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shahoo80
12-30-2010, 02:07 AM
OK here is my question. Just completed my first full year and did ok but looking and running idea's for next year.

Would it be better to accept a smaller amount for a yard for to service all year or to ask your normal rate and not get the account?

I'm not saying take a smaller amount to break even or lose money but enough to make a little. The reason I ask is that even though I started with 1 customer and ended up with right at 100 with some are several acres in size farms and found that I could service more accounts.

I am wanting to expand next year and hire a helper besides the helper that I had this summer. I am planning to do more advertising this year but was not impressed with the results last year. I did door hangers,flyers,email campains. No big results just one here and one there mostly word of mouth and people stopping while I was mowing or calling and saying that they saw my number on the truck.

The biggest hit was donating services to an elderly lady, Local newspaper picked up the story that I was looking for nominations for someone in need in the community that just couldnt do the work. I had alot of calls from it and picked up several accounts from it as well. This year I already started getting free press, My daughter in high school which is my helper in the summer has had several drives for the needy which they auction of stuff and the money goes to help the needy and I have donated various services to the cause and each basket had name listed in the newspaper plus when the customer calls for the free service it gives you a great chance to upsell while there.
Just wanted your opinions on the smaller amounts. Thanks for the replies.

jklawncare
12-30-2010, 04:36 AM
I dont have alot of over head since im a teen..all i need to pay for is gas, equipment maintenance, car insurance, and things i like..haha

with a savings fund on the side for new equipment and new truck

I get bids from aound my area and i go a little more expensive then the cheapest of the top 3 competitors

and if anyone tells me my prices are too highi can usually tell if there trying to get me down on price or if they genuinly cant afford it..
i base my decisions off that

if i can lower my bid and still make it worth my time to go up there and do it..ill do it.. if im not making enough of what i want..then theye have to find a lowballer in the area..and get worse service

jymie
12-30-2010, 08:57 AM
By taking on that one property, that gives you visibility on that street and opens up your service to neighbors who may be interested. You could then be soliciting them and maybe add them on as well. Last season I took on a small commercial, it took us all of 10 minutes to do for $15 every two weeks. Then we got a Church property next door on the same parking lot for $45 bucks a week. Getting that one helped make the small one more affordable. Now we are on that site getting $60 for the hour we are there.

Steve
12-30-2010, 04:06 PM
First off, I have to say, you sound like you are doing great so far.

Would it be better to accept a smaller amount for a yard for to service all year or to ask your normal rate and not get the account?

I think it depends on your business strategy. When you are at 100 customers, do you feel you should be focusing on more profitable customers now? If not, can you explain your strategy?

shahoo80
12-30-2010, 10:19 PM
Well when I started I did not put a number on it per say, What I did was said ok it takes me x amount of dollars per year to live on myself and family not the business and I took an average pay per yard and divided to come up with a project amount of account that I would target. Yards here average 35 per and 30 to 35 cuttings per year and came up with my number. The lucky number was 93 well I hit that and more but found I still had extra time per week that I could be working and making more money. Which allowed to donate some time and do a little something extra for a customer or two along the way. I have a subdivision that is close to me that has I think 158 Townhomes buildings that are mostly retired and people that do not want to care for a full home. As the year went along I lost maybe 10-12 because of cost retired on fixed income kind of thing. I know a couple lost for 10.00 so I was thinking I could lower the 10.00 and get a few more of these great accounts. Very easy money I park once and all within 2 blocks of each other and these retired folks love to chit chat to me of course and each and every neighbor so it would be easier to market to these customers. And since the largest yard it takes me 18minutes start to finish and that's taking my time.

I am very happy with my first year, I feel that there was a learning curve along the way and still made my goal for the first year. Next year I am planning to buy another mower or two then sell all but 1 and buy some new or demo units and this set me for a few years with proper maint. hopefully this will allow to expand into other services and buy bigger equipment such as tractors,loaders trucks trailers etc. I mean I could go out tomorrow and but all of it but the payments and then being in debt I am not wanting to do right now. I want to keep to my plan, buy a nice used equipment then let it pay for itself and it will eventually buy new but will allow to expand and grow as we go along.

My plans for the next 3 years is to grow 10 - 25% each year which I should be able to get there if I am able to expand and do more services.

Steve
12-31-2010, 02:09 PM
Say the average lawn takes 15 minutes to mow and you charge $35 per lawn. If you could do 4 in an hour, that would be $140.

If you lowered the price to $25 per lawn, you would make $100 per hour if you could mow 4 lawns in an hour.

How many lawns do you find you can mow in an hour and how do you feel that $10 off will effect your bottom line?

shahoo80
01-01-2011, 02:09 AM
Your right Steve, could do the 4 lawns per hour no problem. I charge 30 per so I make 120 per hour on 4 yards. Loosing 10 per yard will not cause me to go under for sure and will gain more accounts. I'm thinking that maybe could even make more money by taking less.

Let's say I drop my price to 20 per yard, I can mow 4 per hour that's 80 per hour. My plan was to hire another helper this year which will allow to almost double my production which will bump up to 160 per hour which gives me another 40 per hour for dropping my price and hiring a helper. So in fact if I could pick up 30 accounts from here for dropping my price that would be enough extra pay to pay the helpers pay and about half the expenses for the week.In the end I can see that dropping my price would be better in this case for sure.

Steve
01-05-2011, 05:40 PM
What is your view then on dropping your price and then taking on more expenses (employee pay)? Do you feel that is a double whammy or do you feel you will make up for it and then some by doing that?