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-   -   Low ball alternative (http://www.gopherforum.com/showthread.php?t=17740)

Billy Goat 11-26-2012 07:13 PM

Low ball alternative
 
Since Iam starting a new lawn business. I dont want to low ball other lawn care companies to try to take their accounts. I was wondering if sub contracting would be a good alternative? Contacting other lawn care businesses and offering to be a sub contractor. This way I can get my foot in the door. My question is, would you as a owner consider sub contracting out work as needed? When you have more work than you can handle or vacations and such.

SECTLANDSCAPING 11-26-2012 07:21 PM

I would but subs are extremely unreliable. To make it worse it would be work that I dont want or wouldnt normally bid. So when I get stuck doing its going to be a problem.

There was a tree job recently that was about 30 miles away. One of my snow subs lived there and I thought Ill send him there to look at. The guy tells me he wants a $1000 to do it and I would have to rent the stump grinder.

I ended up doing the job myself. $100 for 2 guys. $30 for gas. Subbed the grinding out for $200 ($235 to rent). So my expenses were 1/3 of what this guy wanted. Whats the point?

LawnBoy0311 11-27-2012 05:27 AM

Lets just say I own a used ZTR. I have a used truck & trailer, a trimmer, blower, 21" push mower, and a few other odds and ends. I'm a 1 man circus and I spent 15K on startup for everything. Now, lets say Ms. PITA customer calls and wants a quote. I quote her $30 (cut/trim/blow/edge).

My competition, Mr. Wonderful's Lawncare, has a few trucks and a few crews. He took out a loan to finance his company to start with. He's got AWESOME equipment! The kind that makes everyone jealous. Ms. PITA also calls him. He quotes her $40 for the same service.

Am I considered a lowballer? My expenses are much less than his. I am a 1 trick pony as he has a few crews. His equipment won't need as much fixing as mine, but I got mine for a whole lot less (Theres a lot more, but you get the general idea....)


When quoting, come up with a price thats good for YOU. Mr. Wonderful's Lawncare is everywhere. Just because you come in under him doesn't mean your a lowballer. If you quoted "Every yard just $15!!!" Then yes, you are a lowballer. Your better off getting new customers, and if a few come from competitors, then so be it. Do you think Mr. Wonderful's Lawncare really cares if he steals all your customers?




To answer your question, I would not sub contract out any work unless I have to. It would be hard to put my reputation in the hands of a bunch of clowns. Like SECT put it, it may be cheaper to do it yourself. Or MUCH less of a headache.

Billy Goat 11-27-2012 06:28 AM

Perfect Example
 
Thanks LawnBoy0311, that is a perfect example. Well stated and true for the one man army. I will be starting as a part-time business so I will not be desperate for customers. Where I live there are tons of small yards and thinking about starting around $25 per lawn. My neighbor was unable to cut his lawn for a few weeks due to a operation on his shoulder and a lawn care company charged him $30 per cut/trim. I dont consider that low balling either charging $5 less.

This is funny but true. Most people do not change their own car oil. If you add up the time and money, it is not really worth it when you have a jiffy lube in town. I will thinking about making a flyer with this in mind. Adding up the time and money to mow your own yard compared to having a lawn service. People may relate to it hopefully. What do you think?

willshome 11-27-2012 06:54 AM

DON'T LOW BALL to get work, all you will get is cheap customers that suck the life out of you. When you raise your rates they stop using you and find the next cheap "service"

What I have found that works is
Website Google ranked
look the part "letter your truck & trailer"
If you do have to "low ball" run sales like 15% fall cleanup

willshome 11-27-2012 07:25 AM

If your basing your price only on being cheaper, then you are low balling and why do you want to do that?
Do you think everyone knows their price?
Are they running ads everywhere?
If someone is mowing for $20 will you mow for $15?
What if gas goes to $4.50 a gallon, Do you know all your costs?

Billy Goat 11-27-2012 07:56 AM

Quote:

Originally Posted by willshome (Post 119060)
If your basing your price only on being cheaper, then you are low balling and why do you want to do that?
Do you think everyone knows their price?
Are they running ads everywhere?
If someone is mowing for $20 will you mow for $15?
What if gas goes to $4.50 a gallon, Do you know all your costs?

I have no intensions of so-called low balling. Its like any other bid for any job. Its whats you are willing to profit from. If this lawn averages $20 base on what most charge and someone bids it at $40, does that mean everyone else is low balling? Iam sure all lawn companies have some accounts that have low to no profit but still keep them for some reason. On the other hand, Iam sure they have accounts that they make a killer profit from. It may even out in some cases.

This question really doesnt have a right answer. It depends on everyone's opinon on the subject.

dpld 11-27-2012 08:27 AM

pricing should be done on what the market will bare and not what your overall costs are.

your overall costs will determine what your profit margin will be and it should not determine what you charge.

a 40 dollar lawn is a 40 dollar lawn and it should not make no difference if you are using a sears push mower or a 10k Z rider.

the best way is to find a average of what everyone else charges and charge the same and throw in certain low cost services to separate yourself from the others
like edging the beds and walkways, etc, etc that really don't cost too much time and money for you to do.

as we grow our customer base we want to retain our customer base into the future but more often then not as a business grows guys have to weed out their " low paying jobs" because they obtained them when they did not have many costs and those customers don't fit into their current business model as their costs for doing business rise.

the evolution of a business is to grow and if it does not it eventually fails or goes stagnant and when most start out they say " i am never gonna be the kind of business that has multiple crews running all over the place " but as time passes they find that scenario is inevitable.
there is only so much money you can make as a owner operator and regardless of how hard you work there is a limit to how much you can do and as costs rise and inflation adds up the 50 k you make this year that provides you with a good lifestyle can not even pay the bills 5,10 years down the road.

when i started out 22+ years ago when i had no wife, children or mortgage and had only 2 employees i made good money for back then and definitely had less headaches then today but i could not live off what i made back then today even though back then i felt like i was living like a king.

Billy Goat 11-27-2012 09:08 AM

Thanks dpld for your reply. You have been doing this for a long time and I look forward to your insight on my questions. Most of my questions will be what if type questions. Knowing the dos and donts before hand will save me alot of trouble in the future. I have been in manufacturing most of my career life and everyone knows plants are down sizing or moving operations out of the country. It is becoming a service nation and there is not enough to go around. Lawn care was is one of my hobbies but now I may have to live off it. No matter what kind of service I research, they all have the same issues in some form or another. You have to be multi-task and able to do all kinds of stuff to survive.

dpld 11-27-2012 11:27 AM

your welcome billy goat, you got the right approach as for foreseeing things down the road because lack of foresight is what causes most problems for new businesses and what you do today and how you do it will have profound effects on your business in the future.

too many guys are so concerned about getting things going now that they usually don't understand how it effects things going forward.
i understand that we have to worry about the present but in reality the future is all we got and today will be just like yesterday, old news.

i certainly did not invent the wheel in this business and i had my share of miscue's but from day one i always tried to follow the lead of the successful companies because in the end that is what we all want, success.
if it works for them it can work for you and me and for me it did.

the bottom line is we provide a service and the only thing that should concern a business owner is providing the best service with the highest integrity possible.
i leave the price cutting to places like walmart and costco because in this industry it cost money to provide the very best service and offering low prices only ends up costing the business owner profit, and when the business owner is not making enough profit he either fails at providing the best possible service or he cuts corners to make it up.
all of our work is based on time and outside of that it is equipment, insurance and other operating expenses.
we don't have a mark up in the service industry like retail locations do and it is very important to keep that in mind when selling work because anyone starting or running a business knows first hand how difficult it can be to provide top tier service when the money is not there.

plus, most home owners who want the best realize that when they look for a quality lawn outfit.

good luck.


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