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mowboy
01-11-2006, 08:47 PM
This question comes to us from Johnie of Johnie's Evergreen

How do you know what to charge for different jobs?

Good question Johnie. This is one of the greatest challenges for new companies just starting out. There are a number of ways to set your pricing.

1) Hourly Rate - Set an hourly rate and price your jobs based on an estimate of the time it will take to complete the job. If are just starting out this may be the best method to use until you get a little experience. Then you can use the comparitive method.

2) Comparative Method - Compare your costs to the costs of other companies in your area. Try networking... ask at your local suppliers or business associations what others are charging for certain services. You can also compare with jobs that you already have once you have done a few jobs and are comfortable with your profit level.

3) Formula Method - For things such as lawn cutting, fertilizers, chemical sprays and the such it may be best to use a formula per 1000 square feet. This will make quoting jobs easy as you just have to measure the areas you will be servicing. Of course, you will need to use one of the first 2 methods to come up with the actual price.

There is a lengthy discussion in my book Start & Run a Landscape Business (http://www.mowboy.com/index.php?option=com_content&task=view&id=25&Itemid=38) about pricing (pages 111 - 115) which expands greatly on these points and also talks about the 'textbook method'.

I hope this information has helped you. Let us know if you have any more questions or need further explanation.

Thanks for your question.