View Full Version : Creating a pricing process

09-04-2008, 12:21 PM
I am all over the map on my pricing and want to try to structure it in a way that I am consistent.

Here is what I am thinking

Labor Rate:
$450/day crew leader
$300/day crew member

$750 gross/day

for example if a lawn takes me an hour to unload truck, cut , trim and blow and reload truck - i would take my $750 gross divide by 7 hours and than multiply by the time

in this case monthly maintenance would be $428/month

Materials - marking up my cost by 50%

Rental equipment- aerators, slice seeders etc... marking up cost by 50%

09-04-2008, 04:30 PM
Good luck with those numbers....

that's $107.00 an hour for basic mowing...

Show me these lawns!

09-04-2008, 04:32 PM
any thoughts about what it should look like. how much a day do you try to gross

09-04-2008, 04:35 PM
I don't understand what your doing with the crew leader & crew member pay.... Pay them an hourly rate. Also, the general rule of thumb for mowing USED TO BE to price lawns at $60.00 an hour. (With a $30-35 minimum) One person should be able to gross $400 or so a day. Sometimes more or less. Two people, $650-700.

09-04-2008, 04:41 PM
I run a 2 person crew. myself crew leader and one crew memeber

I was thinking I want to make 450 per day and also bill out my crew memeber at a rate of 300

09-04-2008, 04:50 PM
Ahh.... that makes more sense. I thought you were going to pay your crew leader 450 daily, ect...

Yeah, that sounds like reasonable prices... looks good to me..

09-04-2008, 09:34 PM
What kind of lawns do you think you will get that will pay this much?

Its all good on paper but once you get in the real world its a lot harder. And if you really pay your crew member 42 dollars an hour, sign me up.

09-05-2008, 12:47 AM
What he's saying makes sense, he wants to be able to bill out $300 for the work that his helper would do for the day, not pay them that much. Seems on target to me, although there are some days and parts of my route that I average way above those numbers.

09-05-2008, 08:45 AM
what I have realized thru this exercise is that my break even amount per day is 268. dollars. 6 days a week for 8 months. covers all of my overhead for 12 months.

I didn't include snow plowing in this amount, but gas, maintencae insurance and truck is.

09-05-2008, 01:26 PM
Good luck with those numbers....

that's $107.00 an hour for basic mowing...

Show me these lawns!

That is $107 per hour for 2 people. $53.5 gross per man hour. You don't make that much? Are you pushing a Wal-Mart mower out of the back of your Geo Metro?

09-05-2008, 01:29 PM
I am open to suggestions

2006 f350
1999 chevy dually
2 scag mowers

09-05-2008, 02:29 PM
Rsails, I want to commend you on putting some thought into this, your pricing structure looks like a reasonable formula, if you are proficient in estimating time and materials required for jobs.

Keep in mind that there are two different types of expenses:
Fixed expenses - Expenses that will be the same each month no matter how much you work - such as licensing, ins, truck/equipment payments, etc. These expenses (if figure as an hourly expense) will go down as you work more hours (and vice-versa) example - If insurance cost $100 per month and you work 10 hours, then insurance cost you $10 per hour. If you work 100hrs then insurance would cost you $1 per hr.

Variable expense (cost of operation) - This is what it cost you to run day to day operations. Things included here are Fuel/maint. of trucks/equipment, payroll, materials etc. These expenses are determined by the number of hours worked or the number of hours that piece of equipment is operated. So if fuel and maint. on a mower costs $10 per hour and you run for 10 hours or 100 hours, the cost is still $10 per hr.

Keep these things in mind when you are doing your pricing. What I have done is figure my yearly fixed expenses and divided by 26 (the amount of weeks that i mow) Example would be if my yearly fixed expenses were $10k; then 10k/26=$384.62 per week throughout mowing season.

Then I figure what I make on avg. for each property (gross - hourly cost of operation) example - if property A is charged $60 takes 60 min to complete, if my operating expenses are $10 per hour then I have $50 gross minus hrly. cost of operation. I then take the avg. of these accounts and assign the income from however many hours are needed to cover fixed expenses. So if I avg. $45 an hour after my hrly costs then I would need approximately 384.62/45=8.55hrs per week to cover my fixed expenses.

This way all of my expenses are covered by scheduled mowing accounts. Anything other services in outside of this can be priced solely on cost of materials and hourly cost of operation, i.e. if I aerate a lawn, it takes 1hr to complete, the hrly costs are $12hr rental (I always charge the customer for equipment @ rental cost + 10% whether it is my equipment or rented) plus $4 fuel = $16per hour. So in this case I could take $16+$45 (my avg per hr. above, you could make this whatever you would like to make per hour on the job) and charge the customer $61, knowing that I will profit $45 from the job.

****The #'s used are just examples used for clarification, and do not in any way shape or for reflect the costs or income of my business, nor are they suggested numbers for anyone else's business.****