Scrub or lowballer?

[Patfo]

Just starting my first year F/T and have a question: What do you consider a scrub or lowballer? I'm starting w/ a 36in w/b with a Proslide, couple of trimmers, backpack blower, and hedge trimmers, all of which are paid for. Only payments are on my used truck. I'm mowing residential accounts. If I can charge $8 less to cut a yard than a big operator who has 3 different crews all outfitted w/ Dixie's,walk behinds, new trucks and plows, has to pay employees and insure them all, do you consider me a scrub or lowballer? My very low overhead may allow me to do this. I am insured and pay taxes- no license required here. I am also a solo operation. Just a question. THANKS!

[oneEXMARKfan]

As long as your are going legit, I wouldn't call you one, but some people would want you to keep the prices high to help the "going rate" stay up.....Never used a Proslide, but from some of the post I've read, you might have to charge more to buy replacement parts for it.... I've heard good and bad about them....(I'm a newbie and may be totally wrong.if so sorry all!)

[AVRECON]

I wouldn't be cheaper, and your overhead might be more than you realize. Look at it this way if the customer had to go out and rent the equipment that you are using, What would it cost him? The way I look at it from the time I pull out of the driveway and pull back in all of my equipment has to make money. The mower needs money to pay for itself so that I can buy a new one, the trimmers etc.Don't lowball because you think you can, you see this drives the market price down. The guy thats doing the lawn you are talking about may be the real lowballer here.

[LoneStarLawn]

Remember he will be faster than you on those lawns...therefore his efficiency will make up for his higher overhead...so thinking that your lower price is justified may be wrong...

[Patfo]

If I know an operator has a particular account I will not try to undercut that account and take it away. I just want to make that clear.

[KirbysLawn]

Originally posted by Patfo
Only payments are on my used truck. I'm mowing residential accounts.

What about commercial auto insurance, liability insurance, & theft insurance (option). Will you be getting a license to apply fertilizers? Just a little to consider.

Ray

[Craig Turf Management]

In my opinion, you are not a scrub if you practice your business in a professional manner. You must educate yourself in the science of turf care and follow common industry standards. You must obtain all required certifications and license. Carry liability insurance. Pay your fair share of taxes.
Lowballer? Your cost of doing business whatever that might be plus the profit that you desire equals your price. That is a different figure for everyone. If your overhead, cost of doing business is less than mine, you can charge a little less to do the job than me. You are not a lowballer in my opinion, you are my competition.
This is just my opinion, hope it helps.
Bill

[jeffyr]

Why would you ask for less money than the going rate in your area ? Over time this brings prices down for everybody. Not to mention, after a couple of years you may need or want more (say $8 more) and you will have a tough time raising prices to that level. I worked in a different industry and out of school I thought I could do the job for less than someone with high overhead. Sounds great in theory to get more work. However, it is tough not to get a reputation as "the cheap guy". This is a reputation nobody wants. Before you know it you may be cutting corners on jobs since you are not happy with the salary and then the title of cheap guy could be yours.

My 3 cents

[HOMER]

As you grow your business you will need more money. If you start out lower than everybody else you are going to have a tough time raising your prices to meet your new demands. I wouldn't start off $8.00 cheaper, maybe 2 or 3 but not 8! If you intend to do this full time then you intend to grow. Don't sell yourself short.

[1st impressions]

I do not care what your "overhead" is. If you know that you are $8 less then that means you know what the prevailing rate is. Why drop that much? You hurt the whole industry by charging 20-35% less.

Why not charge $2-3 less and use professionalism and salesmanship to get and keep clients. Even if you only have
20 accounts, that is $100 more a week or at least $3000 more
a year.

One day you will have more equipment and employees. Good luck raising your rates at that time.

Overhead IS an important factor in determining price but it is not the most important, making a decent living is.

[Eric ELM]

My customers have told me that there are companies that are bidding lawns in the area I mow for as much as $15 to $25 cheaper per cut. They tell me they will stick with us since they know we do the work the way they want it done. Most people charge what they are worth. As a member here once said, "Would you take the cheapest bid for a heart transplant"?
Why would you want to work for less? If you worked at McDonalds, would you work there for $8 less than the other workers? I don't think so.

[geogunn]

if you intentionally undercut anyone to take their business you are a scrub and a lowballer.

and something for you to consider is YOUR competition.

he uses his father's crapsman, a ryan curved shaft trimmer and an electric blower. he also has no used truck payments 'cause he bums his father's old clunker and he lives and eats at home. he proudly proclaims that he'll cut anybodies yard on your end of town for 15 bucks! "hey man, I can cut five yard in an afternoon and that's 75 bucks"!

now...do you consider your competition a scrub and a lowballer?

just something to think about.

GEO

[turfguy33]

My overhead is low too, but you still need to remember that someday your equipment will wear out. You don't want to go into your profits to pay for it. That was my first mistake. I am a solo operator with occasional part-time help, and I realized that in order to make this business worth while you have to realize that theres alot of hidden expense. I figure in the truck payment, equipment payments, insurance, liscenses and professional dues. I have two separate accounts, one that is strictly for everyday business purchases, (gas, etc) and another for growing my business. I'm sure if you figure all this in, $8.00 cheaper won't cut it. If your hurting for business, this isn't the way to go.
That comes out to over $250.00 in a year...........if you did 20 accounts that cheap, it's well over $5000 a year...........ask yourself, are you willing to lose that much money...

[awm]

Patfo you do the home work as far as what you have to charge.Truth is if you add everything up an dont fool yourself.You will probably find you need to charge closer to market prices.There will always be those working for less,but soon as there mower falls apart there gone.
just a fact in this buisiness.One thing you need I believe
is capitol cushing.Y ou go under ifyou operate on the edge all the time.GOOD LUCK.

[thelawnguy]

"if you intentionally undercut anyone to take their business you are a scrub and a lowballer"

Wrong.

You are a businessman.

Any good businessman will undercut to get a lucrative account, then put the contract on the elevator once the customer knows what quality work can be had.

[1st impressions]

thelawnguy

I disagree. You are assuming the first guy was not doing

good work. If the person dumps his current co. for $ you can

bet he will dump you when you put his yard on the elevator.

If the client is unhappy, he will change co.anyway. There is

no need to drop $8 when $3 less or charging the same will

get the job. Be professional and a good salesman to get

the job instead of cutting the legs off the industry.

[joshua]

i'm in total agreemnet with most of the guys, but i feel that the customer is alos paying you for your knowledge about what you do. and how did you buy that equipment that you have right now??? the money didn't come from a tree, you had to save it up from work somewhere and would like that money returned to you in the form of profits but how do you plan to make any profit if you charge $8 less than ever one else. think about this i can cut 4 yards in a hour with a 2 man crew you cab only cut 1. i make $100 in sales you would make $17 because you charge $8 less than everyone else. correct me if i'm wrong. good luck.

[SDF250]

i made it really easy for myself and always charge $1 per minute for cutting grass any less than that and i would have to kick my own a$$. the overhead in this biz. is way out of line compared to what people think is fair price to cut there lawn not even $35 per hour is worth it,maybe for mulching but not when your rolling around someones yard on a $9000.00 machine. ANY WAY, IF SAY THE FIRST GUY CUTS THE LAWN FOR $25 AND IT TAKES HIM 25 MIN. AND HE IS USING A 60" MOWER THAT GOES 9 MPH HOW THE HELL DO YOU THINK YOU CAN CHARGE $17 AND MAKE ANY MONEY WHEN IT WILL TAKE YOU AT LEAST TWICE AS LONG AND JUST TO VENT SOME MORE . i would feel like the biggest loser on the face of the earth cruzin in the old family wagon with a mower hangin out the back


now if the cust. wants a new lawn guy becouse there not happy with there work why charge less, they will pay more or they .......kiss you a.. as you walk away.your not productive enough with a 36 anyway you HAVE TO buy bigger mowers unless the yard is that small or the yard is fenced in. and in the case it is fenced in the cust. has to pay for your UNPRODUCTIVE 36" MOWER

[geogunn]

Originally posted by thelawnguy
"if you intentionally undercut anyone to take their business you are a scrub and a lowballer"

Wrong.

You are a businessman.

Any good businessman will undercut to get a lucrative account, then put the contract on the elevator once the customer knows what quality work can be had.

thelawnguy--if I were in your area and I could follow behind you on your route and offer to undercut each of your customers in order to get their business, I find it hard to believe that you would come up to me at the end of the day after losing some/all of your customers and shake my hand and congratulate me on being a businessman. sorry...I just aint buying that story!

GEO

[thelawnguy]

I have no problem undercutting a guy with bloated overhead. If I can make money at my price then I go for it.

You may be making $10 profit on that $40 lawn but if I can make $20 profit on the same lawn for $35 you can kiss your account goodbye.

Now I understand why some of you guys at 40 yrs old+ still live in 2 room cold water flats eating mac and cheese every night .

[Ricky]

I was telling my wife some of the things that you guys said that qualified mowers to be a "scrub".

Know what she said to me?

"YOU'RE A " SCRUB"

[Patfo]

Being the one that started this thread I would like to say this: First of all thank you to everyone who responded. Being my first F/T year I know I have alot to learn and I will approach this year w/ abit more of a business mind. The UNPRODUCTIVE 36W/B is what I can afford and the accounts I have carried over from last year this machine fits well. Sure I have some yards where I would love to have a bigger machine but my approach is to upgrade my equipment as I can pay for it as I did for my UNPRODUCTIVE W/B last season. I will not go out and buy a 60" Lazer and go into debt until my workload warrants this equipment. This upgrade may happen in 1 month, 3 months, or not until next year but it WILL happen. I have raised all my prices $3-$5 from last year and have retained all my customers so my work is solid. Granted it takes me longer W/ my UNPRODUCTIVE W/B but I leave my yards looking good. The $8 amount was a hypothetical amount at worst my pricing is probably $5 dollars low in some instances due to just plain lack of knowledge which I will correct as I price new jobs this season. I come to this board to learn which I have and will continue to do for which I THANK YOU all! WE all have to start somewhere and this is my starting point. I cannot not start out w/ $20,000 of overhead but hard consistent work will pay off! THANK YOU ALL!

[Fantasy Lawns]

Running a business is much like life ...

When I first started ( child ) I was interested in what people charge ....how much they did a job for ...what the going rate was ...I needed to gain insight & learn ....I wanted to make $$ like those around me

As I grew & gain experience in both time & mistakes ( adult ) I learned I need to charge the $$ which is necessary for ME .....not what any one else gets or what the kid with a push mower charges or even the local with a 36" in the back of a truck ...that was ME when I started

So the point is don't under cut a bid ..don't care what the going rate is ....if you can't make a living at YOUR Rate ...then look else where for income

<b><font color="#008000">Price the job at what YOU NEED to get and make the $$ ....pay the bills ....make profit ...put a little a way or invest in better equip ...etc.
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Good Luck ;->