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View Full Version : OK, Here's What I Plan to Charge


coyotekid
05-14-2005, 01:48 AM
I'm in a rural area, so keep in mind that I don't have loads of competition to compare my prices to. Also, I often get my rates compared to 7th graders trying to make a few bucks on the side...

With that said, here's how I plan to bid jobs:

I figure that it's going to cost me approx. $12 per hour to operate my Grasshopper 928D based on the lease, maintenance, and diesel.

By the time I figure in my mileage to job sites (my closest is 10 miles so far because that's the way it is out here in the boonies!), my operating expenses, and my wage (I would like to be making somewhere around $13 per hour), I figure that I'll need to bill right at $25 per hour for my big mower.

So...

I know most recommend not billing "by the hour" but how else can I figure out what I need to charge in order to make it worth my time?! Determining "what the market will bear" is way harder in a rural area.

Precision
05-14-2005, 07:59 AM
Unless your last job was $6.50 per hour you are aiming way too low for a net of $13 per hour. $13 net (before taxes) self employment tax is 30%. Now you are down to $9.10 per hour.

To figure out what you need to charge, mow a yard of a known size and see how long it takes. Example. 4 Acres took 1 hour including mowing, trimming and everything. Plus 20 minutes drive time. So with your proposed prices that would be $33 per cut. Or $8.25 per acre per cut. Now you need to bid on an account that is similar terrain but 10 acres. You know to charge $82.50 per cut.

Hopefully this example will help you to see why you need to charge more, as well as to help you see how to price in a way other than hourly.

geogunn
05-14-2005, 08:27 AM
...10 acres. You know to charge $82.50 per cut.

precision...dude--are you serious or are you jerking the guy's chain?

GEO :dizzy:

J Hisch
05-14-2005, 08:28 AM
Also, eventually you need to make money for capital re-investment. Remember office expenses, time you need to bill, postage etc. But You know best how to run your business. A bare minimum for me with something by it's self. I try to make on average 50 plus per man. When customers are grouped together we can averge much higher margins.

hoosiermommy52
05-14-2005, 09:26 AM
Coyote, I think you should figure how many hours would it take the customer to mow it him/herself with a regular mower. (either riding or push depending on the size of the yard) You are saving the customer that many hours of labor. You just happen to have better and faster equipment to make it more efficient. just mho

Tider6972
05-14-2005, 12:51 PM
coyotekid, you are pricing WAY too low. You will fail at this pricing, and that is a fact.

This kind of 'thinking' , along with more and more people cutting, is killing this industry!

coyote, please do yourself and the mowing industry a big favor, and think $1 a minute *at least*...that's right, $60 an hour - minimum! You'll know why in time.

If you are convinced that you can't get these prices, find another line of work ans you'll save yourself a LOT of *money* as well as heartache!

A+ Lawncare
05-14-2005, 01:35 PM
I'm in a rural area, so keep in mind that I don't have loads of competition to compare my prices to. Also, I often get my rates compared to 7th graders trying to make a few bucks on the side...

With that said, here's how I plan to bid jobs:

I figure that it's going to cost me approx. $12 per hour to operate my Grasshopper 928D based on the lease, maintenance, and diesel.

By the time I figure in my mileage to job sites (my closest is 10 miles so far because that's the way it is out here in the boonies!), my operating expenses, and my wage (I would like to be making somewhere around $13 per hour), I figure that I'll need to bill right at $25 per hour for my big mower.

So...

I know most recommend not billing "by the hour" but how else can I figure out what I need to charge in order to make it worth my time?! Determining "what the market will bear" is way harder in a rural area.

even the 7th grader knows to charge more than this.... stop smokin the grass & start cuttin it :rolleyes:

a 61'' ztr will cut 3-4 acres an hr, so since u said you operating cost is $12, your gonna "clear" $13 an hr, $13/ 3acres= $4.3 an acre thats $2.16 for an half acre.... the 7th graders down the road are at least charging $30 to cut an acre w/the murray 21''

do u just have the mower in this buisness or do you have an trailer, a p/u ( or the honda ricer, haha :rolleyes: )& weedeater & push mower & edger & the list gone on & on :waving: there's more variables in operating then just ur pop's ztr ur leasing & upkeep of that mower....

there's a 30% tax like some1 already mentioned so if you clear $25 thats actually $17.5 your making.... u have to at least charge $1 per min, some will even argue about that... some LCO charge $1.50

u won't make much on big jobs by charge the min rule though....

Precision
05-14-2005, 07:20 PM
precision...dude--are you serious or are you jerking the guy's chain?

GEO :dizzy:

I am very serious. I am trying to extrapolate out exactly why he can't run at these prices. I was hoping that my example would make it plainly obvious why his pricing scheme DOESN'T work.

My hope was that by seeing that his idea would have him pricing $82.50 for 10 acres. Obviously (I hope) a bad idea.

Envy Lawn Service
05-15-2005, 01:03 AM
coyotekid,

Even if you are cutting larger jobs, you are still gonna have to atleast double your rates to make anything to speak of. The "dollar a minute theory" is an even better figure, especially considering your mileage.

What you are going to end up finding out in time is that your direct on the job expenses are going to run dang close to your current rate you are considering. This might be hard to see in the beginning because you are crunching the numbers, ect. But what will happen in this situation is that everything will look OK at first and you'll feel OK taking your $13 hr wage out of the company cash flow. But you'll soon decide this job is too much punishment for $13 hr. Plus one day you'll wake up and realize your business couldn't really afford to pay your $13 hr payroll.

That $13 hr you pocket out of your company cash flow will be needed despirately at a later date to re-invest in the business to keep it afloat.

Then income taxes come due and you realize you make way less, work way harder, and have a lot more headaches than you would have if you were just an employee somewhere. Not good!

Todd's lawncare
05-15-2005, 03:10 AM
even the 7th grader knows to charge more than this.... stop smokin the grass & start cuttin it :rolleyes:

a 61'' ztr will cut 3-4 acres an hr, so since u said you operating cost is $12, your gonna "clear" $13 an hr, $13/ 3acres= $4.3 an acre thats $2.16 for an half acre.... the 7th graders down the road are at least charging $30 to cut an acre w/the murray 21''

do u just have the mower in this buisness or do you have an trailer, a p/u ( or the honda ricer, haha :rolleyes: )& weedeater & push mower & edger & the list gone on & on :waving: there's more variables in operating then just ur pop's ztr ur leasing & upkeep of that mower....

there's a 30% tax like some1 already mentioned so if you clear $25 thats actually $17.5 your making.... u have to at least charge $1 per min, some will even argue about that... some LCO charge $1.50

u won't make much on big jobs by charge the min rule though....
Can you say a a a a a a a a a a a a a a a a a a a a not an an an an an an

Todd's lawncare
05-15-2005, 03:13 AM
coyotekid, you are pricing WAY too low. You will fail at this pricing, and that is a fact.

This kind of 'thinking' , along with more and more people cutting, is killing this industry!

coyote, please do yourself and the mowing industry a big favor, and think $1 a minute *at least*...that's right, $60 an hour - minimum! You'll know why in time.

If you are convinced that you can't get these prices, find another line of work ans you'll save yourself a LOT of *money* as well as heartache!
And again the dollar will not help on the 15 20 25 min yards only the big one just charge 75 a cut you said there not many around there

coyotekid
05-15-2005, 01:05 PM
First off, I don't need your bullshit A+ A-hole.

You're a punk who probably takes a pocket protector and calculator to buy a Big Mac. Life isn't all about theory. And no, I don't have as much experience with dinky lawn mowing as you do. I've worked in heavy construction and mechanicing and am now trying to make a living in this line of work. And in the post about the Ford 550, you totally convinced me that you have no practical knowledge of equipment. Do you take your mower to Jiffy Lube for an oil change?

If you want to crunch numbers all day, be an accountant. Being successful in business is not simply crunching numbers.

So, with that...you do your thing, and I'll do mine. I can make mistakes myself just fine.


To everyone else:

Thanks for the good advice. I'm really hesitant to charge the kinds of prices many of you do because of the area I'm in. I'm going to meet with some friends who do this type of work in my area. They invited me over to discuss pricing, so that should give me a great baseline.

Thanks for all your help.

coyotekid
05-15-2005, 01:19 PM
Oh, and P.S. A+ Lawncare:

I run a Chevy 3/4 ton Duramax diesel with a 20 ft. tandem axle trailer and have all the other equipment, i.e. push mower, two trimmers, etc.

topsites
05-15-2005, 02:22 PM
coyotekid, you are pricing WAY too low. You will fail at this pricing, and that is a fact.

This kind of 'thinking' , along with more and more people cutting, is killing this industry!

coyote, please do yourself and the mowing industry a big favor, and think $1 a minute *at least*...that's right, $60 an hour - minimum! You'll know why in time.

If you are convinced that you can't get these prices, find another line of work ans you'll save yourself a LOT of *money* as well as heartache!

erm. .. $40/hour is normal here, that's what I charge and I DO charge by the hour, if they ask, I tell them: $40 / hour.
Sorry if it kills you, but it keeps me alive.
Usually to avoid the bs I just give them the estimate and don't tell them how much/hour, but for me I DO charge per hour, whether they know it or not.
$40 / hour is great money here in VA, how the hell anyone else makes more, yeah well they take forever getting things done, I'd like to see someone cut 10 yards/day by themselves with a WB, sustained day after day.
I charge $1/minute for the first 20 mins, then it's 50 cents/min until end of hour. 2nd and consecutive hours is $10/15 mins. But I do cut 1-acres in 1:15 - 1:30 (trim and all) so it's $50-$60 for the 1-acre yards and that's about standard.

Yeah maybe charge 30-35 / hour if you are very new (like first year) thou I did a lot of stuff my 1st year for 15-20/hour and I almost went out of business but then that is how I got experience and how else can you get experience if you can't get no work cauz your prices too high? Maybe 25/hour is not so bad, dno... check it out.

Tider6972
05-15-2005, 02:56 PM
topsites, my heart goes out to you.

Virginia is a great and beautiful state, I've enjoyed my visits there. I know from those visits that I could not survive on your rates, but that's just me.

best wishes.

Envy Lawn Service
05-15-2005, 02:56 PM
To everyone else:

Thanks for the good advice. I'm really hesitant to charge the kinds of prices many of you do because of the area I'm in. I'm going to meet with some friends who do this type of work in my area. They invited me over to discuss pricing, so that should give me a great baseline.

Thanks for all your help.

Now that sounds like a plan. Just make sure you are taking advice from those who are doing well for themselves earning money for the same quality of work you plan to provide... and do so with a similar company structure.... Solo/crew/crews/ect.

Otherwise they could be advising you on rates that could end up being your demise.

Anyways, my advice to you is to wipe the slate clean in your mind.
Here's how it works in Anytown USA.

It costs you what it cost you just to be in business.
A flat rate rather you leave the couch or not.
It costs you what it costs you per hr in direct expense to get to the job.
It costs you what it costs you per hr in direct expense to do the job.
It costs you what it costs you per hr in direct expense to get back from the job.
It costs you what it costs you per hr for all major, minor, and unforseen expenses.

All-in-All the best you can do is add up the known expenses and add some padding.

But in any event, it costs you what it costs you.... and your expenses could care less what the market will bear.... or what the other guy charges.... or what the last guy charged.... You have base expenses that will come due regularly, and then you have direct expenses. The more work you do and the farther you travel, the higher these expenses climb.... which is the exact same reason I have preached and preached to many that Wal-Mart tactics don't work in our industry.

But the bottom line is, you have all those costs. Then you have an amount YOU NEED to profit in order to support your business. In addition your business will also need to have enough profit left over after all is said and done to make payroll to cut you a check for the hourly wage YOU NEED.

That is the bottom line amount you will need to charge in order to stay in business, take a paycheck from that business that suits your needs, and remain happy. This really has ZERO to do with what you think people in your area will pay. Instead, this either makes or breaks rather you can achieve what you want or if you need to seek some other means.

In other words, either the market will pay what you need, or you will have to seek other business avenues in order to be paid what you want. That simple. Otherwise you start this business in vain and fail somewhere down the road.

As I said before, I'm pretty sure you are going to have to double you rates and maybe then some in order to take the pay you want and keep things afloat. I live in the "boonies" as you describe, and while I like the break, windshield time is very expensive. Both in travel expense and lost earning hours spent on the road. It gets worse with weather conflicts and schedule changes.

So it is much harder for us to do well as opposed to these guys who live in rich metro areas. They may have a 10 mile round trip for the day, where as we are likely to drive 10 miles one way to cut one lawn. This adds up. It's a positive for them and a negative for us. If you want to be in the field only 8 hours a day, start to finish, and be able to pocket 8 hours pay, you must have a formula for that day's route and a pricing scale for each job where you can afford to pay yourself $13hr from the time you leave the house until the time you return. You may have 1 or 2 hours of windsheild time that day. So that route must pay you $13 per hour to cruise down the road also. That must be built in.

Our game is not as easy as it is for some.

Tider6972
05-15-2005, 03:10 PM
ENVY says :
" But the bottom line is, you have all those costs. Then you have an amount YOU NEED to profit in order to support your business. In addition your business will also need to have enough profit left over after all is said and done to make payroll to cut you a check for the hourly wage YOU NEED.

That is the bottom line amount you will need to charge in order to stay in business, take a paycheck from that business that suits your needs, and remain happy. This really has ZERO to do with what you think people in your area will pay. Instead, this either makes or breaks rather you can achieve what you want or if you need to seek some other means. "

Well said ! May I repeat : " This really has ZERO to do with what you think people in your area will pay. Instead, this either makes or breaks [whether] you can achieve what you want or if you need to seek some other means. "

Too often, we set our own limitations * far too low * !