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A place to talk about general business discussions.
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  #11  
Old 01-16-2009, 10:59 PM
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I don't think this is too good of an idea. I mean my numbers are my numbers because of how i run my company I may charge $115 and hour per crew because they have uniforms, we know my numbers, we pay taxes, we are making an employee hand book, we pay ins., we pay to be in the BBB, we are licensed, We have nice/professional equipment and vehicles. . .the next guy does it for beer money so all he needs is gas money and some extra left over to spend at the bar . . . There are just too many variables
That is very true, but if you take your figures and you then average them with a guy doing it for beer money, then it gives the new startup a figure to consider. Otherwise they will most likely just shoot for the absolute lowest price they can come up with.

Why not offer them a higher price to shoot for? Then you don't have to worry about them coming in so low they just kill the industry pricing?

If they see they can make more money. They will charge more money and ultimately everyone will enjoy a benefit from a reduced pool of new businesses who lowball.

What do you think of that?
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  #12  
Old 01-16-2009, 11:09 PM
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Quote:
Originally Posted by Steve View Post
That is very true, but if you take your figures and you then average them with a guy doing it for beer money, then it gives the new startup a figure to consider. Otherwise they will most likely just shoot for the absolute lowest price they can come up with.

Why not offer them a higher price to shoot for? Then you don't have to worry about them coming in so low they just kill the industry pricing?

If they see they can make more money. They will charge more money and ultimately everyone will enjoy a benefit from a reduced pool of new businesses who lowball.

What do you think of that?
Thats worse than a low baller . . .Steve i truely believe that you are like me and hate low ballers . . .

that being said a low baller is easily seen from a customers stand point because they offer the absolute insane low price . . .

now then, why would i want to give them something that is going to make them competitive when in the end they are still low ballers?

Low ballers don't mean just low prices - it means un insured, un licensed, un PROFESSIONAL !!!!
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  #13  
Old 01-16-2009, 11:23 PM
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now then, why would i want to give them something that is going to make them competitive when in the end they are still low ballers?

Low ballers don't mean just low prices - it means un insured, un licensed, un PROFESSIONAL !!!!
Well here is my view on this. When anyone starts out with anything, they have no idea what they are doing.

As we see on the forum, we have many many new business owners trying to figure out what is the going rate for certain basic services they want to offer.

When no one tells them or they can't find it, they tend to bid very low. Because they bid low, they can't afford to buy insurance. They probably aren't paying taxes on the money they make. Ultimately there is this class of small business owners who if they just had a little knowledge, would have an ah-ha moment and say OH I need to be charging around $X per hour in order to do this properly.

Now when other lawn care business owners are out giving bids, ideally they are no longer competing on price but instead on who seems to please the customer the most, provide the best service etc.

If we don't educate ourselves and others, there is no growth.

What's your view?
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  #14  
Old 01-17-2009, 12:19 AM
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Wow, Tuff crowd in here!
Ok, well I see both sides of this argument I suppose.

On one hand we have the lowballers, who yes if they are intelligent will reach out to learn & better themselves & eventually become a legitimate business. I have always helped & advised anyone who asked me for help & wanted to do the right thing as some others both in my area & on this forum did for me back when I really needed the guidance. though at the same time most half-assed low ballers don't stay in business long enough to make much a dent in my marketshare as far as I can tell (I could be wrong but business is good so I don' worry about it all that much) There are a good portion of the alchoholic lawn mowing crew sect that would only take such information (as stated above) & use it to charge more, while still not doing anything the right way. So I am not a fan of the idea of just posting my numbers for the world to see & for "Joe's drunken lawn service" to use against me.

On the other hand If somebody is seeking help, you should help them. For me I want to know WHO knows my numbers. I am in Florida, my figures will be useless to anyone outside of my area as we are in different markets so they don't need em'. Anyone in my region can reach out for help. If I feel after a short conversation that they are genuine in their desire to run their business properly or get off on the right foot, I offer them all the information & advise I can. From pricing, to policies & precedures, & from where to buy liability insurance to the best friggen trimmer line for the buck.
I have recieved help from tons of guys (Jamie-all aspects, Tim-real huntin', ritchiem, Steve, & on & on....) I have also helped a ton of guys out (Little's, Phil, Justin, Barry etc....)
But Steve, I am not filling out a "I charge $___x____ for mowing ____sq ft__
& $___Y___ for trimming ______ tree" chart man. Sorry bud , I'm not with ya on this one. Somethings with great intentions can be business suicide.
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  #15  
Old 01-17-2009, 12:21 AM
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Quote:
Originally Posted by Steve View Post
Well here is my view on this. When anyone starts out with anything, they have no idea what they are doing.

As we see on the forum, we have many many new business owners trying to figure out what is the going rate for certain basic services they want to offer.

When no one tells them or they can't find it, they tend to bid very low. Because they bid low, they can't afford to buy insurance. They probably aren't paying taxes on the money they make. Ultimately there is this class of small business owners who if they just had a little knowledge, would have an ah-ha moment and say OH I need to be charging around $X per hour in order to do this properly.

Now when other lawn care business owners are out giving bids, ideally they are no longer competing on price but instead on who seems to please the customer the most, provide the best service etc.

If we don't educate ourselves and others, there is no growth.

What's your view?
I say don't give a man a fish so he can eat, give him a fishing pole so he can feed himself . .. Does that make sense?

When some one ask me how much to charge i tell them as much as they can get!

then I ask them what thier cost are . . . don't tell a low baller what price to charge tell him how to figure it out

In school they didn't teach us that two plus two was 4 they taught us that you take a number plus a number and it equals the sum of the numbers.

Teach them how to price not just tell them what is the "going rate"
the "going rate" is the going out of business rate
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  #16  
Old 01-17-2009, 01:21 AM
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Hi Chuck,

Quote:
I have always helped & advised anyone who asked me for help & wanted to do the right thing as some others both in my area & on this forum did for me back when I really needed the guidance. though at the same time most half-assed low ballers don't stay in business long enough to make much a dent in my marketshare as far as I can tell (I could be wrong but business is good so I don' worry about it all that much)
Yes new lawn care business owners will come and go because they under price however there is always going to be a steady stream of them and one that fails is replaced by 2 or 3 or 4 or ...... others.

I would say think of this as a virtual union concept. The union comes up with a price and the factory pays it. The union protects it's employees with a collective awareness of bigger pictures that the individual is unaware of.

If your state shoots for an average of $35 per lawn and you know this, you would shoot for it too.

When everyone shoots for a collective price per service, ultimately you help take price competition off the table and you focus on other issues to sell a service. Like how is the service regardless of the price.

In the big picture you benefit from this.

That's my view at least. This is all a big experiment and we will see how it goes, but wouldn't you like to know how your prices compare with others? Wouldn't you feel pretty good if you knew you were above the normal prices and you could get that because of your service? Or what if you found you were below the average, wouldn't you like to increase your prices? Wouldn't anybody?

DJ,

Quote:
When some one ask me how much to charge i tell them as much as they can get!
I agree, and then I would ask, how much can I get? What is the average in my area? I would like to know.

Regardless of my costs, I want to know how much I can get.

Knowing your costs helps you know if you are going to make a profit or take a loss but knowing your costs does not let you pick a price to charge in a vacuum without regard of competitors. You really need to know a range to shoot for.

If my costs are $100 per man hour and I decide I need to charge $120 per man hour to perform lawn care and the average in my area is $50 per man hour, I better have some super duper amazing service to justify. But customers are not going to care what my costs are when I charge them. Customers are going to see what the going rate is and then factor, how much they prefer me over others. How much better a job I do than others. etc etc

What do you all think of this?
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  #17  
Old 01-17-2009, 01:25 AM
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Quote:
Originally Posted by musician/lawnman View Post
I have also helped a ton of guys out (Little's, Phil, Justin, Barry etc....)
Thanks Chuck

Btw, I assume your a busy guy, you don't get the chance to chat to me anymore brother, what's up
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  #18  
Old 01-17-2009, 01:36 AM
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Quote:
Originally Posted by steve View Post
Dj,



I Agree, And Then I Would Ask, How Much Can I Get? What Is The Average In My Area? I Would Like To Know.the Average Doesn't Matter. Figure Out Your Cost Throw In Your 30% Owner Draw And 10 To 15 Percent For The Company Retained Earnings And That Is What You Have To Charge!!!!

Regardless Of My Costs, I Want To Know How Much I Can Get. it Doesn't Matter!!!! Your Numbers Tell You What You Better Get!!!!

Knowing Your Costs Helps You Know If You Are Going To Make A Profit Or Take A Loss But Knowing Your Costs Does Not Let You pick A Price To Charge In A Vacuum Without Regard Of Competitors. You Really Need To Know A Range To Shoot For.a Price Should Be A Strategically Figured Number.

If My Costs Are $100 Per Man Hour And I Decide I Need To Charge $120 Per Man Hour To Perform Lawn Care And The Average In My Area Is $50 Per Man Hour,then You Need To Stop Right There And Find Something Else To Do Or Decide If You Wanna Cut Corners Like Every One Else I Better Have Some Super Duper Amazing Service To Justify. But Customers Are Not Going To Care What My Costs Are When I Charge Them. Customers Are Going To See What The Going Rate Is And Then Factor, How Much They Prefer Me Over Others. How Much Better A Job I Do Than Others. Etc Etc

What Do You All Think Of This?
Great Thread Guys!!!!!!!!!!!!!!
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  #19  
Old 01-17-2009, 02:57 AM
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the Average Doesn't Matter. Figure Out Your Cost Throw In Your 30% Owner Draw And 10 To 15 Percent For The Company Retained Earnings And That Is What You Have To Charge!!!!
Is this a standard view and if so, why is this a standard view? Do you feel most lawn care businesses follow this concept?
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  #20  
Old 01-17-2009, 09:39 AM
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I agree with Dj in that " don't tell a low baller what price to charge tell him how to figure it out "

You have a great cost estimator on here now. Keep teaching them to use it or something similar.


Justin,

Sorry man, It's not that I've been avoiding ya by anymeans, it's just that skype seems to pops up with messages and spam & bimbetts named "candy" or "bubbles" who just wanna "chat" (get you to check out their **** site)about 400 times for every one time somebody I know contacts me on it. So I have it set as "Away". Things drives me crazy.
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