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Tn Lawn Man
05-09-2005, 10:40 AM
Making an observation.....

I have noticed that everytime there is a new person that comes on here and asks what to charge everyone barks at the poor fella that he should know his operating costs and charge accordingly.

Then on the other side of the coin everyone goes insane when a lowballer is mentioned.

Let's do the math for a moment.

When I first started in this business I was a part timer with a homeowner's set up: 21" push, cheap weedeater, cheap blower....total investment <$500. (No insurance....don't start, that is another thread in itself)

So my total operating costs was gas plus what I wanted to make an hour. To be perfectly frank if I would have taken advice from most on this board I could/should have mowed a lawn for about $15.

Luckily for me, I had a mentor who helped me out with pricing and so I charged fair market rate.

I say all of this to say that we here on Lawnsite can be our own worst enemies. We say we hate lowballers yet we never encourage new guys to charge market rate.

I would think that our answer to new guys when they ask what they should charge should be...."As much as your market will bear as long as you are within your operating costs". And, then we should proceed to give them examples.

This thread isn't meant to be a flame. In fact, my main reason behind it is to get guys charging market rate and not lowballing (which we all hate).

Let's help the new guys learn how to price correctly so they don't lowball the industry any worse than what is going on.

anothertractor
05-09-2005, 10:55 AM
This sounds good to me. I am new and I am still part-timing it for right now. Finding my operating cost is something that I would like mor info on. I have heard people say that your big ZTR costs $8 an hour. If I only put 150 hours per year, is that figure correct? What if I put 500 hours on it in a year? I can figure my fixed costs for the year but since I work fewer hours than a full timer, are my costs per hour higher than someonethat works 1200 hours per year?

Thanks.

SproulsLawnCare
05-09-2005, 11:46 AM
This sounds good to me. I am new and I am still part-timing it for right now. Finding my operating cost is something that I would like mor info on. I have heard people say that your big ZTR costs $8 an hour. If I only put 150 hours per year, is that figure correct? What if I put 500 hours on it in a year? I can figure my fixed costs for the year but since I work fewer hours than a full timer, are my costs per hour higher than someonethat works 1200 hours per year?

Thanks.

I'm probably wrong about this, but I think that the operating cost should be the same whether you run it for one hour or 1000 hrs. The only thing is your overhead would be extremely high ($7,000 to mow 1 hr). That is obviously an exaggerated example, but same point. But with not taking overhead in account, it would be useful to hear from those who have used their equipment for several years and have a running history of operating cost. General consensus would say that ZTR's run for $5 to $8 per hour; what about trimmers, stick edgers, wb's. etc.?

DFW Area Landscaper
05-09-2005, 12:34 PM
Another similar discussion I started some time ago:

http://www.lawnsite.com/showthread.php?t=99749&highlight=costs

Later,
DFW Area Landscaper

Tn Lawn Man
05-09-2005, 06:15 PM
My main point to this thread is too inform the new guy to set his prices as high as market will bear and not on his operating costs.

If we keep telling them to figure their operating cost it will always be lower for a new guy part timer.

Bigger operations are going to have higher overhead yet they make a bigger profit due to size.

I just don't want us shooting ourselves in the foot in this industry.

Flex-Deck
05-09-2005, 08:49 PM
I'm probably wrong about this, but I think that the operating cost should be the same whether you run it for one hour or 1000 hrs. The only thing is your overhead would be extremely high ($7,000 to mow 1 hr). That is obviously an exaggerated example, but same point. But with not taking overhead in account, it would be useful to hear from those who have used their equipment for several years and have a running history of operating cost. General consensus would say that ZTR's run for $5 to $8 per hour; what about trimmers, stick edgers, wb's. etc.?

Operating costs definitly go down on a per hour basis if you are running reputable, high quality mowers. I ran a JD 332 for 5000 hrs, (cost originally $6100) therefore it basically cost a little over a dollar an hr. cost of equip. - in fact it is less than that because I just sold it for $1800. New owner loves it.

How can you say 1 hr. or 500 makes no difference?

I GUESS I AM ASSUMING THAT DEPRECIATION AND BUYING NEW EQUIPMENT WHEN THE OLD STUFF WEARS OUT IS AN OPERATING COST?

I GUESS I AM ASSUMING THAT THE YEARS SITTING IN THE SHED ONLY PUTTING ONE HR. A YEAR ON IT IS GOING TO LOWER ITS VALUE - I WILL GUARANTEE YOU THAT PEOPLE BUYING USED EQUIPMENT WILL PAY MORE FOR A 4 YEAR OLD MACHINE THAN AN 8 YR. OLD MACHINE, I DON'T CARE WHAT CONDITION IT IS IN.

Now for the basics of LCO business.
1. A one acre yard in any part of the country is worth a range of fees which is specific to different parts of the country. - The higher fees going to those that are real LCO's - (Trim, Straight lines, Blow, etc) And the lower end of the fees going to those who just move in and mow, no matter how, just get the grass shorter.
2. The customers in any part of the country are all different, yet all the same. Some what the real manicured look, with the trimmings, and some just want the grass shorter.
3. With this in mind, there are no lowballers, just people happy with the service and people happy with the money they are willing to pay.

NJSalesPro
05-09-2005, 08:50 PM
Ok, so I have an appointment with a law firm who needs lawn care. What' s the best way to charge the client if he wants me to stop by once a week vs once every other week. I prefer a flat-fee method over an hourly fee.

I'm in NJ where lawn care people are a dime a dozen - so I'm thinking 75 dollars per cut. If I come by 4 times a month, that's 300.00. Does this sound reasonable?

Anyone else in NJ?

Flex-Deck
05-09-2005, 09:00 PM
Ok, so I have an appointment with a law firm who needs lawn care. What' s the best way to charge the client if he wants me to stop by once a week vs once every other week. I prefer a flat-fee method over an hourly fee.

I'm in NJ where lawn care people are a dime a dozen - so I'm thinking 75 dollars per cut. If I come by 4 times a month, that's 300.00. Does this sound reasonable?

Anyone else in NJ?

MY GOSH - READ MY POST AGAIN - There is no way you can charge by the hour. What mower do you have? - You going to charge $90 per hr. with a 21" lawn boy? Or are you going to charge $ 10 per hr. with a 60" ZTR - - - - - - - - - - - - - - - I have repeated this on this site so many times, I think I am brain dead or the you all are brain dead, but I think it boils down to WHAT IS THAT YARD WORTH IN YOUR AREA - YOU ARE RESPONSIBLE FOR GETTING MOWERS THAT ARE THE RIGHT SIZE, AND DO WHAT IS NEEDED TO DO THE YARD FOR WHAT IT BRINGS IN YOUR AREA, AND LET YOU MAKE A PROFIT. WAKE UP. IT IS EFFICIENCY - FORESIGHT - PLANNING - TAKING A CHANCE ON SOME NEW TECHNOLOGY!!!!!!!!!!

NJSalesPro
05-09-2005, 09:18 PM
Yeah I understand the concept Efficient = Profit. But you have to have a base rate to use to charge someone. I'm using a 21" deck mower for now.

Flex-Deck
05-09-2005, 09:22 PM
NJ - ?? What is the going rate for the property in New Jersey - If you can bring pictures to them, and convince them you are going to do more for them than the last guy, you can raise the going rate a bit, if you can not do that, you had better be the low bid. Period, end of arguement!@!!

SproulsLawnCare
05-10-2005, 02:52 AM
Operating costs definitly go down on a per hour basis if you are running reputable, high quality mowers. I ran a JD 332 for 5000 hrs, (cost originally $6100) therefore it basically cost a little over a dollar an hr. cost of equip. - in fact it is less than that because I just sold it for $1800. New owner loves it.

How can you say 1 hr. or 500 makes no difference?



I can say it makes no difference because I said OPERATING COST, not OVERHEAD. The cost of replacing fuel, oil, filters etc. are the same for 1 hr or 500 hrs. The overhead of buying the equipment or depreciation is not the same as the operating cost of the equipment. If I choose to buy a JD 1600 Turbo for $52,000 to mow residential, it would be my own fault for creating such a large overhead. The cost to operate it for an per hour is still the operating cost. I made the point of separating the two in the post I left earlier. I think most people here already know what their individual overhead is, but many of the newer people don't have the experience to know how much it cost them to operate the machine per hour.

One should never ASSUME, as they say!

NJSalesPro
05-10-2005, 09:08 PM
operating costs and over-head costs are still costs. Obviously, a faster 50,000 dollar mower will get the job done faster, but it doesn't raise your price to charge a client.

cantoo
05-10-2005, 09:33 PM
Flex for some reason people can't seem to understand it shouldn't matter what you cut the lawn with. The lawn is worth x dollars to cut regardless of what you cut it with, bottom line. If you cut with a 21" and it takes 2 hours you get x dollars, if you cut it with a 60" ztr you still get x dollars. The lawn is cut. I doubt that customers care how you cut it as long as it's cut, of course if you drive a huge machine on a tiny lawn and make a mess that's totally different.
Of course we all have customers who complain because it only takes a few minutes to cut their lawn with our big equipment but of course the equipment cost is higher so we need to cut more lawns to pay for it, but the price per lawn should still be the same.
Now where it gets sticky is when someone who has a big efficient unit can price below the market and get all the work they want and still make good money when their low overhead is taken into account. That's the American way.

GreenUtah
05-11-2005, 01:29 PM
Ok, so I have an appointment with a law firm who needs lawn care. What' s the best way to charge the client if he wants me to stop by once a week vs once every other week. I prefer a flat-fee method over an hourly fee.

I'm in NJ where lawn care people are a dime a dozen - so I'm thinking 75 dollars per cut. If I come by 4 times a month, that's 300.00. Does this sound reasonable?

Anyone else in NJ?

What is the size of the property, you are using a 21" mower, how long will it take to cut? How much trimming, edging, blowing is there to do? Are you including anything else like bed maintenance? What is the distance from your shop/home or the previous and next customer? What is your mileage cost(fuel/insurance/depreciation) for you vehicle, since I assume you are not walking there. How will you store and maintain your equipment and what are those costs? What is the service life of the equipment you have and what will the cost for replacement equipment be? What is your plan for moving up the ladder of LCOs and how will you set your profit margins to accomodate that? What is your marketing and customer service costs? Billings & collections? Overhead for your office, even if it's your truck space, you still need a phone and some paper, right? All these factors have to be considered for YOUR exact situation before any kind of price can be even begun. Any price that we tossed out based on what we do in our own little worlds is irrelevant. If you want to grow a company, get some basic understanding of your true costs so that you may find customers that are profitable and fit within your skills and equipment for maximum productivity. Helter skelter will make you roadkill in a season or two.

No one plans to fail, they fail to plan.

Tn Lawn Man
05-11-2005, 04:48 PM
Price


A lawn should be priced at the most you can get for it in your area PERIOD!!!!!!

If you choose to work cheaper then you are cheating yourself.


Equipment

NOW, the equipment used to cut that lawn is totally different. That is a different subject all together.

To maximize your profit you should buy/use the most efficient lawn mower for the lawn you are cutting.
Example: for a 20 acre flat, open apartment complex you would need a larger Z. One you can afford and still be productive on your other lawns.
Whereas a small postage stamp lawn may benefit from a 21" mower.

But you sure as heck do not mow 20 acres with a 21"!!!!!!


And Don't Forget!!!

Whether you are mowing with the correct mower for the lawn or not you still set the price as high as the market will bear!!!!!!!!

tx_angler
05-11-2005, 05:01 PM
Ok, so I have an appointment with a law firm who needs lawn care. What' s the best way to charge the client if he wants me to stop by once a week vs once every other week. I prefer a flat-fee method over an hourly fee.

I'm in NJ where lawn care people are a dime a dozen - so I'm thinking 75 dollars per cut. If I come by 4 times a month, that's 300.00. Does this sound reasonable?

Anyone else in NJ?

A word of advise about a law firm - GET YOUR MONEY UP FRONT EVERY TIME! These people tell lies and sue other people for a living. They absolutely live to renegotiate contract terms as they go along. In every dealing I've ever had with a law firm I've lost time and money. With years and years of experience I have found that you can tell when they are lying to you - If you look real close you can see their lips move.

Mike Fronczak
05-11-2005, 05:03 PM
Origally posted by Tn lawn Man.

A lawn should be priced at the most you can get for it in your area PERIOD!!!!!!

If you choose to work cheaper then you are cheating yourself.


Equipment

NOW, the equipment used to cut that lawn is totally different. That is a different subject all together.

To maximize your profit you should buy/use the most efficient lawn mower for the lawn you are cutting.
Example: for a 20 acre flat, open apartment complex you would need a larger Z. One you can afford and still be productive on your other lawns.
Whereas a small postage stamp lawn may benefit from a 21" mower.

But you sure as heck do not mow 20 acres with a 21"!!!!!!


And Don't Forget!!!

Whether you are mowing with the correct mower for the lawn or not you still set the price as high as the market will bear!!!!!!!!



I couldn't have said it better. If you can't make money at the prices the market will bear.....get another occupation, or your going to have problems.