Lawn Care Business Forum Lawn Care Business Book Lawn Care Business Blog Lawn Care Software
Home Forum Contract & Flyer Templates Blog Software Videos Podcast Calculators / Estimators Store Mower Review Design It Yourself Lawn Business School

Go Back   GopherHaul Landscaping & Lawn Care Business Marketing Forum > Business > General Business Discussions

General Business Discussions A place to talk about general business discussions.

Passing costs to clients


General Business Discussions

A place to talk about general business discussions.
Reply
 
Thread Tools Search this Thread
  #1  
Old 09-01-2012, 07:54 PM
CHEESE2009's Avatar
CHEESE2009 CHEESE2009 is offline
Dr. Scott - Ruler of the Underworld
 
Join Date: Mar 2009
Location: Switzerland, Grindelwald
Age: 73
Posts: 4,475
Rep Power: 10
CHEESE2009 is on a distinguished road
Default Passing costs to clients

When it comes to gasoline and other stuff, it's very easy to figure out how much the client should be charged.

Quote:
To do this, here is an example of this method.

This is what John Smith spent on gas for the season, he provides weekly service for all '10' of his clients.

May: $100
Jun : $150
Jul : $100
Aug : $150
Sept : $100
Oct : $150

100 + 150 + 100 + 150 + 100 + 150 = $750

750 divided by 6 months = $125 (your average cost per month)

125 divided by John's clients (10) = $12.50

12.50 divided by the number of weeks per month (4) = $3.12

-

Each client must be charged $3.12 per visit in order to cover gas expenses.
When it comes to something like a website, or a cellular phone, etc. What is the best way to add that expense to the customers bill?

If you take the same method to have them pay for your website/phone, the cost is rather high unless you receive more clients to balance it out.
|
e.g. If your phone bill was $100 and you had only one client, that client cannot possibly/willingly pay for your phone bill ($25) every week along with other fees.

What is the best method for adding this cost on to the clients bill?
Reply With Quote

Stop guess-timating. Learn how to estimate and make money! $$$
Mow Time Estimator Lawn Care Price Estimator Mulch and Topsoil Calculator Snow Plow Estimate Calculator


  #2  
Old 09-01-2012, 08:38 PM
bruces bruces is offline
new member
 
Join Date: Apr 2010
Posts: 828
Rep Power: 0
bruces is on a distinguished road
Default

Lawn care business tipsLawn Care Business Book
" What is the best method for adding this cost on to the clients bill? "
this would depend on how your bill's are written ,if they are done with a pen ,then use a damned pen ,if they are done with a printer ,then use your damned printer ,if they are written with cheese ,guess what ,just use a pen ,its a shame to waste cheese .

Anyways ,I find its easier to hide everything in a bill thats not totally broken down ,That way ,you dont end up with a wanker arguing over every little piece of info on the bill .Less is more .The gas,cell phone,etc all get placed in the basic lawn price .
Reply With Quote
  #3  
Old 09-01-2012, 08:48 PM
CHEESE2009's Avatar
CHEESE2009 CHEESE2009 is offline
Dr. Scott - Ruler of the Underworld
 
Join Date: Mar 2009
Location: Switzerland, Grindelwald
Age: 73
Posts: 4,475
Rep Power: 10
CHEESE2009 is on a distinguished road
Default

Quote:
Originally Posted by bruces View Post
" What is the best method for adding this cost on to the clients bill? "
this would depend on how your bill's are written ,if they are done with a pen ,then use a damned pen ,if they are done with a printer ,then use your damned printer ,if they are written with cheese ,guess what ,just use a pen ,its a shame to waste cheese .

Anyways ,I find its easier to hide everything in a bill thats not totally broken down ,That way ,you dont end up with a wanker arguing over every little piece of info on the bill .Less is more .The gas,cell phone,etc all get placed in the basic lawn price .

NOOOOOOOOOOOOOOO

I don't mean the actual bill I send out, my love.

I mean figuring out which percentage of some of my costs should go towards the client, more complex and expensive things.

For example, I can't see how dividing the cost of something very expensive among a tiny fraction of clients, it'd be too much for them to pay willingly. I could figure out a decent fixed amount, but I need some good ol' precision.


Love Cheese


... ran out of beer again... happens every night.. god dammit.

Last edited by CHEESE2009; 09-01-2012 at 08:52 PM.
Reply With Quote
  #4  
Old 09-02-2012, 12:47 PM
CHEESE2009's Avatar
CHEESE2009 CHEESE2009 is offline
Dr. Scott - Ruler of the Underworld
 
Join Date: Mar 2009
Location: Switzerland, Grindelwald
Age: 73
Posts: 4,475
Rep Power: 10
CHEESE2009 is on a distinguished road
Default

John is in the business of selling apples.

John buys apples for 40 cents.

John sells apples for $2.

John makes $1.60 profit.

-

Bill delivers flowers.

Bill is financing a vehicle to get him around town.

Bill is paying $500 per month for his vehicle.

Bill sells flowers for $1.

Bill has one customer.

Bill charges his customer $501, for one flower......

Reply With Quote
  #5  
Old 09-02-2012, 01:21 PM
SECTLANDSCAPING SECTLANDSCAPING is offline
new member
 
Join Date: Jul 2009
Location: CT
Posts: 1,912
Rep Power: 0
SECTLANDSCAPING is on a distinguished road
Default

I see where your getting at. I have all my overhead tied into my hourly rate. At the end of the year I take my income, expenses, and hours worked. Then I use 2 yr average for everything. I only use the 2 year average because if you buy a lot of equipment 1 year it will seem like your expenses are higher then they really are

example 1 yr
Gross $50,000
Phone $1200
Labor $8,800
etc expense $10,000
Net $30,000
divided by 1000 hours = $30 a hr profit
$1.2 per hour goes to phone
$8.8 per hour for employees
$10 per hour all other expenses
Reply With Quote
  #6  
Old 09-02-2012, 03:18 PM
stevef1201 stevef1201 is offline
Senior Member
 
Join Date: Apr 2010
Location: Central Florida
Posts: 947
Rep Power: 4
stevef1201 is on a distinguished road
Default

I figure My yearly expenses, living, business, payroll etc. then divide that number by the number of service weeks (my case its 46), divide that number by the number of billable hours per week (in my case 30) that is my hourly rate.

Or you could use the same method that everyone uses in business- charge 60 dollars per hour.
Reply With Quote
  #7  
Old 09-04-2012, 12:23 PM
Steve's Avatar
Steve Steve is offline
Administrator
 
Join Date: May 2003
Posts: 35,729
Rep Power: 10
Steve has disabled reputation
Default

Quote:
e.g. If your phone bill was $100 and you had only one client, that client cannot possibly/willingly pay for your phone bill ($25) every week along with other fees.

What is the best method for adding this cost on to the clients bill?
Scott,

I think this would under the topic of 'economies of scale'

economies of scale are the cost advantages that an enterprise obtains due to expansion. There are factors that cause a producerís average cost per unit to fall as the scale of output is increased

So, up to a certain point, your costs to perform your services for each customer will fall as you add more customers.

If you have 1 customer, and your cell phone bill is $100. That one customer will either have to cover the cost or you will have to eat the bill. But with 20 customers, each customer will only have to pay 1/20th of that bill.

Up to a certain point, your over head costs per customer will decrease. But as you add more trucks, more crew members, more management, more buildings to house the management, your costs climb again to the point where it's becoming counter productive.

Ideally there is a sweet spot for maximum profit you will have to find as you grow.

Does this help?
__________________
- Subscribe to my Lawn Care Marketing Blog Feed and get daily tips sent to you. Free!
Download your Free trial of Gopher Lawn Care Software.
Reply With Quote
  #8  
Old 09-05-2012, 03:36 PM
CHEESE2009's Avatar
CHEESE2009 CHEESE2009 is offline
Dr. Scott - Ruler of the Underworld
 
Join Date: Mar 2009
Location: Switzerland, Grindelwald
Age: 73
Posts: 4,475
Rep Power: 10
CHEESE2009 is on a distinguished road
Default Just sharing

With gasoline and maintenance alone, i'm losing one months pay from each client to service them for 6 months time. It's not that bad actually.

The markup for our service is pretty high, but it could be better - if only I moved to a new location LOL.

Our gross margin is about 82% for one month of lawn maint. - this is not counting employees, which would probably cause a noticeable decrease.

Our leaf removal has a gross margin of 87.76%, but it doesn't sell well, I believe it shares the same fate as our winter service.

-

There is honestly is no money to be made in lawn maintenance, but it's amazing for consistent cash flow, and takes care of itself which is fantastic, and common in most areas. However, it'll always be better in other locations than where I am.

Other services are what makes us a good profit, but sadly nothing else is selling well, so we continue to focus on mass clientele for lawn maint and hope for the best.

We will have to focus on time a little more. If we can increase our gross margin, which is almost impossible, we may be able to get somewhere.

In my city, we are already incredibly productive, it's scary to think this way. If any average lawn takes us longer than 8 minutes, it can effect us slightly.

-

I HOPE this field of business receives a little more recognition and respect, and that prices can increase to what they were many years ago. Rates are 60% lower than what they were all over.
Reply With Quote
  #9  
Old 09-07-2012, 10:44 AM
Steve's Avatar
Steve Steve is offline
Administrator
 
Join Date: May 2003
Posts: 35,729
Rep Power: 10
Steve has disabled reputation
Default

Quote:
Our gross margin is about 82% for one month of lawn maint. - this is not counting employees, which would probably cause a noticeable decrease.
Can you tell us what you mean by this? Are you saying that you are making an 82% profit on the amount you charge for lawn care?


from wikipedia - Gross margin (also called gross profit margin or gross profit rate) is the difference between revenue and cost before accounting for certain other costs. Generally, it is calculated as the selling price of an item, less the cost of goods sold (production or acquisition costs, essentially).

Some retailers use margins because you can easily calculate profits from a sales total. If your margin is 30%, then 30% of your sales total is profit.
__________________
- Subscribe to my Lawn Care Marketing Blog Feed and get daily tips sent to you. Free!
Download your Free trial of Gopher Lawn Care Software.
Reply With Quote
Reply

Bookmarks

Thread Tools Search this Thread
Search this Thread:

Advanced Search

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is On
Forum Jump

Similar Threads
Thread Thread Starter Forum Replies Last Post
Do you really know your costs? turf&tree General Business Discussions 3 01-12-2012 01:49 PM
passing out door hangers slmowing General Talk 2 12-21-2009 04:53 AM
Aerating Costs mcarlin Online Lawn Care Estimator - Help me bid this job 6 02-21-2009 01:39 PM
Passing the business on to children Steve General Business Discussions 5 10-30-2007 05:46 AM
Gas Costs JMM0254 General Talk 2 06-05-2007 08:10 PM

» Recent Threads
  RatingTitle, Username, & Date Last Post Replies Views
leaf removal
tlf59263
Yesterday 10:00 PM
Yesterday 10:00 PM
by tlf59263
0 30
Trimec
acrajchel
Yesterday 08:24 PM
Yesterday 09:18 PM
by ExtremeLawncareServices
1 30
What Fertilizer to Use?
acrajchel
04-07-2014 01:56 PM
Yesterday 08:27 PM
by acrajchel
4 177
Nationwide lawn care...
Billy Goat
Yesterday 05:21 PM
Yesterday 08:25 PM
by Dan Tanner
1 64
Looking for advice on a...
Tekeda1
04-13-2014 09:53 AM
Yesterday 06:58 PM
by Tekeda1
10 187
There has to be an...
CDLAWNCARE
04-14-2014 12:59 PM
Yesterday 04:06 PM
by Dan Tanner
6 124
Gopher Forum Discount!
BlackRain75
04-12-2014 10:44 PM
Yesterday 02:31 PM
by kslawn
8 193
hello
NFrailey
Yesterday 01:39 PM
Yesterday 01:39 PM
by NFrailey
0 32
These are the days on...
ExtremeLawncareServices
03-22-2014 09:12 AM
Yesterday 12:40 PM
by ExtremeLawncareServices
24 823
Any greenhouse operators...
GoGreenerKS
Yesterday 11:21 AM
Yesterday 11:55 AM
by GoGreenerKS
2 63
Help with weed liability!
Prolawnofchatt
Yesterday 09:10 AM
Yesterday 11:32 AM
by Steve
2 83
First Day Back!
BelleCityLawn1
04-09-2014 09:13 PM
Yesterday 11:16 AM
by Steve
11 265
Mow America
stevegredler
04-13-2014 01:02 PM
04-14-2014 09:53 PM
by kslawn
5 151
Power Broom
acrajchel
04-14-2014 07:46 AM
04-14-2014 12:47 PM
by CDLAWNCARE
2 75
google earth
CDLAWNCARE
04-12-2014 03:24 PM
04-14-2014 11:37 AM
by Steve
7 163
Say Hello !!!
Steve
03-19-2007 11:18 AM
04-14-2014 11:34 AM
by Steve
1,176 283,924
Pricing a Mulch Job
dmcalpi
04-07-2014 02:16 PM
04-14-2014 11:32 AM
by Steve
20 487
Equipment reviews
Greg'slawnandlandscape
04-09-2014 07:17 AM
04-14-2014 11:27 AM
by Greg'slawnandlandscape
13 345
Sulky and Turf Tracer
acrajchel
04-07-2014 01:44 PM
04-14-2014 10:51 AM
by Steve
8 251
Aerating Prices?
Dan Tanner
04-08-2014 03:16 PM
04-14-2014 10:31 AM
by Steve
13 359
Estimating help
acrajchel
04-11-2014 06:06 PM
04-14-2014 10:20 AM
by Steve
3 127
Lawn Renovation
stevef1201
04-11-2014 12:00 PM
04-14-2014 10:03 AM
by Steve
5 145
Need help bidding church...
GreenRidge Lawn&Landscape
04-07-2014 08:01 PM
04-14-2014 09:49 AM
by Steve
12 345
Hello all
Griff20114
04-12-2014 05:08 PM
04-14-2014 09:46 AM
by Steve
1 79
Step by Step Spring Lawn...
WarriorLawnscaping
04-10-2014 07:01 AM
04-14-2014 09:43 AM
by Steve
5 194
Jeff Cowden
jcowden
04-11-2014 07:27 PM
04-14-2014 09:39 AM
by Steve
1 83
Exmark Commercial 30...
Dan Tanner
04-11-2014 05:35 AM
04-14-2014 09:37 AM
by Steve
4 149
What Was Your Setup When...
superrman77
02-11-2014 10:53 AM
04-14-2014 08:04 AM
by acrajchel
21 1,511
Accepting credit cards,...
Darksteel
03-17-2014 08:01 PM
04-13-2014 10:31 PM
by AkersLawn
12 614
Small guy time to get a...
googus
04-08-2014 08:16 AM
04-13-2014 07:18 PM
by A. Kulak Landscaping
9 273
Weekly vs. Bi-weekly
CDLAWNCARE
04-12-2014 01:48 PM
04-13-2014 06:03 PM
by kslawn
9 280
Weed ID help
TwinBrosLC
04-12-2014 10:39 AM
04-13-2014 07:40 AM
by stevef1201
4 118
Lexington, KY
acrajchel
04-07-2014 01:06 PM
04-11-2014 09:49 PM
by acrajchel
1 99
Food Plot Management
BlackRain75
04-11-2014 10:20 AM
04-11-2014 03:51 PM
by Steve
4 105
Estimating a job
acrajchel
04-08-2014 11:07 AM
04-11-2014 03:32 PM
by Steve
6 245
New Boomless Sprayer!
BlackRain75
01-03-2014 01:01 PM
04-11-2014 03:25 PM
by Steve
11 969
Hello....
SWFloridaLawns
04-10-2014 06:15 PM
04-11-2014 02:28 PM
by Steve
2 104
Truck, Trailer,...
hawthornelawncare
12-23-2011 12:01 AM
04-10-2014 10:33 PM
by ExtremeLawncareServices
78 24,925
Trading Accounts
goodtimez
04-09-2014 05:42 PM
04-10-2014 01:55 PM
by Steve
2 129
Grass that has...
erock289
04-09-2014 10:21 AM
04-10-2014 01:52 PM
by Steve
3 149
Prowrap Trimmer Engine...
Steve
05-24-2006 07:05 PM
04-10-2014 01:09 PM
by Steve
10 2,182
1st annual Easter egg...
Greg'slawnandlandscape
04-09-2014 06:58 AM
04-10-2014 01:07 PM
by Steve
1 95
Hello everyone
aceslawnandgarden
04-03-2014 06:54 PM
04-10-2014 01:06 PM
by Steve
9 334
Weed control programs
Mallard91
04-02-2014 12:25 PM
04-10-2014 12:56 PM
by Steve
6 313
homeowner vs...
GoGreenerKS
04-07-2014 10:54 AM
04-10-2014 12:52 PM
by Steve
8 247
Hello
smgibson
04-07-2014 10:06 PM
04-10-2014 12:39 PM
by Steve
2 103
33" Cub Cadet Walk...
Dan Tanner
04-07-2014 08:49 AM
04-10-2014 12:35 PM
by Steve
5 173
They may never even see...
Darksteel
04-05-2014 11:40 AM
04-09-2014 05:13 PM
by goodtimez
7 306
$300 and counting
acrajchel
04-04-2014 10:03 AM
04-07-2014 10:34 PM
by Steve
12 476
Hello From North Texas
stanleylawncare
04-07-2014 01:14 PM
04-07-2014 10:15 PM
by Steve
1 96
» Popular Tags
2wd 4x4 article marketing blower butterfly gardens care charge christmas christmas light service client craigslist credit card customers echo exmark fall ferris financing flower bed four wheel drive franchise gopherhaul gravely gravely 34" zero turn health holiday how much to charge installation invoice kansas city kawasaki labor cost late lawn care lawn care business podcast lawn care business show lawn clarksville lawn service clarksville tn lesco lighting brass outdoor lights llp marketing mow mowing mulch new and restored landscapes new buisness new business office management oil podcast promotion redmax savannah scag schedule selling seo snow sole proprietorship sprayer starting a business stihl story subcontractor tree care unreasonable walker winter money making ideas zero turn
Powered by vBadvanced CMPS v3.1.0

All times are GMT -5. The time now is 05:10 AM.


(C) 2011 Riggs Publications - Terms of use & Privacy Policy

All times are GMT -5. The time now is 05:10 AM.

(C) 2011 Riggs Publications - Terms of use & Privacy Policy