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wglawncare
02-23-2006, 05:15 PM
I just hand raked a gentleman's lawn. I didnt quote him an exact price, he just said go ahead and do it. Last year I charged him $80, @ $15/hour for his approx. 22000 sq foot yard. This year I have a better understanding of the prices in my area and am charging $22/hour. If I use this rate I get for the 11 hours I was there( hand raking his lawn) I get $242. That is a 300% increase. Should I try to shave off some not to piss him off to start the year off. ( He tells me he will be getting me about 5 jobs in his area, neighbors) Or should I stick to what the price came out to be? I really need some help on this one!!:dizzy:

ed2hess
02-23-2006, 05:33 PM
Not good to surprise a customer with that kind of increase. You should have discussed this before you did the job.

cush
02-23-2006, 05:34 PM
I think you screwed yourself on this one. first it looks like it only took 5.5 hours last year and second you did'nt tell him you increased your hourly rate. You better eat it this time if he is a good customer. but be sure to let him know your new prices and that you gave hime a deal

DFW Area Landscaper
02-23-2006, 06:04 PM
$22 per man-hour is too low for this kind of sporadic work. For this kind of labor, we are at $44 per man-hour but we discount that to $36 per man-hour if the customer doesn't require that we drive out for a free estimate first.

98% elect to go with the discounted labor rate. If they say they want a free estimate first, we never get around to it. It always seems to "accidentally" slip through the cracks every time.

I agree that if you increase your price 300%, your customer will probably be unhappy.

Later,
DFW Area Landscaper

Jpocket
02-23-2006, 06:34 PM
1st off WHY ARE YOU HAND RAKING A YARD TO BEGIN WITH. I haven't raked a lawn since I was a little kid.
What is the purpose?

Secondly $240 isn't that bad b/c cause yo are not running a machine, the onlything you are putting wear on is your body, I don't think anybody would be so ANAL as to count a 1 $15 Rake into the hourly rate.

Honestly im alittle confused.......Maybe I missed the point?

Someone clarify the

wglawncare
02-23-2006, 08:57 PM
The guy asked SPECIFICALLY for the lawn to be handraked. He feels that it does a better job in getting rid of the thatch, leaves, ect. There is a willow tree on the lakeside of the property that has millions of little tiny leaves, and my mower cant pick up every single one. The guy has a good chunck of change and owns a $500,000 property on the lake. This is his summer home.

Precision
02-23-2006, 09:03 PM
The guy asked SPECIFICALLY for the lawn to be handraked. He feels that it does a better job in getting rid of the thatch, leaves, ect. There is a willow tree on the lakeside of the property that has millions of little tiny leaves, and my mower cant pick up every single one. The guy has a good chunck of change and owns a $500,000 property on the lake. This is his summer home.


When people specify the type of equipment I am allowed to use. My estimate doubles. That way either they call someone else or I get PAID

Using a rake to do 22000sq ft. Not bloody likely.

palawnman
02-23-2006, 09:18 PM
I have to admit I hate to rake, I will do anything possible to get out of it. The way I look at it, there has to be a better way. Anyways, as far as the price, you definitely did that to yourself, nothing wrong with increasing your rate, but you have to say that upfront. Because more often than not, people expect at least something close to the bill from the previous year. I think that you are better off eating the big price difference, I would still try to charge more than last year but not as much as you had planned. Because you can explain it being a little more, if there was more work, but not that much.

Ron

wglawncare
02-23-2006, 09:35 PM
He knew my rates were being increased to $22/hour. But I did not give him an exact estimate on the total price. I really do feel bad on the price it came out to be. But I did hand rake every square inch of his lawn. I atleast can say that. I think I will just eat some of it and go on. Thats the consensus I am getting from you guys.

o-so-n-so
02-23-2006, 09:37 PM
I would tell him that "his" price is different from everyone else's because he is getting you business. He is a preferred customer and your deducting a referral bonus from his total cost. Tell him that if the people he is referring to you will refer 5 customers they to will get a discount and so on. Make sense......Know your discount before hand and show it on your invoice.

Total cost $242.00
Discount 5 x $25.00= $125.00

His cost $117.00 and charge your normal price to his referrals and offer a $25.00 referral bonus.

lawn masters 2006
02-23-2006, 09:45 PM
not to be a**....but if he owns a 500,00 $ home on a lake....why would u charge 15 per hr ?:hammerhead:

wglawncare
02-23-2006, 09:57 PM
I am $16 years old and was just starting out in the business. That is what I felt I was worth at the time. Now I find out I should be higher and am now charging $22/hour. That is my reasoning.

Precision
02-24-2006, 07:40 AM
I am $16 years old and was just starting out in the business. That is what I felt I was worth at the time. Now I find out I should be higher and am now charging $22/hour. That is my reasoning.

not to be a d*** either, but in about 4-5 years with equivalent raises in your rates, you will be close to what you need to be charging to stay in business.

I know you are 16, I know you probably live at home, I know for you $22 per hour seems like great money. The only problem is, everyone else doing that work has expenses and charges at least double that. Why should you be less profitable than you can? Why should you lose almost all your clients when you do incur some expenses, like an $8000 ZTR, have to rent an apartment / buy a house, need to rent a commercial site to store your growing collection of equipment, need to hire in help and pay their wages and worker's comp.

All I am suggesting, is think ahead. This is not a business based on making some cash and hoping for the best. It is about figuring expenses (including self worth) and going from their.

My overhead and equipment operation costs are more than $22/hour. If I charge $45 per hour when I am doing the labor, I lose money. When helpers are doing the labor, I make about $1 per hour.

Hopefully this helps you to understand the bigger issue. As far as raking that guys lawn, do it for free. It really isn't that much money either way. who cares, the thing is learn from your mistake. That is what is valuable.

basic rule of thumb. as a solo whatever you want to make per hour for your salary. You need to triple that as your charge rate. Don't tell the client what you charge hourly. Just quote them job prices. Mr. Jones, to trim those hedges will be $400. You figured 6 hours at $60 (including drive and disposal time) with a built in fudge factor of $40. It actually takes you 4 hours. Great. It actually takes you 8, learn to bid better, work faster next time. And I do mean man hours.

FrankenScagMachines
02-24-2006, 09:41 AM
If he has at least two homes and so much money and you DID in fact tell him of the new hourly rate, why the heck would you feel bad for charging him for the job? If he was there I'm sure he noticed you were there for 11 hours, and you DID tell him it was $22 / hr, so he can do the math. Also FWIW, NEVER EVER give a discount before receiving the referral job...

If theres one thing you will learn in business its NEVER short yourself what you are worth... thats just stupid and ignorant. What if you discounted everybody just because you felt bad the bill was more than you would pay for the job? Of course it seems like alot to you, to this guy, to have a guy slave doing hard manual labor for 11 hrs where a machine could do it in a fraction of that time, well I don't understand exactly why you should discount it any since you told him the new hourly rate.....

But hey, do whatever you want....

EDEN77
02-24-2006, 10:08 AM
The business angle has been covered well already. I have another take on this thread. Forget about raking lawns by hand. Sure, your mower can't vacuum as well as you can rake. But, in this business, a powerful backpack blower is essential, along with at least one mower and a line trimmer (weedwacker). If you use a backpack blower on this job, you will get done faster and the job will be done leaps and bounds better. Because you get done faster, you make less for working a shorter time. So, you are more efficient and your work is more valuable, so you then raise your rates and make more money. Also, by doing more work in less time, you get more work and make more money still. Use a backpack blower (and eventually a push blower) to move all debris into a pile. Use the rake to pull the leaves and debris onto the tarp that's next to the pile. In 2006 America, the leaf rake is only good for an extremely limited role.

Remsen1
02-24-2006, 10:39 AM
I heard a saying once.... "If you don't feel a little bad about the price, then you're not charging enough."

wglawncare
02-24-2006, 01:12 PM
Well there are a lot of differnt opinions out there and all of you suggestions really did help. Most of the items that Precision listed I completely disagree with. The going rate in my area for such work is $25/hour. I have to compete with this. I cannot charge $45/hour when the goin is $25. I am not sure how these other compnaies are making it with all of their overhead and expenses. But all I know is this is a good price for me. I am making a good amount. I have 3 guys working with me. They are all sub-contractors. 3 guys from school. I pay them $10 each. I stay on them to keep the time and quality always there. I do live at home, but I do have the cost of insurance, mowers, truck, car, and gas. My insurance was over $5000 because of my age, lack of driving experience, and driving a 12 foot trailer. All this is my expense. I have over $10,000 in equipment cost. I would not call this little overhead. I store all of this in a mini-warehouse year-round.

On the subject of FrankenScag. Thanks for your input. The way you explained it I can see now that I should leave the price where it came out to be. The only problem that I saw before that I charged $85 last year, and now $242 this year. Yes he knew of my rate, but was not present at the time of my work. So he did not see how hard I did work. If I did this job with my machine the amount would have been about half. But he specifically asked for this manual had raking. And I guess he will just have to pay for it. Thanks!!

EDEN77- I could not use the blower becuase of his explicit instructions. And in my opinion if would not have done have as a good of job as what I did with the raking. I got almost all of the thatch out of the lawn from last year, and all of the tiny willow tree leaves deep down underneath.

CAG
02-24-2006, 08:20 PM
I agree that u will have a little problem with getting him to pay for that kind of increase even though that is one hell of a good deal u r giving him. Just please dont let him beat u up on the price with the fact he says he will get you more work. At your age those people are always going to try to pull that with you to save a buck. A good thing to say when he asks about the bill is to say something along the lines of i gave u a good deal last year, now i gotta make a couple bucks, come on u know i dont ever charge much.. But very important u say it in a nice laughing voice like u r BS ING with a friend. Keep the conversation friendly and he will probably pay it.. good luck

samk
02-24-2006, 08:38 PM
So if you had a JRCO rake on your mower and a Billy Goat or Little Wonder blower and it only took you 2 to 3 hrs to do this you would only charge him 40to 50 bucks?

ICE
02-24-2006, 08:51 PM
I would say to just go ahead and charge him. If he complains, then just tell him that you were charging him what you quoted him. And if he still complains about the price increase, I would simply say that I miscalculated the number from before. I would also inform him that I would give him credit for of X dollars for any of his neighbors that he gets for you. One thing in this business that you want to keep to an exteme minimum is going from house to house. And if you have a bunch of houses in one neighborhood, well then, you are well ahead of the game.

Tim:cool2:

wglawncare
02-24-2006, 11:18 PM
If I used the JRCO and the other equipment you described I would be charging a different rate for that service. And the total would not come out to be 40-50, when last years low estimate was $80.

samk
02-25-2006, 12:20 AM
If I used the JRCO and the other equipment you described I would be charging a different rate for that service. And the total would not come out to be 40-50, when last years low estimate was $80.
Why? 22.00 is your hourly rate that comes to 40 to 60 bucks. This is why you dont charge by the hour. You charge by the job. does not matter if it takes you 3 hrs with equipment or 11 hrs by hand if its a 400 dollar job than thats what it is. I understand its hard to get equipment in the begining but a walk behind blower and a JRCO rake you could have done 3 to 4 cleanups instead of one taking 11 hrs. with those two pieces it would make the lawn look alot nicer than hand raking. 1000.00 Dollar investment would save you tons of time and make you alot more money. Just curious did you have your helpers that you pay 10.00 an hour with you or did you do it by yourself.

wglawncare
02-25-2006, 12:44 PM
I had the guys helping me. You make a good point there. Another reason I did not use the equipment on the lawn this time of year was stage the grass was in. I didnt want to be running large equipment over the lawn and making tire makes all over the lawn. I wasnt sure if it would hurt the lawn so I went the manual way, which is what the homeowner wanted me to do. So I wasnt about to argue with him.

WildLake
02-25-2006, 02:55 PM
When I first started, I made the same mistakes that you have made. I realized, or was told, that my prices were waaaay to low and it was very awkward rising them double, triple or even more, but I did it and the customers understood. You have to know what your worth and charge accordingly. We know what a pita hand raking is and so does your customer. Charge him the $22/hr

Precision
02-25-2006, 07:15 PM
Well there are a lot of differnt opinions out there and all of you suggestions really did help. Most of the items that Precision listed I completely disagree with. The going rate in my area for such work is $25/hour. I have to compete with this.
How do you know. Most people don't charge by the hour. Well most businessmen don't anyway. The biggest point is that how the job is done (tools used) and how long it takes are none of the concern of the client. He wants the thatch removed. If you can twitch your nose and make it disappear in 2 seconds or spend 11 man hours raking, the same job is completed. If he is willing to pay $200 for one he better be willing to pay $200 for the other.


I am not sure how these other compnaies are making it with all of their overhead and expenses.

They are charging way more than $25 per hour. That is how.

Not trying to pick a fight, but why on earth would you charge $22 if the going rate is $25????

They are all sub-contractors. 3 guys from school. I pay them $10 each.

You may want to revise that theory before the IRS comes down and explains payroll tax evasion and the true definition of sub-contractors. Did you 1099 them? Did they make their own schedule and provide their own tools? No, then they are not sub-contractors.

Perhaps you don't like what I have to say. Perhaps you even don't like me. But the facts are immutable. At $22 per hour you are slowly going broke working solo. At $22 per hour paying 3 guys $10 per hour, you are going broke even faster not to mention breaking more than a few laws.

wglawncare
02-25-2006, 07:43 PM
I talked to neighbors of customers that use my competion for their needs. For their lakefront seaweed removal, leaf cleanup, ect. they charge $25/hour. Their lawns are there own problem. They send out a crew of 5 Mexicans and I can go to the lawn next to them and be in and out of there before they are. The guys that are the subs have all of their own eqipment, I sent them a 10-99 last year, and each day they hand me what they have done for the day and bill me at the end of the week. I have done my homework on my definition. I have nothing against you just maybe how I interpreted some of the things you previously said. On this last job I made aprrox 168. No gas for euip.. only the gas for my own vehicle over there, they used their own cars. So over all I made $160. Then after taxes( Sales, state, ect.) Itll be less, I know that.
I gotta go. but I would still like to get some more of yours and other peoples input on this subject later.

J&R Landscaping
02-25-2006, 07:52 PM
That don't make sense...Charging $22.00 an hour but paying each of your people $10??? Do you mean $10 total for the job or 10 an hour? I'm just a little confused....................................

wglawncare
02-25-2006, 10:50 PM
For each hour I work/ the subs work, I charge $22/hour. When the subs get paid they get paid $10/ hour they have worked. This is the most simple way I can put it. I am making $12 per hour when they are working. I cant see how this is losing money.

samk
02-26-2006, 01:24 AM
simple? ARE YOU PAYING THEM 5.00 AN HR EACH OR 10.00 AN HR EACH

captken
02-26-2006, 02:35 AM
$22 per man-hour is too low for this kind of sporadic work. For this kind of labor, we are at $44 per man-hour but we discount that to $36 per man-hour if the customer doesn't require that we drive out for a free estimate first.

98% elect to go with the discounted labor rate. If they say they want a free estimate first, we never get around to it. It always seems to "accidentally" slip through the cracks every time.

I agree that if you increase your price 300%, your customer will probably be unhappy.

Later,
DFW Area Landscaper

Is sleazy...trust me.

wglawncare
02-26-2006, 01:02 PM
"When the subs get paid they get paid $10/ hour they have worked:"
$10/HOUR- TEN DOLLARS PER HOUR
I CHARGE 22 PER HOUR
I MAKE 12 PER HOUR WHEN THEY ARE WORKING

samk
02-26-2006, 02:21 PM
then you suck at math 2 workers at 10.00 an hr is 20.00 you make 22.00 an hr thats 2.00 an hr net. You are not listening to anyone on the board you have two threads going asking what to charge and a bunch of people have told you that your low inlcluding someone from your own area he said charge 40 something. if your happy what you are making then make it dont ask us and tell us we are way off base. granted you may not be able to make what we make in the northeast but 22.00 hr with people working with you is way low. you would be better off working at mcdonalds or walmart because you would make 9.00 hr and have no overhead. If you have someone in your area making 85.00 an hr riding a Z then your area can afford more than 22.00 hr. You keep saying if you were using equipment you could charge more. why you get paid more for making work easy. work is work weather you are digging a trench by hand or with a dingo or something. sure it may take you longer by hand but why would you charge less for working harder. Sorry for the rant but geeessshhhh

Precision
02-26-2006, 06:28 PM
The lead the horse to water principle is in effect here.

we try but we can't make them drink.

You charge $22 per hour per person. ok I get that.
You pay $10 per hour per employee. Ok I get that.
And assuming you pay yourself $10 per hour also.
Now that means you get $12 per person Profit. NO, sorry it doesn't work that way.

I forget what you said you pay for your GL insurance annually. I think it was $5000. now lets say your company works 2000 man hours a year. You and all your helpers combined. That means it cost you $2.5 per man hour for insurance.
So now you are at $9.5 per man hour profit.

Now lets say you spend $5000 per year in gas.
$7 per man hour profit

Now lets say your blades, oil changes, chainsaw chains, mix oil, new tires and all the other little things you have to buy in a year cost $5000.
now you are at $4.5 per man hour profit

Now lets say your truck insurance costs $1500
Now you are at $3.75 per man hour profit

now lets say depreciation on your equipment is $2500
now you are at $2.50 per man hour profit

Now lets say depreciation on your trailer, and truck is $2500
now you are at $1.25 per man hour

Now lets say your accountant charges you $1000 per year to keep the 1099's together and keeps all the other IRS items in line.
now you are at $.75 per hour.


there are a lot of other things I have not included. And this leaves you with $.75 per hour profit.
or assuming you actually had 2000 man hours of work, a whopping profit of $1500 for the year. And seeing as you haven't paid any payroll taxes and you are not following sub-contracting rules, then you are in deep AND not making money. A very bad place to be.

If you pay yourself the entire $22 per hour, then these numbers are way off and you have no profit. PERIOD you are just working the float on the depreciation until your equipment dies then so does the business.

Being head strong doesn't help in this business.
Learning about economics and accounting does.
If you want to wake up one morning and be out of business and not know why, keep doing it your way.
If you want to be in business for more than a year or two and have something to show for the abuse your body is gonna take, I suggest you wise up.

Then again, maybe you are just a troll getting your jollies by posting such things.

wglawncare
02-26-2006, 11:27 PM
I am not posting thing I pick out the thin air. These are the actual numbers I am using. The one guy that said he is charging $40/hour in "my area" hasnt spoke his exact location. The town I work in only has 5,000 people. And I haven't expanded out of this area. I do follow all of the sub-contractor rules, as I stated before. I would like to know which ones I am not followin, so I do not get in any trouble. If you could point them out to me. And I am not at all here trying to be cocky or a know-it-all. I thank you that you understand that I am make $12 an hour to start off with, not $2/hour as samk has stated. I do not know how else to explain it to him that will make him understand, maybe you could enlighten him. I see what you mean by taking out all of those expenses. But the $22/hour was not what I charge for mowing. Mowing is on a totally sepate part of the business. The $22/hour was on the seaweed cleanup work I do, or any other general jobs/ cleanups. So I only have about $500 with the eqipment built up in that area of the business. The only gas I spend is in my mowers and going job to job, which is less than you expected for me to spend since all of my jobs are within 2 miles of my equipment location. I would love to charge the $40/hour but Ill tell you right now, if I did I would have 0 jobs. Its that simple. When I have competition that would be $15/hour under me. Simple no brainer to the customer, $40 or $25? I think they would go with the $25. But that would just be my personal opinion. I didnt mean to get off on the wrong foot with anyone on here but I just got a little frustrated when you said I can not make it in the current situation I am in. I cannot see going any higher than I am now and keeping my current client base. Thanks, and I hope we can start over here and get on the right foot.

samk
02-27-2006, 12:16 AM
/ . The I do not know how else to explain it to him that will make him understand, maybe you could enlighten him. . I am enlightened I reread your last post I must have miss read it the first time. sorry. I thought your cleanup took a full 11hrs not 11 man hrs. again sorry

wglawncare
02-27-2006, 12:25 AM
No problem, I didnt mean to get offensive in any way. Thanks for trying to help me. If you have any other opinions I would like to hear them.

Splicer
02-27-2006, 12:32 AM
Hello...1st time poster here. Didn't read the whole thread just the first few posts.

My suggestion is to just eat it at this guys house. If he is getting you 5 more customers @ $22/hr, he deserves a price break this whole year (as long as the prospects actually pan out that is) and just charge him 1/2 of the amount you feel bad about the total coming too. Now next year is a different matter. You may still give him a break to retain as a customer but make sure he is aware the break will probably not be as generous the next time around. There,,,done...

Now I want to know what you are doing in Wisconsin raking a 22,000 sq ft yard in February...

wglawncare
02-27-2006, 12:37 AM
I would like to type that out again, but I am not fortuante to have that time. The customer gave me specific instructions to so that when the meeting between him and his neighbors cam around his lawn would look great. At this meeting is where I should be picking up a few more accounts in his area. He knew my prices of the 22/hour and now the more I think about it I might give him a little break, but not as much as I was before i got all of these repsonses.

Precision
02-27-2006, 07:30 AM
I didnt mean to get off on the wrong foot with anyone on here but I just got a little frustrated when you said I can not make it in the current situation I am in. I cannot see going any higher than I am now and keeping my current client base.


If I were you, I would branch out to better paying areas.
I would concentrate on getting my new accts to pay better and as you do, start culling out the cheap people.
I would also tell you that most people make the better rate on the things other than mowing.

For any clean up type work, I get between $75 and $150 per man hour.
Mowing I usually get between $45 and $65. The lower end is because I underestimated time or my earlier clients or both.

as far as sub-contracting, go to IRS.gov and they will spell it out for you.

LwnmwrMan22
02-27-2006, 07:41 AM
You say you don't charge $22 / hour when mowing, just doing "hand labor" chores.

When you're doing those hand labor chores, the mowers are sitting still, correct? You still either need to pay for these, OR be making money to put in the bank so you can pay for a new mower in 3 years.

We're not jumping on you. ALL of us were in your position at one time. When I first started out, 30 miles north of St. Paul, I used to do anything for everyone, for $10 / hour. That was 17 years ago.

Since then I've realized to expand out of my town (about 275) and I run up and down Interstate 35, 40 miles either direction, realizing that I can get other accounts, sit on my butt, and GROSS between $75 and $100 / hour. I point out GROSS, because I have many expenses that most would consider luxury, but it's how I choose to run my business. I could net around $60 / hour, but it's more like $35 - 40. This is working solo.

Just realize ALL of your expenses, and then double them, since you're still living at home. Once you double them, then add another 50%. That'll start to get you in the ballpark of what it's going to take to live cheaply once you get out of your parents place. This will give you a goal of where you need to go in your company in order to survive, if that's what you want to do.

Just remember, alot of the guys on this board that have been around the block a time or two, we're kinda like a father. We jump on people because we've been there, and being men, not mothers, or the nurturing type, are usually a little overly harsh.

wglawncare
02-27-2006, 05:15 PM
Its good to hear that I am not the only one in this place at one point or another. When everyone was commenting, it seemed like I was the only one to experience this situation. Yes I too also at one point charged $10/hour. And with no overhead that was awesome for starting pay. I will now take a deeper look into my expenses and see really how much I am going to be making. If my numbers aren't too good I will have to look at either raising them for this year, or doing more of the work myself and less from the subs.