PDA

View Full Version : My New Pricing Technique


grassman83
06-17-2008, 03:23 PM
To develop some level of consistency I felt like I needed to come up with a standard.
What I do is when I get a request to quote I get their address and go to the county appraisal records. I take their lot sqft subtract it from the house sqft.
I take that number and mulitply it by .oo4. That is how I get my price. If the lot has alot of difficult areas to mow then I round up. If not, then I leave the price as is. I have a minimum of $25 to keep from getting to low. I have been using it a while and seems to work good. So for the area I work it is mainly between 25-35 per lawn.

Lot sqft 12000 - House 2500= 9500 X's .004= $38/cut
What do you think.

kleankutslawn
06-17-2008, 03:30 PM
if it works for you doen't seem to easy for me

KGR landscapeing
06-17-2008, 03:37 PM
YA i didnt go to MIT either i know the time it takes me to do certain tasks and mowing quotes after seeing the property i can give those quotes in mysleep i know what i need to make. not to many people like my quotes normally i am on the highside.

Grasshog
06-17-2008, 03:39 PM
If it works for u. Great... I like to see and meet the future customer.. Walk the lawn, talk about the things we see and want out of it.... Then slam down the price.

k911lowe
06-17-2008, 03:40 PM
huh?what was that again.seems kind of complicated.

Scagguy
06-17-2008, 04:06 PM
If it works for you, great. But, in my case that wouldn't work at all. I some 9500 ft properties that are xxxx amount then I have others that while they are the same sq. footage they might be almost double because of the amount of trimming, equipment used and other factors.

brucec32
06-17-2008, 04:47 PM
crazy idea. Drive out to the property. Meet the prospect, let them get to know, inspect, and trust you a little. Look at the lawn and determine, based on experience, how many man-hours you'll need to mow the lawn. Then plug that number into your formula for what you need to make per-hour on-site and add a trip charge based on your average cost of getting around. Fudge the number up or down a little if the lawn looks particularly difficult or easy or convenient. (flat open rectangle of grass vs ornately landscaped sloping lawn where you have to carry a 21" mower down a flight of stairs to reach the back yard, for example)

Runner
06-17-2008, 07:41 PM
LOL! Works GREAT! Uh,..that is....until yo find yourself trimming 600 linear ft. of fencing, going around the shed, the birdbath, 3 beds, 4 trees, and half a dozen rocks and such. Oh yeah,...let's not forget the 8000 sq. ft. that is joined by a narrow area that only the push mower will fit through.
Like was stated before,.....just look at the prop., and always know. There are no magic formulas.

railman
06-17-2008, 09:07 PM
If it works for u. Great... I like to see and meet the future customer.. Walk the lawn, talk about the things we see and want out of it.... Then slam down the price.

that's exactly how I like to do it.

STIHL GUY
06-17-2008, 11:28 PM
sounds pretty confusing but whatever if it works for you

Oldtimer
06-18-2008, 08:29 AM
The look, guess and hope method is the norm for this industry. Remember, everything you purchase is priced based on the seller's costs.

I know, from personal experience, the majority of LCO's feel they can just look at a property and give a price and that is the way most of them bid. It takes a lot of time to develop a business plan to know exactly what your costs are and bid based on these costs.

When a LCO develops a business plan to the point where he knows his fixed costs right down to the minute and projects the total cost to mow a yard he will know exactly how much profit will be made. Every business bases the selling price based on profit margin and a lawn maintenance business is no different.

You are using up your equipment, paying a lot for fuel, parts, labor, absorbing equipment depreciation, losing sleep, managing employees and doing all the rest of the owner things so it is very important to know your costs in order to stay in business.

There are price increases everywhere and a LCO shouldn't be expected to absorb them so if he knows his exact costs he won't be afraid to drop the accounts that are not producing his required profit margin.

If you fail to plan, you plan to fail!

Oldtimer
You can trim the sails but you cannot direct the wind.

Gardens55
06-18-2008, 08:35 AM
Seems like the method is working for you. You must take account of other factors though surely? Because it's not just a matter of the size of the yard.

lostmdboy
06-18-2008, 08:38 AM
I like to meet the people first too. That way you can maybe get an idea of there attitude. If they seem nice the price always is a little lower. :D

grassman83
06-18-2008, 09:30 PM
I still meet with all of my potential customers. I came up with this method to cover all associated costs on a lawn, and develop consistency. If I use my method I know that my efforts are covered.
Take 10 of your clients, find their sqftage, look at what you are charging, and see if you can come up with a number.
I took my highest customer and went with that price which was .004.
Dont knock it till you try it.

Safari Lawn
06-18-2008, 09:41 PM
Grassman, I have heard of other guys using a similar (if not the same) approach. I am like most of the other guys here that like to meet the owner and discuss a few things. I also have a pretty good idea of how long it will take to complete the job and what I need to make per hour. If your formula works for you and you are making a profit and able to maintain your business, then I say more power to ya'!! :clapping:

Az Gardener
06-18-2008, 09:57 PM
Don't let the solo's and what not discourage you. You are right to have a system and yours seems good to me.

The beauty of your system is you are freed up to do other things and delegate your bidding to some one else weather or not you choose to do it is not the point. The fact that you have a documented system in place and you have removed emotion from the process is a huge step in the right direction for your business development.

Kudos to you :clapping:

zak406
06-18-2008, 10:29 PM
Whats the .004 represent y not .008 or .009

grassman83
06-18-2008, 10:39 PM
.oo4 cents a square foot. When a client asks for more than just standard lawn care (weeding beds, trimming shrubs, or something other than mowing and trimmin) I may raise the rate to .005 or .006.
.004 is just my standard mow only rate.

TPendagast
06-18-2008, 10:44 PM
That exact formulae was invented by The Brickman group some 15 years or more ago.
measure sqaure footage of property and multiply by .00048 this will come out with a "time".

example 10000 sqft x .00048 = means it will take .48 of an hour to mow.
Take your hourly rate (say $45 for example) and multiply it out .48 hrs x $45 per hour = $21.60

I usually take that and round up say to $25 to cover the trim.

this number represents what it takes to mow the ln with a belt drive 48.

Brickman Group has a bible sized pricing guide with all the size mowers they own so you basically look it up like you are looking in a chiltons manual for a part number.

They have all mowers and sizes and different difficulty ranges. I just remember .00048 because its a number for an easy 48 belt drive lawn

whoopassonthebluegrass
06-19-2008, 01:55 AM
LOL! Works GREAT! Uh,..that is....until yo find yourself trimming 600 linear ft. of fencing, going around the shed, the birdbath, 3 beds, 4 trees, and half a dozen rocks and such. Oh yeah,...let's not forget the 8000 sq. ft. that is joined by a narrow area that only the push mower will fit through.
Like was stated before,.....just look at the prop., and always know. There are no magic formulas.

Have you been scouting my accounts? :laugh:

whoopassonthebluegrass
06-19-2008, 01:56 AM
I'll stick with the old "bid 'em like you don't need 'em" approach...

GSMOSS
06-19-2008, 04:04 AM
This does work well for smaller lots;I used the same technique in the beginning but got away from it when I got into larger lots. For example, 43000 sqft x .004 = $172.00;that's way too much for less than an acre on a zero turn don't you think.:cool:

TPendagast
06-19-2008, 11:56 PM
well,

The Zero turn costs alot more money to buy. Back in the day when the 48 belt drive was the regular mower. People had to pay $150 for an acre. However dumb-koffs bought turf tigers and bid them at $60. Then when their turf tiger wore out somehow they never wereable to afford another and went out of business.
Gee wonder why that happened?

These days use another number for 60" ZTRS than you use for 48 walk behinds and another number for 21's

Then look at the property decide which mowers you will use in which areas, treat them like differnt lawns, and then add the areas.

Get an hourly production rate for all your mowers (in the style of brickman)
SAy the 21 does 12,000 sq ft an hour
Say the 48 does 35,000 sq ft an hour
Say the 60" does 43560 sq ft an hour.

You pull up to a property that is an acre.

There is 6000 sq ft that can only be done by 21 (up a set of strairs by the pool) and large backyard area that is 20,000 sq ft and some rolling hillly area in the front that would be best done by the 48 walk behind and is 17500 sq ft.

Obviously, based on production rates above ( i just totally made them up could be different for every contractor, time your own):
You have 30 minutes of 21" time, 30 minutes of 60" time and 30 minutes of 48" time.
bill the 21 out at say $36 per hour (machine costs less and uses less fuel er running hour) bill the 48 out at $46 an hour and the 60" out at $60 per hour (anyone who bills their 60 inch ride out at less than 60 per hour is insane in my book)
This means you have (18+23+30) $71 in mowing and then figure some time in for the weed eater (at $35 per hour) and the blower (at $35 per hour) lets say another hour there. That acre lawn just came out at $106.

Again production times and hourly rates are hypothetical but you should have production rates forall your equipment separately and your recovery rates for differnt equipment should be different (i.e. you should not be charging the same $50 per hour for your 21" that you charge for your 60")

Time everything, get your standard production rates, add in all the machines different production times and hourly rates.
This will give you a base and then from there feel free to adjust up or down dpending on difficulty level.

N.TX
06-20-2008, 12:07 AM
I almost always do quotes over the phone. I will find out their lot size.... give them a price. I will ask them some questions about their property and let them know that if there is anything out of ordinary or it is a property that will take a really long time then the price will be adjusted after their first mow and they will be notified before we mow again. I also tell them if its tall the first one will have an hourly clean up fee. What i cant imagine is trying to drive around wasting gas and time to bid each one. I know the neighborhoods.... if i dont then i usually dont service it anyways. There is always one or 2 that i quote wrong but most of the time it works out in the end.

Az Gardener
06-20-2008, 12:14 AM
well,

The Zero turn costs alot more money to buy. Back in the day when the 48 belt drive was the regular mower. People had to pay $150 for an acre. However dumb-koffs bought turf tigers and bid them at $60. Then when their turf tiger wore out somehow they never wereable to afford another and went out of business.
Gee wonder why that happened?

These days use another number for 60" ZTRS than you use for 48 walk behinds and another number for 21's

Then look at the property decide which mowers you will use in which areas, treat them like differnt lawns, and then add the areas.

Get an hourly production rate for all your mowers (in the style of brickman)
SAy the 21 does 12,000 sq ft an hour
Say the 48 does 35,000 sq ft an hour
Say the 60" does 43560 sq ft an hour.

You pull up to a property that is an acre.

There is 6000 sq ft that can only be done by 21 (up a set of strairs by the pool) and large backyard area that is 20,000 sq ft and some rolling hillly area in the front that would be best done by the 48 walk behind and is 17500 sq ft.

Obviously, based on production rates above ( i just totally made them up could be different for every contractor, time your own):
You have 30 minutes of 21" time, 30 minutes of 60" time and 30 minutes of 48" time.
bill the 21 out at say $36 per hour (machine costs less and uses less fuel er running hour) bill the 48 out at $46 an hour and the 60" out at $60 per hour (anyone who bills their 60 inch ride out at less than 60 per hour is insane in my book)
This means you have (18+23+30) $71 in mowing and then figure some time in for the weed eater (at $35 per hour) and the blower (at $35 per hour) lets say another hour there. That acre lawn just came out at $106.

Again production times and hourly rates are hypothetical but you should have production rates forall your equipment separately and your recovery rates for differnt equipment should be different (i.e. you should not be charging the same $50 per hour for your 21" that you charge for your 60")

Time everything, get your standard production rates, add in all the machines different production times and hourly rates.
This will give you a base and then from there feel free to adjust up or down dpending on difficulty level.

Right out of the Vanderkoi textbook

TPendagast
06-20-2008, 12:22 AM
Although I know of Vanderkoi. Ive never been nor read any of his materials.
This info has been around alot longer than that.
Like I said Im darn sure Brickman Group has been doing it this was at least back to the early 90s if not 80s and they certainly don't have the owner go look at all the lawns. It's a way for hired estimators to have a uniform system, obviously it works for them, arent they #2 or #3 in the nation for maintenance sales?
I did it like this myself in commercial mowing for 5 years and I still run spread sheets based on this forsmall mowing accounts I do here and there today.

I can guarantee you the nations top forty (and likely top 100) companies do it exactly like this.
Going to a property and 'guessing' isnt only old , its unprofessional.

laxative
06-20-2008, 12:56 AM
I like it, if you have quick access to the numbers.

Tony Clifton
06-20-2008, 10:16 PM
Seems like a good idea but it won't work.
You could have a 1 story 3000 sq/ft house on a 10,000 sq/ft lot with 1000 sq/ft of driveway and have 6,000 sq/ft of yard area. Or you could have a 3,000 sq/ft house that is 3 stories on a 10,000 sq/ft lot with 100 sq/ft of drive which would mean you would have 8900 sq/ft of yard area.
Not only that, but the yard may be entirely grass, all trees, or 90% of it could be fenced in with access only with a 21" push.

shovelracer
06-20-2008, 10:40 PM
There was an article a few months back in a magazine about a company that spent years working on a system that does just this. Essentially the client goes online, enters their address, fills out a questionare, gets a price, and the crew shows up in a day or two. All this without ever seeing the lawn. They claimed it to work, but it supposedly took a long time and a lot of money to develop.

topsites
06-20-2008, 10:48 PM
I've been doing that for years but I only do it to get a heads up, it does help a little.

I would love nothing more than never leaving the house except to go do the actual work, that would rule.
But if I had to decide between giving an estimate only one or the other way...
And one way would be to go look at the work,
the other would be via County data?
I would go look at the work.

MowHouston
06-20-2008, 11:00 PM
I use the same sort of method, but I have all of my lawns priced in 1,000sq ft increments.

I used Zillow.com to check out properties, lot size, house size, etc, most of the time I can see what needs to be edged around and compensate for that.

95% of my business is online, I rarely meet my customers in person for the first time unless there is a flower bed cleanup, mulch installation, etc.

But I do make it a point to chat up my customers if I see them. doing estimates online takes away the cost of the free estimate. All of my lawns are priced very well, not losing money anywhere.

At first, it was different to get used to and I had to correct a few estimates, but its great now.

I'll check out this formula and see how it compares to my current prices :)

TPendagast
06-21-2008, 12:07 AM
I'm curious about all the people who say the formulae system wont work when the people in our industry who have been doing it the longest and making the most money at this ARE using this type of system.

In Grand junction colorao we used to use a GIS system to actually look at the job sites via satellite (and it gives you measurements too).
But you still have to GO to the site.
We just used to have the stimate done before we showed up and then walked around briefly to verify things with our eyes.

For those of you who dont want to leave the house except to do work?
Go back to your day job. Estimating IS the owners business.

For those of you who dont beleive in formulae, what do you do? GUESS? or give people you like better prices and people you dont like worse prices? All that does is make sure you aren't making a profit on one lawn and making too much on another.

jp3gordon
06-21-2008, 02:20 AM
In my area it is important to understand the basic size of lawns in the neighborhood the lawn is in. Then take a look at the arial photograph online while you are talking and ask a few questions that are important. Do you have a fence? Can I fit my equipment into your back yard? Do you have a lot of obstacles I have to trim around? Then you give them a price range of five dollars, lets say $40-$45. Then you can sign them up over the phone and not worry about them calling someone else. All of this is done while you have them on the phone, and the questions you ask combined with your experience on how to rate customers over the phone and how well you know the neighborhood.

David Gretzmier
06-21-2008, 03:13 AM
There are several systems out there that use square footage and what mower you use to do it. It also factors in linear feet of edgeing and trimming. back when I ran a 1M+ company, we paid Tony Bass of Bass Custom Landscape out of Georgia for the weekend to teach us how to plug in all our costs into the "per sqaure foot" cost. it works, but it is alot easier to just go and look and shoot from the hip. but the reality is the same size lawn in the same neighborhood can take twice as long if the kids leave toys in the yard and the adults leave hoses out each week. so who knows?

topsites
06-21-2008, 07:00 AM
For those of you who dont beleive in formulae, what do you do? GUESS? or give people you like better prices and people you dont like worse prices? All that does is make sure you aren't making a profit on one lawn and making too much on another.

Oh no it gets way worse than that, bidding thusly affects the quality of your customer base.
If you're not bidding it right then don't expect much, my attitude.
That much I did learn, thou bidding is just one part of it.

TPendagast
06-21-2008, 07:08 PM
There are several systems out there that use square footage and what mower you use to do it. It also factors in linear feet of edgeing and trimming. back when I ran a 1M+ company, we paid Tony Bass of Bass Custom Landscape out of Georgia for the weekend to teach us how to plug in all our costs into the "per sqaure foot" cost. it works, but it is alot easier to just go and look and shoot from the hip. but the reality is the same size lawn in the same neighborhood can take twice as long if the kids leave toys in the yard and the adults leave hoses out each week. so who knows?

Yea, but when you look at the lawn the toys and hoses may not be out.

I usually include a contract clause to the effect of "excessive lawn debris, hoses, furniture, toys or animal feces will result in an additional $8 per hose,toy or peice of furniture moved in order to complete weekly service, Animal feces is charged at $20 per mower for cleaning and bio hazzard disposal."

USUALLY after reading that, most people pick up their junk.
If it's one hose or a lawn chair I dont freak out an charge them.
But I did charge one person a few years back $64 of extras on a $35 lawn cut because they had stuff everywhere.
It didnt happen again after they got the bill with attached pictures.
The idea is not to make a bundle off moving furniture but rather to discourage slobs.
I've also canceled customers for having to much crap in the the lawn.

Question: how do you 'sign' someone up over the phone?

Too many people here trying to quote and do estimates over the phone.
There is no easy button you got to go out and look an the property and then give the customer a written contract and price which 99 percent of the time requires two trips to a property before any work happens (the estimate, and then the contract signing.)

I have a printer in my truck, sometimes If its quick I prinit it out for them right there.

But there is no phone interview,quote and 'sign up'. Phone convos aren't submissible for collections of unpaid bills.

cgll1135
06-21-2008, 09:26 PM
To develop some level of consistency I felt like I needed to come up with a standard.
What I do is when I get a request to quote I get their address and go to the county appraisal records. I take their lot sqft subtract it from the house sqft.
I take that number and mulitply it by .oo4. That is how I get my price. If the lot has alot of difficult areas to mow then I round up. If not, then I leave the price as is. I have a minimum of $25 to keep from getting to low. I have been using it a while and seems to work good. So for the area I work it is mainly between 25-35 per lawn.

Lot sqft 12000 - House 2500= 9500 X's .004= $38/cut
What do you think.

This is interesting....how did you come up with this?