charging to much??? [Archive] - LawnSite.com™ - Lawn Care & Landscaping Business Forum

lawnworker

03-04-2000, 01:16 PM

Hi all i did a spring clean up for a contract costermer that contracts for 8 months out of the year. It was leaf removal and pulling ivy off a wall and dirt pickup from someone else that snow plows This job is outside of the contract time april-nov the job took 2.5 hours do you all think 80.00 is to much to charge are about right sometimes it feels like i am over charging but when you rake up leaves and such it kind of feels like you are doing work nobody else wants to do so you should be charging alot.let me know some opinions on this the lone lawn worker

LoneStarLawn

03-04-2000, 02:36 PM

I think your charge is fair depending on the quality of service you are giving. We have a two man team and we like to give estimates based upon two things: 1. How large the site is. 2. How long it will take. Based on this most jobs come out to 30 hr for two men (15 for each) and we have been told we do quality of work. So if quality is what you are giving then the pay seems reasonable.

Charles

03-04-2000, 06:19 PM

Yea I agree it depends too on what type of equipment you use. How many people it takes to do the job. The better the equipment you use the less time it takes to do the job. The more money you have to charge per hour. The more people you use the less time it take to do the job the more money you have to charge per hour. And you need to charge a service charge in with the price for coming to someones home. I charge more money for my bagger system. I write that time down. When I use my blower. I write that time down. And I charge differently for every piece of equipment used. And when no equipment is used. I had a man come over and repair my washing machine. Took him 20 minutes to replace a hose. he charged me 15.00$ service charge. 40$ labor. Total 55$. You spent 2.5hrs. If anything you were underpaid.

scottlawns

03-04-2000, 06:31 PM

i would of charged more,dont forget what it cost you to buy new stuff and maintain what u got.

MJM Landscaping Inc

03-04-2000, 06:58 PM

lone star, this is meant to help you not put you down. You say you basically charge $15 a man per hour (if i read your post right) You should be charging closer to $30 per man per hour. At $15 an hour you cant be making much of a profit and here is why: employee $7-9 hr taxes,insurance, workmans comp ect. $1-3 hr administrative cost(office, computer, rent ect) $1-3 hr truck expense $3hr equipment cost $? hr (depends on what you are using) profit ?% so that adds up to $12-18 hr it COST you to be at that job. Now my numbers dont reflect my co's cost and im sure there not yours but you can see my point. You need to figure out your cost (every co is different) and use that to guide you in your pricing. If you think your hourly rate sounds too high, dont give it out. Price by the job, but you better be good at estimating your times. I can tell you this that the average hourly rate is between $25-40 hr. A comment about the original post. Your price sounds good to me. It equals $32 hr per man ( thats if you did the job by yourself, if you had any help then you are low) Some things to consider though, its off season work so some co's charge a little less than there hourly rate ( but dont give it away) and what kind of customer is this? Do they pay on time? Complain alot?(unwarranted complaints) do you get alot of work from them? Consider all these things when deciding if your going to give them a break. Mark A Musolf PS: Sorry this was long, been couped up with sick wife and daughter all day! :)

hall

03-04-2000, 07:06 PM

We charge $40 a man hour for cleanups with a 3 hour minimun. So, $120 for a crew to work for an hour. Also, my mininum per cut is going to $40 per cut this year on residentials. Work smarter folks.. not harder.

cutntrim

03-04-2000, 07:16 PM

Hall is on the ball. We charge $40/man/hour as well. But it wasn't too long ago that we were only charging $20/hour. We realized we were ending up receiving negative returns on some of the work we were doing and now we charge what it REALLY is worth for us to do extra work for a customer. I'm sure you can cut two $20 lawns (if you even charge that low) in no more than one hour by yourself. Cutting is less labour intensive than leaf raking. You can see why your efforts should get you $40/hr.---------- Dave in S.Ontario

LoneStarLawn

03-04-2000, 08:18 PM

Yes its about 15 an hour MJM Landscaping Inc. Reason being there is two of us and we charge around 30 to cut residential lawns. It takes about 45 min to an hour using 21 in. mower, blowers and trimming and edging. The trucks are ours so that expense is already covered. No employees, no workers comp., no ins. If we charge say $40 an hour per man that would be $80 for res. lawn. I really don't see many custmers paying that, do you. When we get larger and have bigger equipment, time we be shorten and the cost will justify itself. Thanks for the input though.

kermit

03-04-2000, 10:54 PM

Hey Lonestar,I wish you were near me. If you are going to work for wages you'll never really get ahead but, hey, if your'e into it I'd sub all the work you'd care to do. You should do yourself a favour and get a book on how to figure your costs and make a profit. I really wish people would charge what they're worth because you drag down the price for all the rest of us!

Retro67

03-04-2000, 11:03 PM

As a "one man band" this is something I see different for those who run crews. Three times the workers doesn't necessarily (usually won't) equal three times the output.I don't think most people that would work for me would be willing to work as fast and efficient as I do, unless they were on commission. At some point, your workforce productivity comes in to play in your price. This is a fact I see often overlooked in posts. If I can do myself what two crew members can, obviously I can put more money in mypocket on an hourly basis. Smarter, not harder is where it's at. Figuring out ways to save time and energy is where the money is at in this industry. If you can master that, you will earn as you should. John

LoneStarLawn

03-04-2000, 11:22 PM

Hey Kermit..How many lawns a day do you cut and what do you charge for them. Also how many times a month do you mow those lawns and what services do you offer them. We have a two man crew (A friend and I) who are just starting out. Here in south Texas most lawn care businesses charge from 25 to 40 on residential lawns based on size. These lawns are cut very frequent and are maintained on a regular basis. Based on competition in south Texas charging for more than 45 or 50 is unreasonable due to the fact that lawns need to be frequently mowed and for the fact that competition can easily underbid us. I think charging thirty is reasonable and fair for both the consumer and as well as for us. If there is any opinions on this please let us know we would consider any suggestions.

yardsmith

03-04-2000, 11:40 PM

I always quote the job; I never tell res. cust. my hourly rate (they'd freak). All most people see is from their reference point. Bidding on a cleanup job, they look at how long it would take them by hand (hours) & fig. your quote sounds about right for how long it would take them. Emphasize the JOB, not how long it takes- that has nothing to do with it. It pans out the same- you can charge $45 to push mow a med. size yard & take an hour, or spend big bucks on a ZTR & do it in 15 min. One way is paying for your labor, the other is paying for your equip costs. I'd rather have the equip. to do more per hour & charge the same as if you'd push mow it & kill your self. You work or let the machine do the work. That's part of what working smarter is about. As for the washer repair guy, give these kinds of references to picky customers- We had Roto-rooter come out every 2 yrs. to cut out tiny tree roots in our drain tile. He put the snake down in the hole & turned it on for about 8 sec. Then pulled it back out & loaded up the truck- $75!!!!! His excuse was "well we'd stay here & clean it even if it took 3 hours (it never does) for the same price". That was the last time he ever got a call again. The customer concept isn't too knowledgeable. I'd feel satisfied if it'd taken him 3 hrs to clean my drain. But I payed for him to accomplish the JOB, not for him to make an afternoon of it. Also next time someone gripes about your price, quote them how much you have in equip, or how much you spend in gas a year, or how much it costs to insure your business. Then they'll see things in a different light. Just be darn sure you do a good job for how much you charge.---------- Smitty ô¿ô

LoneStarLawn

03-04-2000, 11:49 PM

We do that as well. At this time most of our accounts are small. We charged by the size of the site and the job at hand. If we quote $30 and it takes us 15 min. then its $30 If it takes an hour then its $30. As we get bigger with bigger equipment, which means job completed quicker, the price will stay the same or probably go up.

ChrisYanik

03-04-2000, 11:52 PM

Charge to much???? What the **** is up with that son...your not charging ot much.........you need to charge MORE...I charge 40 dollars for the first hour and 30 dollars for each additional hous and guys still tell me that I'm no t chargeing enopuygh money. Charge that ***** 85 dollars .Thats A reasonalbe price to charge someone....remedmber...It's your ass oput in the heat sweating your ball's off. **** Those rich up-ity nosed doctors wife's. I hate those damn ******. They're f)_ing lazy and then they desecid to fire your ass after you bust a *** working for them all damn year long. Bottom line is athat you should never ever think that your chargiong to miuch becasue your not.. It's the customer who just dosen't want to pay you because they're rich and they don't work for their money....so they hate to give it away because they don't know what the FYUCJK an honest ddahy's work reqally is.Who whats to take a hit aT me now ZBIGTCH szredf

Retro67

03-05-2000, 12:01 AM

I have yet to use a book to figure out how long it takes me to perform a task. If you follow the forums, you get actual numbers rather than theory. Nothing will replace experience in bidding, not even someone else's experience. We can help, but ultimately your set of circumstances will dictate what a job is worth and what you can get for it.I was out measuring for bids today. I talked to the owner of three of the propeties I am bidding. The charges from the current contractor are $30, $30, and $15 for commercial properties. Not big pay by any means, but profitable, nonetheless. My better service isn't going to sell this guy because he doesn't know me from Adam. I have to beat the current price to get a shot. The bottom line is, sometimes you have to figure out how to do a job fast enough to make it profitable. I told the guy I'd do it for $275 per month total. Which is $25/month less than it would cost him servicing the property 4 X per month with his current company. I haven't really given much of a discount, if any because there will be months it won't need cut even 3 times. He liked the idea of "saving money". If you really want to know how to price, measure one of your current jobs. How long does that job take? What characteristics make it take more or less time compared to other properties of similar size? Are you happy with the profit margin of that job? If so, you have a basis to judge others by. Just my thoughts.John

Charles

03-05-2000, 08:37 AM

Lonestar, you will find out the 30$ for one person per job is not much money in the lawn service business. Much less 2 people. You could actually go get a job at walmart or homedepot of mcdonalds and make just as much money as that. Those companies offer full benefits and a retirement plan. Figure up your expenses at the end of the year. The basic ones will eat up alot of the 30$. All that equipment you are using will eventually have to be repaired and replaced. Minus the gas and oil mix. If you are not paying taxes on this income that may eventually catch up with you. Lets just for comparison sake. A Ups man makes 27$ per hour starting pay(including benefits) Without having any expenses. He make this all year around. I agree with the statement that the people in the business who charge less than they are worth are dragging us all down. I am not criticising you just trying to help. I don't think I am charging enough either. The competition here is fierce. But I only take profitable work and leave the rest for those who are happy to pretend that they are making money.

Jay Raley

03-05-2000, 11:03 AM

Retro hit it on the screws. Your price gets you in the door, your quality keeps you there. I haven't met 1 property owner that will give someone a shot with a higher price that they don't know. Foresight on the job will make a world of difference here. If you think that the job could be really profitable for years down the road bid enough to get you in the door and still maintain some kind of positive profit. Next year when you bid the job again (if you even have to bid the job again, quality should keep you there) make adjustments in the price to start making more of a profit. The most important thing is to keep you cards close to your chest and don't tip your hand to the property owner when figuring increases in prices. It is a fine line to walk and some customers, no matter how much you bust your tail for them, will always go with the lowest bid. Don't get discouraged, Rome wasn't built in a day. ---------- Jay Raley The Good Earth Grounds Management

Nilsson Associates

03-05-2000, 11:54 AM

What would happen if everybody in this industry were to start charging what they should? $45.00 an hour $50.00 isn't asking too much .. problem is that the industry is "self defeating" .. customers have been getting the services too cheap for many, many years. Is there a remedy for this?Phil Nilsson

Retro67

03-05-2000, 12:24 PM

Phil-The rates you discuss are below the prices I'm undercutting, though. I don't know how long it takes the competition to do, they may be slow as molasses and make $30 an hour. If I can do it $5 per cut cheaper and still earn $60 an hour, do you think I'm doing the industry a disservice and driving down prices? I just want to know your opinion, not trying to disagree. I just wonder how this fits into your view of things.John

thelawnguy

03-05-2000, 12:37 PM

Just to try to put everything into perspective, his $15/hr rate may be fair since he's using a 21-inch mower, but Ill get $60 an hour since Im using a 52-inch mower.When I first started mowing all I had was a 21-inch Lawn-Boy, the $20 lawn at the time would take me 45 minutes, now I can do the same lawn in 10 minutes at 25, but back then it would still go for 20.Everybody cant charge the same 'cuz everybody doesnt have the same equipment and expertise. I, like Retro, work by myself and I hustle my a$$ off, I can finish a lawn in the same time a crew of three can do the neighbors lawn, they spend half the time re-mowing and re-blowing and re-trimming the other guys work. Maybe someday when my back or knees give out Ill hire help, but for now I do jus fine by myself. And I dont have to split my premium price with anyone but the wife and kids.BillPS Phil, look out the window when the guys start mowing next month and think, maybe they DO charge what they're worth. Esp when one guy is using the trimmer to hold himself up while the other guy finishes mowing and the third guy is sitting on the curb having a smoke break.

Nilsson Associates

03-05-2000, 12:40 PM

Retro67 ... You're located in what looks to be a good market, so when making post I have to assume that some folks are in tighter markets dealing with lowballers .. having to compete on far less than what you could get. I'm for charging the maximum that the market will take ... problem is some of the low ballers have to raise their "bar" so that the lowest price per hour might be $45 or so as a starting point ... many are holding everybody else "hostage" keeping prices depressed even in this good economy.Owners should be able to make a minimum of $75,000 a year even if they aren't running "flat out". $100,000 plus is more like it though when you figure the hours put in. Tough, hard work where you're wearing out your body and your brains, stress, worry, employee problems ... green industry folks are worth it .. look at what other people make doing jobs that don't require anywhere near the energy and determination.Phil Nilsson

Charles

03-05-2000, 01:14 PM

Phil, you hit on the problem this industry has. Just because the guy is using a push mower doesn't mean he should cut the going rate for a standard yard. Now it is going to take him longer using a 21 inch and hes going to make alot less per hour. But one guy pushing a 21" mower in a seasonal business is not going to get out of the poverty level. You need to be making at least, like Phil said, 45$ to 50$ per hour to net any real money. The going rate around here has been stuck at 35$ to 40$ per 1/2 acre yard. Which takes you an hour to mow blow and trim. One man that is using a 60".

Retro67

03-05-2000, 01:21 PM

I'm not sure about the good market here, I just think the efficiency of some companies isn't there. I have to make every move I make count in order to earn those rates. There are some really good companies here and some that are really poor. I do believe there are markets such as the ones you speak of. Surely the numbers you suggest aren't for a start-up owner-operator? I can see the potential in a couple years, but those seem like big numbers for a guy trying to build a business. I do think, however foresight is a good idea. John

Nilsson Associates

03-05-2000, 01:50 PM

A person capable of running a crew as crew leader or foreman can make $50,000 plus working for one of the "Nationals", not be at risk for equipment investment, have a "place to go" promotion wise etc. etc. so that's why I feel even a new startup (using the right equipment of course) should be able to pull down $75,000 a year just for starters. The blood is the same, so is the sweat. Lots of body parts are being worn out without people realizing it, breathing exhaust fumes, working 60 hour weeks plus, has to count for something.Phil Nilsson

curlawngreen

03-05-2000, 04:52 PM

I would calculate that you are grossing almost $100,000 by yourself? That would be a 40 hour work week, 40 weeks a year. Tell me where your at. Sounds good to me and my girlfriend. Our bags are packed.

LoneStarLawn

03-05-2000, 05:14 PM

Can someone let me know in what city do employees at McDonalds make over $30,000 starting out and where a UPS driver makes over $50,000 starting out. I know with a Engineering degree from an good university that the starting pay is from 25,000 to 30,000 a year. The job of cutting lawns can be easily performed by someone who dropped out of high school. So starting out making about 25,000 after expenses without a degree required is pretty good since, and I hate to say this, no special talent or knowledge is needed. (But can be acquired with experience.

hall

03-05-2000, 05:51 PM

Ha, my biggest bonehead employee is my hardest and best worker. This guy prolly can't even read or add 2 + 2 but he works from start to finish without stopping and the job is done right every time. He has been working for me for 6 years and he still can't remember the route... yes, he is that ******ed. But, he has never caused an accident or put anyone in danger. This guy could NEVER run a lawn company!! It takes more than hard work to run a company. If you don't have business skills you will fail.PS.. my cousin graduated from Rolla University last year with a electrical engineering degree and he started off with a 68k job. Education in any field pays.

parkwest

03-05-2000, 05:56 PM

Some of you guys need to take a look at where you are aiming because, when you squeeze the trigger that is where you are going to hit. You need to ask yourselves, Why can't I make money with my employees when every other business in this country does? Could it be you are under pricing you services to chase down a potential client, afraid that you won't get the job if you price it right.I once asked a subcontractor of mine how he bid jobs. He said, "No matter what you have to bid the going rate and hope you come out in the end in the black, sometimes you win sometimes you lose." I first asked him how he was sure the other guys prices were right. I then asked, how would he like to work half as much and make twice the money. He asked "how." I told him "BY ONLY DOING THE JOBS THAT MAKE YOU MONEY!" If the consumer can't afford the job that is not your problem. You can not contine to subsidize the consumer and stay in business. I think some of you would benefit greatly by investing $500.00 in books, magazines, videos and anything else you can get your hands on about contracting before investing 10's of thousands in equipment.You guys should be having fun in this. The stress of worrying about making payroll or paying the bills because you're only making $5/hr after expenses would not be worth it to me. Good luck and God bless you all in the upcoming season.

SLSNursery

03-05-2000, 06:16 PM

Lawnworker, I'd like to offer some comments based upon part of what Lonestar mentioned. He said that his truck was paid for so it does not count as an expense. Regardless of whether you are a startup or a veteran, charge 15/hr. or 1500/hr, drive old trucks or new, this philosophy is wrong. If you intend to remain in the business you need to figure out why you are charging what you charge. For instance, when the truck is gone in 5 years, have you factored replacment cost into that 15.00/hour. If so, then that is covered. How about mowers, new equipment, etc. I buy new trucks as they are needed because our charges are based on keeping everthing rolling. I used to own everything outright, and charge about $25-30/hour in New Haven CT, late 80s-early 90s. As I came up with business plans, I couldn't figure out why I wasn't able to readily buy a couple of new trucks. After all, I put 15-20000 miles on 2 every year. The problem was that I had paid for them, but my business wasn't getting paid enough to use them. As you gain experience, you will understand what I mean. No matter who you are or at what stage of business you are in, IMHO, if you feel that you don't have any overhead, or that you don't have workers so there are no related expenses, then you are missing the point. You are the workers, as others have mentioned. And, all of the points that MJM made apply to you and your actual costs. Only after these considerations can you determine what rate you need to charge to break even, how much you intend to mark that up, and what you expect to clear each year. If you decide to operate within the portion of this business that has no barriers to entry, that's fine. You still need to operate professionally and responsibly. Don't present yourself as doing the work that no-one else wants, and for less. When we do that kind of work, in addition to the other jobs we run, we sometimes charge more, just to maintain higher standards. Sure, some people think its crazy to pay that much, but then they weed themselves out of our client base.---------- Phil Grande - Soundview Landscape Supply - http://members.aol.com/slsnursery Ivy League Landscaping - http://members.aol.com/scagrider

LoneStarLawn

03-05-2000, 06:33 PM

The largest lawn care service in San Antonio, Tx. charges $20 per man hour. The crews are three men strong so the job of two of us that takes 45 min for $30 would tkae them 30 min. Therefore ($20 x 3 men = $60 hr...1/2 hr = $30) the charges are pretty much the same..we just take longer with less equipment. Plus that company is 85 employee strong. I think they are doing pretty good.

MJM Landscaping Inc

03-05-2000, 06:46 PM

Phil great points! I think a major downfall of co's is how they deal with equipment cost in there bids. It doesnt matter if your equipment is paid off, you recieved the equipment for free, or you are making payments on it. It gets treated the same. If the equipment is not factored into the bid how will you replace it when it dies or when more efficient equipment comes around. I know Phil just mentioned the above but i felt it is worth repeating. Lonestar: You say you charge $30.00 for most of your lawns that take you 45-60 minutes to complete using a 21" push mower. That price is prob. not bad and heres why. That same lawn you probally can complete in 20 minutes with a ztr thus making you $45 hr per man. But i still beleive the cleanup pricing is off. Just my opinion.:) Mark A Musolf

MJM Landscaping Inc

03-05-2000, 06:53 PM

Lonestar, I would just like to add something and others might not agree. But that large co might not be the best example to follow. You say they have 85 employees. To me that means they can undercut the competion because they dont have to make as high of a profit per man then say a co with 5 employees. I know of several large co's in my area that do this, they work in high volumes to make up for what they charge ( or dont charge i should say) I realize they have more expenses but if you really sat down and figured out how much it would cost you to add another crew and how much profit that crew can generate, you will see whati mean. Mark A Musolf

Charles

03-06-2000, 08:44 AM

It wouldn't be a bad idea to keep up with these times: 1) Loading and unloading. 2) Maintance of equipment, sharpening blades, going to and from the shop etc 3) Answering the phones and talking to customers and sales. 4) Training new employees if you have any. 5) Giving out estimates. 6) Maintenance of trucks or vans. All of the above is what seperates a businees owner from a salary employee. You just can't say you spent only an hour on a yard and think you are making 30 or 40 or 50$ an hour. I bet if you kept up with the times spent doing the above it would be alot less than that.

BUSHMASTER

08-06-2000, 03:53 PM

ARE YOU IN THE BUSSINESS FOR YOUR HELTH OR TO MAKE MONEY!!!!

this was and sometimes still is a downfall with me....
yea stupid but sometimes i feel kinda bad about making a little money on folks but my children have what they need and i do not lose any sleep....

AGG Lawn Maintenance

08-07-2000, 08:39 AM

For a year round customer we charge 4 times a cut for clean ups. Say at $40.00 a cut Clean up would be $160. For a new customer it might be $300 plus depending on the last time they got a clean up done. Travis AG&G Lawn Maintenance

LoneStarLawn

04-23-2001, 07:11 PM

I know this is pretty old, but after reading my posts from over a year ago (when we were starting out) our efficiency has improved and we are getting around $90 hour ($45 per man)...still at the same rates that we were given a year ago...Alot has to be credited to our improvement in the industry and larger equipment.

[Edited by LoneStarLawn on 04-23-2001 at 07:13 PM]

LJ lawn

04-23-2001, 09:41 PM

here we go again on the pricing and wage issue.i still want to see that solo op just starting out grossing the "easy 70 g's " i'd have to be mowing over a 100 lawns a week to pull that off.it sure isn't around here. 50 grand starting salary to run a crew with a national co.and scream at some idiots sounds like fun, where do i sign on.sure would beat dealing with all the ag and hassles of running around like a maniac by myself.

jaclawn

04-23-2001, 09:48 PM

Working backwards, $100,000 gross per year divided by 32 weeks= $3125.00. $3125/6 days per week =$520.00 per day. $520 per day/10 lawns= $52 per lawn. Doesn't seem too unrealsitic when you look at it that way?

LJ lawn

04-23-2001, 10:06 PM

who is getting $52 per lawn?? that's unrealistic around these parts. the average is $25-$35 per lawn so in order to make $500 a day someone would have to cut 15-20 lawns a day 6 days a week, so you're looking at at least 80-100 lawns a week.so if when you do get a call for other work like thatching, aeration,hedge trimmng, mulch etc, when does a person find the time to do the extra jobs? what do you do if it rains? there ain't no way being solo i'm going to do that many in a week let alone actually GET that many to do (and who'll pay) because of the oversaturation of lawn services.

jaclawn

04-24-2001, 07:53 AM

LJ- I don't think that it is all that unrealistic. It would not be easy, and it would take some time to build the "right" route, with the "right" customers, but I do think that it is possible.

As far as the add on jobs, simply do a little less mowing, and schedule 1 or 2 days per week to do those add ons. Just make sure that you bring in at least the same dollars per day as you do mowing, and you are still on track.

All contractors need to block out "the going rate". Bid what you need to, to make the amount of money that you want. If you are good, and can sell yourself, you will get the rate that you want. You will not win every job that you bid on, and that is OK. I can understand the thinking that it is better to work for $35/hour than to sit at home and work for $0 per hour, BUT if you get in the groove of bidding low, you will stay there for ever.

An example: MOst car washes around here charge about $5 for a basic wash job. There is one though, that charges $8. The $8 place has cars lined up for 1/4 mile all day long. Why? They are the best at what they do, and there are people that are willing to spend the extra to get that quality. Same should apply to this business as well.