Need Help Breaking "Per Hour" Barrier... Please Help

[IVPropertyMaintenance]

Alright so my rookie mistakes are catching up to me. I started my business in the Spring of last year (2011). The valley I live in has a relatively low population and the average wages are low. Therefore, I found out what competitor are charging and established my going rate based on that. A couple of the local "competitors" who were also one man crews we charging between $15-20/hr. They have been around for a while and are pretty well established so I figured with me just starting out I would go on the low end. I chose $15/hr to be my charging wage for yard care services. This was fine but definitely not making the money I should be making. Now I am going into this new year with a bunch of customers that are used to paying $15/hr when I need more to keep my head above water. During the winter, I devised some service packages that charge customers a monthly rate that is spread through all 12 months. This was a nice change I think because it will ensure me income throughout the winter as well. Anyways, so I switched a lot of them onto that which is good, but there are still customers that are not going to like to hear the more per hour story. Also, I have already found myself telling customers $15/hr this year, just out of instinct! I live a pretty modest lifestyle and don't need to get rich off this, but an extra $5/hr this year would really help out. Any ideas on making the transition, or should I just go to bidding job? One idea I had is to tell my customers that I will work for $15/hr but if i'm running equipment (which is almost all the time) I will be charging an extra $5/hr for gas and wear & tear on the equipment. I don't know guys, inspire me....

__________________
IV Property Maintenance
Providing Quality and Reliability
www.ivpropertymaintenance.com

[CS-LawnService]

Lawn care business tips

I never give a price per hour I just figure the cost of the job and give them the total in the estimate no need for them to know i make 45 an hour on there lawn

__________________
Chris Hoeltke
serving Winchester Virginia and surrounding areas
C&S Lawn Service

[Steve]

Here is my view and others may see it differently.

Last year seems to have been a year where you attracted customers with price first and quality somewhere after that.

Since these are price conscious customers, there is a good chance they won't pay more. We have seen this happen to others on the forum and when they tried to raise their prices to that customer base, the customers left in droves, so be prepared for that. I wouldn't try to increase my prices across the board with all of them or you might find yourself without customers. Try raising your prices with smaller groups at first.

You also will need to find new customers this year that are not price focused and are more focused on quality. Quality focused customers would be easier to raise prices on as long as the quality was there.

Does this help?

[CHEESE2009]

Raising prices is no fun.

What sucks, is that I have had certain clients for so long, I take pride knowing I've been their guy for years... Raising the prices would take that away from me LOL.

If you really underbid a job, accept cash only, and pocket that crap. Maybe even use it to hire a couple of Mexicans to increase your productivity.

[willshome]

I lock in my customers that have be with me sense the start at my lowest price and new customers pay normal rate. This is a thanks for helping me start-up and make a name for my business.

[Hedgemaster]

Charging by the hour is easy. It's also crazy.
You're going to screw yourself in a big way if you continue that way.

Price it at what you need to be paid to do it and be done with it.

I try to make between $30 and $60 "an hour" on jobs - I sure as heck am not telling a client that. Even at $30/hr, I'm not making much, but it sure SOUNDS like it to a client. Hourly rates scare clients away because they compare them to what THEY make "per hour".

Also, people want to know "What will it cost to do the job?" - period.
How long it takes you to do said job is irrelevant and your client shouldn't be left wondering what it will cost, and be sitting there with a stopwatch trying to figure it out while you work.


"It will cost $35 to mow, trim, and blow any clippings from hard surfaces."

One day it may take you 30 minutes (yay!) to do that lawn and another it may take 45 because you did a little extra, or had an equipment problem... why bother with an hourly rate? By doing so, you never get to enjoy a bigger profit because you were able to complete the job faster than expected.

[SECTLANDSCAPING]

I agree with Hedge,

If I was making $15/hour I would quit. I pay guys between $12-$15 hour. The first leaf clean up I did I bid at $300 and it took me and my friend 10 hours. Boy was I a sucker.

hourly rates suck... The worst part is there watching what time you show up and leave. I would consider adding a stop charge or a higher first hour. This is what plumbers, carpenters do. $125 to show up then $75 a hour after.

[Hedgemaster]

I have many jobs that take me 30 minutes.

So if I were to charge "$15/hr", I'd be asking just $7.50 to mow those lawns?


This does not compute. Yeah, I'd quit too.

[sunsetlandscaping]

Boy oh boy, how many times have I been down this road? More than I can count on my hand. Before I was just trying to complicate things. And it is confusing at first, until you get a feel for it. Try mowing your own grass or a friends and keep track of the time. Then, get a measuring wheel and figure out how many sq. ft. it was you just mowed, and you will get the hang of it. I'm not saying to take a measuring wheel with you to every job, but when your first starting out, it might be the thing to do. Hell, I might even do it this year to refresh my memory.

[thom]

Originally Posted by IVPropertyMaintenance

Alright so my rookie mistakes are catching up to me. I started my business in the Spring of last year (2011). The valley I live in has a relatively low population and the average wages are low. Therefore, I found out what competitor are charging and established my going rate based on that. A couple of the local "competitors" who were also one man crews we charging between $15-20/hr. They have been around for a while and are pretty well established so I figured with me just starting out I would go on the low end. I chose $15/hr to be my charging wage for yard care services.

This was fine but definitely not making the money I should be making. Now I am going into this new year with a bunch of customers that are used to paying $15/hr when I need more to keep my head above water. During the winter, I devised some service packages that charge customers a monthly rate that is spread through all 12 months. This was a nice change I think because it will ensure me income throughout the winter as well. Anyways, so I switched a lot of them onto that which is good, but there are still customers that are not going to like to hear the more per hour story.

Also, I have already found myself telling customers $15/hr this year, just out of instinct! I live a pretty modest lifestyle and don't need to get rich off this, but an extra $5/hr this year would really help out. Any ideas on making the transition, or should I just go to bidding job?

One idea I had is to tell my customers that I will work for $15/hr but if i'm running equipment (which is almost all the time) I will be charging an extra $5/hr for gas and wear & tear on the equipment.

I don't know guys, inspire me....

Dont quote an hourly rate.Bid the job to make monry.If a customer wants to know how many hours you are billing for,tell them you dont have a set number of hours for the job.
Get a signed contract.