Pricing, Pricing, Pricing????

[topchoice]

Hello all! I am just finally starting my own business after almost 8 years of working in a local Park, Rec, and Forestry Department during the summer. I am a high school teacher by day and a new business owner by night, but I am having trouble with pricing. The area I am in has two drastic incomes...on one side I have clients who live in million dollar homes and have only 3/4 of an acre or less and then those who are your 'normal' income base who have anywhere from 1/4 to 1 acre of land. I can handle the 'normal' clients when it comes to pricing, but the more fortunate ones I am a little lost as to pricing. (I currently have to clients interested- just waiting for my proposal) I know there are other companies who are charging $65 or more per visit but they are major companies and I know of other individually owned companies who are charging anywhere from $35 to $55 dollars a visit. I want to be competitive but at the same time reasonable. Just want to hear some opinions from those more seasoned in their self-owned business. Thanks! :usflag:

[ED'S LAWNCARE]

price by the size, not the clients income.

[DuraCutter]

Hello all! I am just finally starting my own business after almost 8 years of working in a local Park, Rec, and Forestry Department during the summer. I am a high school teacher by day and a new business owner by night, but I am having trouble with pricing. The area I am in has two drastic incomes...on one side I have clients who live in million dollar homes and have only 3/4 of an acre or less and then those who are your 'normal' income base who have anywhere from 1/4 to 1 acre of land. I can handle the 'normal' clients when it comes to pricing, but the more fortunate ones I am a little lost as to pricing. (I currently have to clients interested- just waiting for my proposal) I know there are other companies who are charging $65 or more per visit but they are major companies and I know of other individually owned companies who are charging anywhere from $35 to $55 dollars a visit. I want to be competitive but at the same time reasonable. Just want to hear some opinions from those more seasoned in their self-owned business. Thanks! :usflag:

Price according to how much you want to make. Then choose the clients that will give you that income. Most people on this site still don't believe that they are in charge of how much they make. You and only you can choose how much you make. You may have to lose some clients and you may have to do commercial. It just depends on if you want a lot of money or if you don't want a lot of money.

[PMLAWN]

Does the school you teach at charge different rates by income level??
Why do you feel the need to cheat people according to income.

Figure out YOUR rate per hour for the work you produce, figure out how long a job will take, plug in your rate = cost to customer.

[GarPA]

I cant help you much with pricing in your particular area but here are a couple items to keep in mind:

- assuming you are going to invest is some kind of high producitivity commercial mower, it is less important whether a lawn is 1/4 acre or 1/2 acre or even larger because a ztr commercial mower is so fast . It is far more important when determining your fee for a given property , how long it takes to detail the proprety...meaning how long to string trim all beds, sidewalks, or other areas that cannot be mowed and then how long to blow off/cleanup. Remember that you will be in the business of selling manhours and the devil is always in the details, not simply what the sq feet of mowing is. I had a guy give me this tip years ago and I still use this approach for any new prospect. In some cases if I am unsure, I actually walk the property as if I were servicing it. Rarely do I underbid using this approach.

- determine what your absolute minimum service call fee will be. Some guys use 25, 35, 40 as a minimum. Mine is higher than that but thats just my approach. You have to be aware of the going rates for mowing in your area but you also must set your fees where you need them to be to sustain your business. Remember, if you set the fee too low on a given property just to get the account, it will be almost impossible in later years to get that fee up to where you know it needs to be. And also remember not to let your fee structure be totally determined by guys/gals who go out of business....and there are many of them in our industry...they come, they go. You don't want to be one of the many newbie casualties in this business.

[LB1234]

price by the size, not the clients income.


Be careful...not all 1/4 acre or 0.5 acre lots are the same. One could take longer due to different variables.

And agreed...don't price according to someones income level.

[Tn Lawn Man]

Topchoice

PM and let me know the specific areas that you are targeting and I can probably give you good advice for the Nashville area. I have been working here for several years.

[lawnman_scott]

Topchoice, listen to tn lawn man, there is nothing like someone local to know what your area will handel as far as price. But another thing to look at other than size is level of service. You have to be able to read people. Some want the grass short and dont want to do it, others want their property to look nice.

[topchoice]

Topchoice

PM and let me know the specific areas that you are targeting and I can probably give you good advice for the Nashville area. I have been working here for several years.
TN Lawn Man, what is your e-mail so I can talk with you, sorry I didn't know what PM means. Thanks!

[Tn Lawn Man]

PM means to private message me. To do that all you have to do is click on my name and a drop down list of options appears.

Click on the one that says "send Tn Lawn Man a private message"

If it is not enabled yet you will have to have the forum moderator turn it on.

[topchoice]

PM means to private message me. To do that all you have to do is click on my name and a drop down list of options appears.

Click on the one that says "send Tn Lawn Man a private message"

If it is not enabled yet you will have to have the forum moderator turn it on.
Alright, another stupid question, who is the forum moderator? Sorry about this, I'm new!

[Beau Rivage]

^1MajorTom--(Jodi)

[Tn Lawn Man]

Alright, another stupid question, who is the forum moderator? Sorry about this, I'm new!

Don't apologize. We were all new once. Go to the main page and click the "contact us" button. Then email the moderator to turn on your PM privileges.

[LemkeLawns]

You guys are going to think im a nut or an idiot but roll with this idea.
where I live there is a truss company, they buid trusses for chicken houses, comercial buildings and shops. They are a very profitable business, except for about fifteen years ago. At that time they were making the largest volume of trusses they ever have, but they were about to go bankrupt. Why you ask? They were building a lot of low profit trusses for chicken houses. They were running their equiptment for a 2-3% profit. Then somthing clicked. Get out out of that end of the market. Sell too the end that paid more- commercial buidings. They worked less, not as hard and made more money.

This part is when people know im an idiot and stop lisening, this is also the part that I know they can't relate situations to their industry. Keep reading.

I started my business when i was 16. i had been mowing some of the lawns since i was eight, but then took over. I took on some new customers and thigs were going great, BAM it hit my like a frieght train. I got sucked in the cycle of doing lower income lawns for basically nothing(chicken house truss). Then about the age of 20 I was told the story about this truss company and I finally realized that there was somthing better(higher income lawns). I will NEVER advertise on that side of the market again. If they come to me and ask for a quote thats great ill give them a price that would help them and not hurt them. But as for me I will stay in the higher class and give an adequate price for their service. Yes it will be higher than if the same size yard was in a different neighbor hood. I sell an IMAGE not short grass. The upper class will expect a great job, not a hack and whack. It not the size of the yard that matters. It is the service and image that the customer wants that dictates the price. Its just so happens that the upper class gets charged a higher price.

[Team-Green L&L]

Lemke, you are on your way to success. Just keep your mind-frame exactly how it is! Proctor & Gamble pays better than the high-end residentials, so commercial should be the next goal...correct?

[topsites]

First, everybody pays the same price: McDonald's charges rich and poor the same money so long it's for the same food.

So then, the price issue...
I would've never believed the higher price theory had I not experienced it myself, for that simple fact I, too, got caught up in the mindset of feeling like I had to lower my price to get the customers I needed.

But you know what?
Last year, with a high of 55 and a low of 47 customers, I worked my tail to the bone and deposited 30,960 for the year.
This year, with a high of 46 and a low of 41 customers, I worked noticeably less (Not only could I feel it, but so could my machines), and deposited $37,000...

Not only was the deposit difference astounding, but I also felt it in the maintenance department: I spent less time fixing AND less parts expenses.

It is amazing, a mere $5 difference here and there, it didn't make sense but I guess in the end it's the mindset and not the actual increase, dunno...

What really did it for me, was one day I ran into someone who I thought I better give them a good price... And I gave them like 66% OFF the regular price (so try 20 dollars for a 60 dollar job), just because I needed the work so bad that I didn't care (or so I thought).
Just as SOON as the price came out of my mouth, without hesitation the customer says right back to me: Ohhhhh but CAN'T you do it for LESS ???!!??!
Well, I came right back too (as my mind finally clicked), and said:
Noooo!!! Thank you!
(and turned around, and walked away).

And from that point on, I thought to myself, you know, if they can STILL complain about the price when I give them the absolute lowest I can do, then from here on out I am going to give them the REASON to complain.
And I did, so nowadays when someone complains that the price is too high, at least I understand completely where they're coming from.

Much like the other guys who figured it out, I will also never quote a price according to what I think they can pay:
Way I see things, either you can afford my services, or you can not.

[LB1234]

Lemke, nice post. I don't think its stupid at all.


We started 6 years ago and when we started we took anything and everything to attempt to make ends meet. As the years went on we filtered out who we didn't want and we started targeting the customers we desired, and more importantly, that desired us.

[LemkeLawns]

I have 2 books that I recomend everyone to read.

The first being THE POWER OF FOCUS by Jack Canfield, Mark Victor Hansen, and Les Hewitt.

The second being SELLING THE INVISIBLE by Harry Beckwith.

topsites I dont believe a person can compare lawn maintenance to "Mcdonalds", but you can compare it to the food industry.
Yes, Mcdonalds charges the same price to every costomer regardless their income but lets take it a step further. What would a meal cost a Mcdonalds? $5. Now go across the street to the steak house. Considerably higher cost. Your thinking, duh its different food, maybe better food. EXACTLY. Why charge the same amount if your give a better service?

LIST YOUR TOP FIVE CUSTOMERS TO YOURSELF

You did it either by price or by how nice their property is.

I dont want anyone to think that I am taking advantage of the upper class but rather Im helping them.

No your not Lemke.

Yes, they want to spend the money (if they didnt they wouldnt) to make their property great. Its just a matter of finding these people. I can spot them from a mile away.

[LemkeLawns]

topsites now that a ragged on you a bid it is time to give you credit. The rest of your post was genious, nicely worded.

I think the hardest think for me to do is tell a potential customer "no", especially when I need the work.

If you read SELLING THE INVISIBLE youll see why people complain about prices. It surprised me