it snapped in your head that the way you were pricing wasn't working and you needed to come up with a new pricing model or was this always the way you did it?
I interviewed the local lawn care business owners. I worked for one and helped 2 others when I was off and they needed help. Drive time between jobs gave me the ability to chat and ask questions about how they run their business. The common factor in their pricing for all of their services was the "stop charge". I never gave it a thought until I went out on my own and started trying to come up with pricing. I tried to make it work other ways and the stop charge was the only way I could make it work. It all began to make sense why they all did it that way.

Steve
04-06-2010, 11:52 AM
That is fascinating! The stop charge seems to be really important for services such as lawn care but how important do you feel it is for other services like landscaping where the potential job would be in the hundreds or thousands of dollars range?

mark123
04-06-2010, 12:28 PM
That is fascinating! The stop charge seems to be really important for services such as lawn care but how important do you feel it is for other services like landscaping where the potential job would be in the hundreds or thousands of dollars range?Ah, that's a great question. Those jobs are ultimately charged as time and materials. In other words
[(man Hours * hourly Rate) + (material Cost * profit Margin + delivery)]
Unfortunately, man Hours almost always needs to be estimated in advance.

Basically, there are two tiers of services. Those that get a little bit of money from a lot of people and those that get a lot of money from one person. The little bit jobs are the ones that require the stop charge plan. The other jobs it becomes negligible and can even work against you.

Steve
04-07-2010, 05:02 AM
Basically, there are two tiers of services. Those that get a little bit of money from a lot of people and those that get a lot of money from one person.

It also makes you wonder how important is it to promote those higher tier services to the lower tier customers and how much time and energy should be spent on that.