PAINFUL LESSON PART "2"

[Nilsson Associates]

Continued discussion ... got anything to say?<br>what do think about my last post in Painful Lesson? How do you solve lowballing, price problems, no standards? Can it be solved? <br>What do you think about mega mergers of the &quot;small guys&quot;? Is it possible for the small companies to form a merger of independents, create and enforce standards in the industry?<br>Same as what other idustries have done? <p>Phil Nilsson<p>Phil Nilsson

[Charles]

I think we have a unique opportunity with the internet and this forum Phil. To set a standard of pricing and quality of service for everyone to shoot for. The problem is getting as many lawn service companies to find this site and use it as a reference. We need to make a reference post. Pricing, ethics, quality of work are a few things that can be covered. A post like the rate book mechanics use. A posts on ethics like realtors use.

[thelawnguy]

See my post under &quot;painful lesson&quot; 8:10 am 3/9/00<p>Bill

[JasonPC]

We definitely need to set a standard. Hopefully more and more landscapers will find this site and see what a standard price is and a standard way to price out a job is. My problem is not the little companies, it's the big ones! There's a huge landscaping company in my town, also owned by a husband and wife team, they do **** work and charge only $52.50 an hour for two guys. We're smaller and charge $70 for two guys. This guy is constantly undercutting us. We clearly do MUCH better work and take our time to make things look great. He's got his guys out there hacking things up.<p>As for Phil's suggestion to merge all the &quot;little&quot; companies: that's just bullshit. Our business might be small, but our sales have been doubling every year. Give us &quot;small companies&quot; the chance to come up. Maybe some of us can do it on our own.<p>-Nicole

[crew]

I think Nicole missed the point.If you are tired of being undercut,all of us &quot;little guys&quot; need to set some standards on price and quality.Most people who pay me want good work and know what that is.The ones who make decisions based solely on a price thats lower than mine will probably get what they pay for.All the other people i work for dont object to. paying a fair price for good work.All Phil and others are saying is lets help each other figure out what a fair price for good work is.I'm not sure about the market you are in but mine has lots of room for lots of people to make a decent living but there is also good competition to keep us honest.That in my opinion is the value of competition.If that battle for the customer is between you and me(assuming you do quality work above poverty level pay) may the best man win.If the battle is between me and some schmuk with crappy equipment,cut rate prices,whos not paying taxes or insurance and may or may not be around next year,its not fair.Hes not operating up to the STANDARDS you and i operate under.Whats great about this forum is the spirit of cooperation that exists here.That is what Phil and others are calling for and i think its a great idea.Cooperation and competition are not mutually exclusive!!

[Stonehenge]

It would be great if everyone could get together and all decide to charge the same prices for services. That way, everyone would be able to make a killing doing what they want. Problem is, it's illegal. It's price fixing. Do some research on the not-so-distant history of gas stations and you'll find out quite a bit. So, if you want jail time, price fixing is certainly a way to go.<p>While I don't offer turf mgt/lawn maint services, I understand your situation. In my part of Wisconsin, many people see landscapers (which is what I do) as guys with a pickup truck, a shovel, and too much time on their hands. This is likely the same in your industry. The barriers to entry (for all except the very biggest contracts) are little if not non-existent, so any guy with a pickup and a mower can be a competitor, whether legal or not.<p>In reading many of the posts in many discussions here, I continue to read that the customers don't understand the value of the service you provide, and opt for a lowballer. Whose fault is that? Yours. And only you can fix it. <p>Your answer is in your complaint. They don't understand. You need to teach them. You need to differentiate yourselves from the guy with p/u and mower (let's call him Moe). What are the things you do for your customers that Moe can't offer? If it rains, can you catch up while Moe can't? Do you have a reliability record you can tout to customers (Put together a 30-second survey for customers to fill out at year's end to measure satisfaction. The next year, shout your satisfaction rating from the rooftops)? Do you have knowledge that Moe doesn't? Classes, training? Do you offer services Moe can't? Like fertilizing, pesticide apps (and the licenses that go with it)? Do your employees have uniforms? Do they look professional? Well marked trucks? Are you insured? If you don't tell them, how will they know? <p>They need to be taught that Moe's service and yours are like apples and oranges - like completely different services. Moe is who you call when you don't have time to mow. You are the guy/gal to call when you want turf management.<p>For my business, when I get a call from someone requesting a bid, before I meet with them I mail them a little information packet. In it I include a letter about the history of the company, and why it's important to hire my company over others (the reasons listed above, plus a few regarding membership in trade orgs). I include a copy of our insurance, an article the newspaper ran about my company a couple years ago (let me know if you want ideas about how to get the paper to do an article about you - I've even had a TV crew on a jobsite), and a list of 20 references with thumbnail photos. I've found that this does all the educating I need. Now my contracts are different than yours, and that might be more info than you'd need to send. But if I'm a potential customer, and your price is $100 more than Moe's, and as far as I can see, you and Moe offer the same service and benefits, I'd be stupid NOT to choose Moe.

[crew]

I think Nicole missed the point.If you are tired of being undercut,all of us &quot;little guys&quot; need to set some standards on price and quality.Most people who pay me want good work and know what that is.The ones who make decisions based solely on a price thats lower than mine will probably get what they pay for.All the other people i work for dont object to. paying a fair price for good work.All Phil and others are saying is lets help each other figure out what a fair price for good work is.I'm not sure about the market you are in but mine has lots of room for lots of people to make a decent living but there is also good competition to keep us honest.That in my opinion is the value of competition.If that battle for the customer is between you and me(assuming you do quality work above poverty level pay) may the best man win.If the battle is between me and some schmuk with crappy equipment,cut rate prices,whos not paying taxes or insurance and may or may not be around next year,its not fair.Hes not operating up to the STANDARDS you and i operate under.Whats great about this forum is the spirit of cooperation that exists here.That is what Phil and others are calling for and i think its a great idea.Cooperation and competition are not mutually exclusive!!<br>

[scottlawns]

like i said before..im kinda new to all this lawncare suff....but to set a price is a great idea...but i think the price is going to be alot differnt in every state... i read these guys mowing in florida for 12bucks a yard...i wont let the gate down for that,in Minnesota the cost of living is much higher.but i sure think this site helps us all know kinda what we should charge,so thanks again for a great site.

[Finecut]

Nicole,<p>You say that we can't unite? Yes, Nicole you are right, take for example, the farmers. How many years have the farmers been losing money or just breaking even? Another example is the real estate companies, how many companies cut commissions to contract an idealistic house sale? There is always going to be someone to cross the proverbial line. <p>There are 550 people who use this and 10 other common sites, divide that out equally and say you have 55 people at each site. How many lawn care advertisements in your yellow pages? If you belong to any organization you already know the differing opinions you run across. It won't work because WE ALL try to under bid each other - will we try to make it non competitive business? What we all need to do is learn how to do our jobs without making a wasted movement and become as proficient as possible. Then we become competitive! Merge all small companies? It's a pipe dream, partnerships don't work, how can you put all these differing opinions into one workable solution, simply put IMPOSSIBLE.<p>Think about what happened to Dave, someone came in and under bid him by 6% and got the work, nothing improper or immoral. Was this a friend trying to help a friend? Would you ask a friend for the opportunity to bid on their companies work? Would you ask what they are presently paying for their services?<p> When looking at the big picture 6% is diddly? Not really, if each job paid only 50.00 dollars per week and 58 sites times however many cuts per year, your talking a major savings for the management company. Because these people under bid by 6% doesn't mean that they are incompetent or won't do a good job. The proficency of their crew may or may not be better than Dave's crew, but for now they have the job.<p> How do you spend your money? We all try to get the most for our dollar, and sometimes come out ahead and other times end up behind the eight ball - it's human nature. If Dave could have done the job for 6% less and made enough money at that price he probably would have, but for whatever reason he is unable to do so, or choose not to. Now unfortunately, he has to move on and find new accounts to replace what he lost. That is why you need to balance your commercial and residential accounts, don't put to many eggs in one basket. I don't know if Dave charged fairly for his work or if he was over charging, as no one else does, but there is a saying that goes like this, &quot;Pigs get fat and hogs get butchered.&quot; So if you can make a reasonable profit at 6% less that is what you need to charge. Being a self employed person is not easy and the temptation to cut prices is always there, to much one way or the other and you have put YOURSELF out of business.<p>We all have to determine how much we charge per hour and how much it takes to keep our doors open, so to speak. Think carefully before giving out prices, it will determine how long you remain in business. <br>

[Nilsson Associates]

I'm not suggesting &quot;price fixing&quot; ... or contractors confiding in one another about contract bids ... but I have given some thought, toying around with the merger concept for quite some time ... looking for answers ... maybe a &quot;way&quot; that it could be done. Is there a legal form of &quot;merging&quot; companies together under one &quot;banner&quot; yet have each one under the &quot;banner&quot; remain independent as to their ownership of their own businesses? Franchises are something like that ... cooperatives are something like that ... but looking for the perfect solution if there is one so that in various individual local markets, 10, 20 who knows how many, come together under one unbrella so that the 10 or 20 are using the same pricing agendas. Possible? Impossible .. not sure. Can it be done? Is it done through an association, union, collaborative?<br>Can it be done, or forget it .. it will never happen?<p>Phil Nilsson

[Stonehenge]

Phil, I think I understand what you're getting at, but if you are organizing business with the purpose of creating a fee schedule by which these companies would abide, and these companies represent a good chunk of the market share there, you'll want to talk to an attorney. That's starting to walk and quack like a duck. :)

[cjcland]

why do people keep knocking the little guy, where did you guys get the 40,000 to start off with a new truck the best mowers two of everything(just in case)i started with 3000 that i saved working for another lawn company i have a wife and 2 kids , yes i am struggling and yes i am cheaper than some of the others who have $100,000 worth of work, do i do a good job? YES am i growing? YES do i learn from you guys? YES it just seems that some people forget what its like to have very little money in the begining, just because im smaller and cheaper makes me a lowballer? i need more work, you get more work by having cheaper prices, you keep work with quality so untill i establish a name in my community i will be cheaper, i cant afford to get 1 out of 10 bids, dont get me wrong i do make money better than i ever have, i have 1 walk behind 1 edger 1 weedeater 1 blower 1 &quot;pair&quot; of hedge trimmers and 1 chainsaw, do i worry about what would happen if my motor blows?YES am i intimidated by larger companies? NO i will survive and i will grow but it takes time REMEBER? so please dont knock the little guys, wal-mart started with 1 store, microsoft started with 1 operating system, dont get me wrong most of the people on here are very kind to the small guy for the others just try to remember that the guy who underbid you has a family and bills and maybe just maybe they have a lower overhead so just because there cheaper dosnt mean the quality isnt there i know how to do quality work i have been doing this for over 10 years, i just need some help on the business side of this thing, and i am glad this forum is here, thank you<p>----------<br>CJC Landscape Management<br>Winter Haven, Florida

[thelawnguy]

cjcland, your post could have been describing myself. Very well put.<p>If everybody started charging 50 bucks an hour (or whatever) what happens to the senior citizen trying to get by on her 900 a month social security check? Think about it next time you see a yard with foot-high grass that gets cut once a month with a sickle and you flip the guy in his 15-year-old pickup and homemade plywood trailer the bird and call him a lowballer.<p>Theres room on the ladder for everybody, somebody has to be on the bottom rung and somebody has to be at the top rung. Pick your rung, but dont knock the other guy for not picking the same rung you want.<p>Bill

[cjcland]

dont get me wrong i do not choose to stay on the bottom wrung of the ladder i just wanted to remind everyone that not everyone falls into a ton of money to start a business, whats that you say you didnt, thats my point<p>----------<br>CJC Landscape Management<br>Winter Haven, Florida

[Charles]

When I first started I made a survey of what the going rate was. I made it a point to do quality work. I think I charged as much or more than anyone else. I didnt have much money to start. Financed a sears mower. I handed out flyers and put an ad in the paper. I sold my self as very dependable and did quality work. I got plenty of customers that way. I think they respected me because i didn't sell myself or my business short. None of my customer would ever say, hey I got this lawn guy doing my yard for pratically nothing&quot; sucker! Borrow money if you have to. BUt when you are just starting out or been in the business a while. Cutting prices is no way to go. Because when you finally get that customer up to paying you well. Someone may come along and cut you. At least try to keep up with inflation. When I started I kept in mind that I was just as good as anyone else especially when It came to cutting grass. I am running a business. I am not a social worker. I do cut seniors some slack. But most of them I work for drive very nice cars and live in nice neighborhoods. They give way more to their church than me. Do nice restuarants give Seniors free food? Does walmart give seniors free merchandise? Most of my customers are senior. Am I making enough money to do free work? I don't think so. I am all for discounting seniors some. Those who need it. But no one in this business should feel guilty for trying to make a profit.

[paul]

Some thoughts from the other side of the business, today we bid on a three park job( construction). This was a fair size job there where 4 companys bidding these parks,<br>the order of bids at opening;<br>low bid and apparent winner 1.4 Mil<br>second low bid 1.65 mil<br>third low bid 1.81 Mil<br>high bid 1.88 mil<br>This is for the dirt work, underground (sewers, lightings etc.) and landscaping. The difference in price covers my landscaping alone. My bid for the landscaping was $275K My bid package was with the two highest contractors. So I see that it's not just our industy, others have the same problems as us. Pricing the job is an art that is learned, doing the work is what makes or breaks us. All of use have lost jobs, but have been called back to fix it after the other guy messed up, I see this every day, government work is harder to mess up someone is always watching to make sure its done right(they have performance bonds), if you mess up the will hire the next low bidder and you pay the price twice.<p>It's just not us guys<br><p>----------<br>paul<br>

[MJM Landscaping Inc]

CJC, My thoughts.....<br>Youve got too understand something that i think has never been explained here. You, from what ive read are NOT a low baller. IMHO a lowballer is someone who charges low, ridiculously (sp) low and has no intention of ever raising prices. He doesnt have insurance and just all around is not &quot;professional&quot;. Lowballers come in all sizes not just the little guy. I have many very large co's in my area (some national) who are probably worse than the types most people think about. They undercut everyone and deal in high volume. Ive seen $50,000 bids that they have bid at $25,000-30,000!! You are right we all started where you are and like you we had the drive to better ourselves. Of course when you first start out you take what you can get. You then buy better equipment, do good work, your reputation is working for you, and you your prices are higher. After all you should get paid more for quality work, the quality a lowballer will lack. Low prices does not = lowballer IMHO, some people just dont know better and thats why we are here. Also, dont ever go by exact prices given here. Use them as a guide but everyones cost of operation is different. Know your cost!!!! If you do good work, know your cost, and bid accordingly you have nothing to be ashamed of. <br>Sorry about the book i just wrote, i was on a role here. :)<br>Mark A Musolf

[thelawnguy]

MJM, what you have described is not a lowballer but a competitor. Dont knock another contractor because they have lower overhead and can do a job cheaper. I know of guys who work out of the back of their truck under the table after work and on weekends who undercut everybody price-wise, and still do a job that would put the big companies to shame.<p>A reality of the business my friend.<p>Bill

[southside]

People like that who dont have insurance are<br>cutting their own throats because as soon as <br>they damage people/property they are down the tube.Problem is that if they hurt <br>someone and they are uninsured then the <br>property owner become responsible. People like that have no place in this industry.

[SNOWMAN]

Everybody usually starts out small and grows from there, low balling is always a problem in this business, any one with a truck and a mower or car and trailer can be competition, just part of the business.<br>One thing you will learn in this business is the equipment to use to do the good job in a more efficent matter.<br>We don't bid anything by the hour we just set a fixed price for the job and using the right equip. for that jod will usually insure you a copetetive bid.<br>For example the guy that bids 50.00<br>on the job thats going to take him 2 hours (25.00 per hour on his garden tractor) we can do in less than 1 hour on a larzer (and a better job making it min. 50.00 per hour.<br>

[MJM Landscaping Inc]

Bill explain this to me. You dont think the guy working under the table (not paying taxes) and probally without insurance is not a lowballer just because he does good work? If thats what your saying i would have to disagree but thats ok. I might not have explained myself properly before, i hope i didnt sound like i was whining :(. I personally dont care about the lowballer except for the image it may portray upon the industry as a whole. If a customer wants a lowballer then fine, doesnt really bother me. There will always be customers who worry about price only and those about quality only. I want the quality oriented.<br>Have a nice weekend!!<br>Mark A Musolf

[thelawnguy]

MJM what Im trying to say is those types of operators will always be out there, lawn care co-op or whatever wont make a difference, the under the tabler guys are there and will always be there so we just have to deal with it is all.<p>Bill

[cjcland]

thank you mjm i dont consider myself a low baller either and i know what you are saying about over head to be honest with you my profit margin is a little over 100% that is without actually &quot;paying&quot; myself right now i use everything extra for my personal bills and and a savings acct for new equipment, everyone and i mean everyone who has ever posted on this site has helped me in some way, so i thank you all<p>----------<br>CJC Landscape Management<br>Winter Haven, Florida

[MJM Landscaping Inc]

Bill I agree 100%!<br>Mark A Musolf<br>

[thelawnguy]

Some solutions for the right people:<p>http://www.jims.com.au/html/jim_s_mowing.html<br>http://www.uslawns.com/<p>There may be others, you get the idea.<p>Bill