Mowing pricing formula

[LAWNGODFATHER]

How can we come up with a good formula for mowing estimates?

[65hoss]

1st off it is a must you know your costs! Without knowing cost you are shooting in the dark.
Several different ways to figure cost, on an hourly scale, a per stop scale or sf scale.

I prefer the per stop scale, you can get more accurate.

[LAWNGODFATHER]

What does that mean per a stop, is that like a time thing.

[65hoss]

not exactly. Figuring out your cost everytime you drop the trailer. This helps keep drive time from being as big an issue.

[LAWNGODFATHER]

Ok I've heard $1 per 1000 sq/ft

$2 per a 1000 sq/ft

What about if i used .0015 x the sq/ft?

That's $1.50 per 1000 sq/ft

How do you calculate the trimming in? I don't want to use liner.

[65hoss]

I wish I could find some getting $1 per 1k. I will sub out my entire route to them.

10k lawn cut for $10. That would be great!

If I remember correctly kutnkru does his by the sf and linear ft.

[LAWNGODFATHER]

LMAO me too.

I think they must have a set minimum.

$30 to drop the gate and so on.

[fshrdan]

Is this a public service message? It sounds very rehearsed, like an AM radio commercial or something. Just wondering...

[Atlantic Lawn]

I do have a $25 minimum. Other than that it's really not been a sq ft formula sorta thing around here. I guess it could be in big developments with the same size yards over and over.

[HBFOXJr]

Anything purchased by time, like employees, must be sold by time even if bundled into a fixed price for the consumer. You can develop formulas but they must have their origon in time and another unit of measure like sq ft, lin ft, etc.

This means if you don't measure time, area, volume, count pieces etc. you must begin to do so.

I kept records years ago of mow time (trim, edge, blow inclusive)and size. I put the info into a spreadsheet and began to sort and resort the info based on time per thousand or groups of sizes etc. I looked for production numbers with similarties in min/K of area. I also gave them a subjective difficulty rating and sorted them. Eventually I came up with numbers I could use for bidding other similar jobs.

Today it could be more simple. I'm not confident that what I did was the best and it was not the easiest. I only cut grass one day a week now with a 2 man crew. A 60" Z is our primary machine. I think that if you know how much time it will take to mow the site with your primary machine, add in a 2nd guy for trim, edge and blow for the same time you have a beginning.

If you are heavy on trim, edge and blow and light on mow use the greater time as an estimate. Remember this is a rough scheme still subject to job variances.

Of course all of this still only gets you estimated time. You must know your per hour costs of providing service. And don't forget about the dead time like drive time and prep time (morning load, grease, blade change etc.) that must be calculated in. If you know your per hr costs all day long you can calculate the daily cost and divide by the number working hr to know what you must get per on the job hr.

I did a wee bit differnet figuring if we worked 9 hr, 1 hr was spent in maint of equipment and other misc duties and 8 were working including driving. If costs are a ficticious $81/day or 9 $/hr then the 8 working hr are $10/hr.

I add a stop charge of x amount of time to each job's production time to account for all my hrs.

In irrigation I charge a price equal to .5 hr work just to come to the door. This covers truck stocking time, go over the work order with the tech time and drive time. If I pay the man for 9 hr I want the equivalent of 9 hr of billable time one way or another. So if he has 5 stops for the day he picks up 2.5 hr in svc calls adn I want to see 6.5 hr of billable hr.

[jeffex]

I agree that when mowing we are selling time. Lawn maintenance has a relatively fixed cost for equipment. I assign a $5 per hr cost for equipment. It includes replacement cost, fuel,parts and maintenance, and insurance. I'm sure everyone has thier own figures but this has worked for me. Then I take a figure of $30 per man hr and add the $5 equipment cost an apply it to the etimate of time. The art is in the estimating. There are times when I can bid high to increase profit but this is a baseline formula that fits my goals in the market I work.

[Robert Ewald]

This seems to be the most frustrating part of this industry. Trying to figure out what to charege for the service we provide the most. My favorite way to estimate was when I was fifteen , look at a yard and think ( hum how much can I charge and get away with it ) wow was I ever surprised some times when it was hot out and the little old lady would stop me and ask how much for a cut and I would tell her 30-35 bucks and she would be happy. Sorry for all this run on just remembering the easier days.

Thanks :)

[walker-talker]

LOL, sounds like an infomercial. But wait, there's more. Act now and you can get this free juicer!!!

MATT

[_GUNNER_8]

I went to a seminar couple years back and speaker said that a company needs to range somewere around $1 a minute,now we don't pull that in on every account,but most we do there are so many factors that go into est. If we pull up to account that were using to ztr 60inch cuts than i don't go with that formula,i charge $40 to $45 per machine so if it takes hour and half $120 to $130.If i pull up and that it will take 30 min to mow trim and blow and we just using 1 machine on grounds than i go for $1 a minute which would be $30.We have a min. of $30 if it just takes 15 min. than its still $30.There was this fellow in town few years back that got in with a sweeper company being subcontactor and sweeper company was only company in town doing sweeping so he had almost every big contract in area malls,wal-mart,k-mart,high school which had 75acreas of turf and many more accounts and he charged flatt rate of $45 hour didnt matter if he had 3 mowers on ground at 1 time he thought he was making killing and at 1st glance it looks like it but when mowers go out of warrenty and u trying to fix 3 mowers and dealer charges $45 hour ur screwed and not counting personal bills, insureance, taxes,and many more exspences it didnt take long for him to file chapter 11.

[HBFOXJr]

buckaminute

What kind of minute is that? Is that one man for one minute, one crew for 1 minute, one mower for 1 minute???

[_GUNNER_8]

Originally posted by HBFOXJr
buckaminute

What kind of minute is that? Is that one man for one minute, one crew for 1 minute, one mower for 1 minute???


HB,
that was pretty easy to understand. If i have account were im giving est. on and it calls for 1 mower and and 1 trimmer or 2 trimmers ill shoot for $1 a minute if its going take 2 guys 45min then it will be $45 but i will not go out and mow account that has 20 acres of turf for flat rate of $45hour or $60 hour for that matter because now u got 3 machines involved and ur rate suck and wont take long to go under ive seen quite a few guys over years do that,but anyways if i got 2 machines on account then im trying to get $40 to $45 per machine and that puts that crew at low side $80 hour to $90 and its worked quite well over last 3 years or so.BUT however route u go Im a firm believer that u need to be making at LEAST what shop rate to fix ur equipment which is $45 hour around here.

[HBFOXJr]

I was asking a question on buckaminute not giving an answer.

Why are you making $30/hr on one job and $45/hr on another. Who gives a rat butt about how many machines. It is people your putting to work and the machines come along for the ride.

If you get $45 for 2 men for 45 min you are $30/hr. If you go to a big job and rate it at $45/man hr where does the difference come from?

This is the problem is this site with 88% of the members. They don't know the difference between a man hour and a crew hour.

[mowerman90]

After reading everyones replies, my head is spinning. I think that when in doubt, I'll just overcharge! LOL

[LAWNGODFATHER]

Originally posted by HBFOXJr
This is the problem is this site with 88% of the members. They don't know the difference between a man hour and a crew hour.

Man hour = 1 person on the job

Crew hour = Amount of employees in the crew X 1 man hour.

[eslawns]

I used a guesstimate method until my third year. Then I decided to take measurements of every lawn and compare them, first with each other, second with the money made on each.

I measured the sq. ft. of lawn, and the lin. ft. of trimming and edging. I made notes about what mower gets used on what part, gates, how many trees and beds, things like that. For about 3 months, I kept track of how long it took for each part of each job (Yes, this is a PITA!!)

Once I had some hard data, I could decide how long it took to mow X sq. ft. with each mower I have, and the same thing for trimming and edging. I didn't come up with a good way to guess about the blowing, so I just factor in 5 minutes for every 500 lin. ft. of edging.

Now I use a spreadsheet with all the constants saved, so all I do is put in the specifics from that job. I factor in efficiency if there are a lot of trees and obstacles.

Hope this helps...

[David Haggerty]

Originally posted by jeffex
I agree that when mowing we are selling time. Lawn maintenance has a relatively fixed cost for equipment. I assign a $5 per hr cost for equipment. It includes replacement cost, fuel,parts and maintenance, and insurance. I'm sure everyone has thier own figures but this has worked for me. Then I take a figure of $30 per man hr and add the $5 equipment cost an apply it to the etimate of time. The art is in the estimating. There are times when I can bid high to increase profit but this is a baseline formula that fits my goals in the market I work.

It could use refinement.

You have too much other cost just rolled into the labor cost.

$5 is about right for equipment cost "per two feet of deck width'. So a 21" mower costs $4.37/hr. a 36" WB is $7.50/hr. etc.

This makes it easier to see the advantage of the productivity of a ZTR or something bigger.
The cost of labor does not expand with an increase in mower size and speed.

Larger mowers allow me to make more profit than most solo LCOs'.

Dave

[awm]

for this small solo operator it is really about knowing what i have to charge for a particular job. that comes w time.
today i did a limbing around an outbuilding, and blew the roof off. ill be repairing it later. charged her 35 dollars.40 min
then went to a job where the lady wanted her yd edge moved
about 8 ft further back. took 21/2 hrs an charged 110.
im getting better at charging the right price. i made money
she was tickled. thats the goal.

[kutnkru]

Yes I have mentioned $1/m sf. But I have also listed prices on here for mowing that equate to $7/m sf too.

LGF is correct that you need to have a base minimum. This is so that that Im not laboring Hoss' 10m/sf properties for $10 and he pockets $35 after billing - LOL!!!

I have read and re-read many of HBs posts and he has given much more valuable insight to the biz aspect than I have on here. For any whom may scoff at him (not pointing any fingers), they just might want to reconsider their egotistical positions - just some friendly advice!!!

HB ...

Correct me if Im wrong, but are you not referring to what would be considered a Crews Average Wage - be this a one man operation or multiple crews???

You would figure the Labor Burden or OverHead (incl taxes, comp., etc.) say 40% hypothetically. Then you add the salaries of your force together: $12 + $10 + $8 = $30 / 3 = $10 (CAW)

Take your CAW x 40% = $4/hr + $10 = $14/hr labor costs. Then if you had a 2 hr job you would bid $84. If you had an 8 hr job you would bid $336, thus remaining constant.

Am I following you correctly??? Or have I gotten so far off the beaten path that Im playing left fielder during the Super Bowl???

[LAWNGODFATHER]

Kris don't you mean your on the field with your croquet uniform on.

Nevermind,LOL

You got a little indepth there but, crew charge is as follows, if you have 3 guys in the truck you must charge for 3 man hours per the crew, not thinking that it's a 1 hour job, but as a 3 man hour job.

A 15 min job is a 45 min job

Your hourly rate times how many eployees in the crew.

So if we used your $42 per a man hour you mentioned, and they were at a job for 3 hours then you have 9 man hours at $42 = $378

[kutnkru]

Originally posted by Mike B
...if you have 3 guys in the truck you must charge for 3 man hours per the crew, not thinking that it's a 1 hour job, but as a 3 man hour job. ...Croquet -BAHH Ha Ha Ha!!! Thats a good one :rolleyes:

I understand that you multiply by man hours. Thats not my question. If you follow the math you will see that I have done this above.

I was referring to how you find what your costs are to see if Im figuring them correctly or not by what he was saying. Croquet - thats still a good one! LOL

[HBFOXJr]

Grasshopper, you've been to school and learned your lessons well.

Now lets tackle the equipment cost things for these guys. Where the heck did deck width do something with equipment costs. I know some guys are right on with the $5/man hr for equipment costs. But I'm not talking one mower, I'm talking truck, trailer, mowers trimmers, fuel, insurance, repairs etc.

My equipment costs for my company per working man hour I put on the payroll, are approximately $5/man hr. A 3 man crew is $15/crew hr x 9 hr workday is $135/day for a 3 man crew.

My labor burden for 2001 was 40%. That included employer payroll taxes insurances like liability which is based on payroll, health insurance, help wanted advertising and and uniforms.

[HBFOXJr]

Explain what you meant by "too much other cost rolled into the labor cost".

[Lawns & More]

In my part of Texas, I charge by the hour which is $40.00 an hour. I usually can eye the yard and see how long it will take. Normally most residential yards are about an hour worth of work, "one guy". If there is more edging or trimming to be done, the price goes up. 1 1/2 hours would be $60.00.
Now the big guy around here he charges $60.00 an hour "per man". Three workers for one hour would be $180.00. If it took them 30 minutes it would be $90.00. They start the clock the second they pull up to the house or business. This usually includes mowing, edging, weed eating, blowing off grass and weeding flower beds if they have them.
This guy pays his employees $9-10 an hour.
Now I had a time that I didn't have time to fit in another yard, for example a lady was begging for me to do her yard, I finally said $150.00 to cut,edge and weed eat. She said do it! Job took 45 minutes.
I think its better to over bid a job a little, you can always go down on the amount if they say no.

[LAWNGODFATHER]

Originally posted by Kris White be the kutnkru
Croquet -BAHH Ha Ha Ha!!! Thats a good one :rolleyes:

I understand that you multiply by man hours. Thats not my question. If you follow the math you will see that I have done this above.

I was referring to how you find what your costs are to see if Im figuring them correctly or not by what he was saying. Croquet - thats still a good one! LOL

You be the man Kris, I just use 25% on top of their regular pay.

Before I was just drilling in some ones head that crew hours are not the same as man hours. Unless it's a completily solo operation.

[David Haggerty]

Originally posted by HBFOXJr
Explain what you meant by "too much other cost rolled into the labor cost".

Most of the expense burden does belong to labor, ie:non productive hours like drivetime etc. Just not all of it.
Billing by the hour for equipment and labor, the equipment should reflect it's fair share of "the cost of doing business". Not just expenses directly related to the mower.

But I see you simplify equipment costs even further by generalizing all equipment and then charging wheather it's operating or not.

I couldn't do that. Equipment costs are figured from the hour meter. It rides on the trailer for free. If it's not running, it's not wearing out.

I wouldn't have any customers left if I just rolled all my equipment expenses together and billed it all to the customer.
My equipment is just too costly. Plus it would deny me the smaller accounts. The 580 doesn't run 50 hours per week, though it'd be nice.

It's kind of the way backhoe operators bill. Although they will actually bill by the hour. I just use hourly calculations for the estimate, and bill by the job.

Does this clear it up any?

Dave

[KirbysLawn]

http://www.math.princeton.edu/jfnj/texts_and_graphics/LOGIC/talk.CMU/TRANSPARENCIES/axioms.jpg

[LAWNGODFATHER]

So Ray after you get done using all that calculas, does it get right on for the hourly charge that you require to operate?

[HBFOXJr]

GFather, what items do you use to make up the 25% labor burden?

Haggerty, your eq costs are another way of getting the job done. It's like this. You can avg your usage over a day for low money or charge more per hr for the hour used.

With my mow equipment I just averaged the cost. I figured how much per tear to pay for and run the stuff and divided that by the days used per year and then the hours per day.

Higher valued equipment like a trancher/backhoe or front end loader I have day rate just like the rental yards. I add that inot my bids.

Everyone - How are you guys using these hourly rates. On the job hours or total payroll hours for the day?

If you are billing/bidding on the job hours, what % are they of the total day worked?

[jeffex]

keep in mind the thread was MOWING formula for pricing. Residential pricing is easy but figuring time on complex commercial properties needs a formula. I met a guy and his wife who bid on homeowners associations and they used a measuring wheel. They added up linear footage to be edged and measured out odd shaped areas to be mowed. They also measured linear footage to be blown off. They never told me the factors they applied to thier numbers but they said it was easy to come up with. They simply measured the properties they already did to see how many man hrs it took to edge the properties they did and came up with an average ft/hrof edging, acre/hr mowing, ft/hr trimming, and ft/hr blowing.
They said they never got burned on bidding and it was worth the time to develope. I also ave a pressure washing business and It took me a long time to figure out bidding on jobs but in the end I priced per sq. ft. and never went wrong.

[bobbygedd]

and u must be competitive! nothing like making something real simple into something complicated. if your costs force u to charge $90 per hour then guess what, u r out of business.

[Fantasy Lawns]

jeffex --- that's how we do it .... smaller jobs ... after the years you can just look at for how much ....

but with this type of system on larger jobs (we take time samples .....not under pressure of the clock .... spring .... early summer ....late summer .... n fall ... to get a nice average time for any normal maintenance task ...measure early -mid- late day)

this is for mowing (have to have #'s for all deck sizes), edging, weed whacking, blowing, weeding, pruning, hedging etc. ….using an excel spreadsheet .... with direct-indirect-overhead cost figured separated but involved with the # crunching

this may seem tedious ....but once you have the number sample ...bidding is quick n efficient .....any foreman can do it ..... after all it's based on your own crew productivity .....I've used this system in the past with results that PAY ..... I just bid on a job +600k sq ft which after looking at for any special needs .... related to difficulty of mowing n had a bid together in just a few hours ....n I know the numbers are good for OUR business

[LAWNGODFATHER]

25% = 12.5 % matching payroll taxes, unemployement ins, 12.5% workmens comp.

Although just mowing requires only 5.5% we use the 12.5 % number for all payroll and it's comes in as charged back to the LCO money on what is payroll taxes for mowing. Also helps for unforseen fudge factors, as wet/tall grass.

Landscaping requires the 12.5% workmens comp. ins. number.

As you can see, I run seprate payroll for landscaping, or any payroll that has the higher percentages.

If a guy mows, and does some scaping he will get 2 seprate checks.

Keep your mowing seprate from landscaping, workmens comp. is much cheaper for mowing only.


And the employees work about 90% of the time on the clock.

[HBFOXJr]

Where do you account for Liability ins, Umbrella pkg, uniforms, health ins, help wanted advertising?

[LAWNGODFATHER]

That's just the the total labor cost.

Didn't you ask what that 25% on top of the hourly wages were?

That's whatever wage they think they make plus 25% for labor taxes and workmens comp.

No health ins.

I'm giving you numbers my accountant tells me to use.

[David Haggerty]

Originally posted by bobbygedd
and u must be competitive! nothing like making something real simple into something complicated. if your costs force u to charge $90 per hour then guess what, u r out of business.

Not necessarily true if you're PRODUCTIVE enough.

Dave

[HBFOXJr]

There is a difference between total payroll costs and total labor costs.

The items I was questioning are also labor costs in my book and are a component of my labor burden.

My question to you is, where in your accounting, bidding or what ever or under what expense category are these items tracked?

In addition to where and how ae the accounted for, how or where are their costs recovered?

[LAWNGODFATHER]

All my advertising fall under 1 catagory, including help wanted ads. ($60 a year)

None of the rest fall in the same catagory as labor, unless the CPA does it him self. I send it to him as cost of doing BIZ.


Total auto

Total ins expences

Total payroll expences

Total rent expences

Total repair

Supplies

Taxes

Phones

Uncategorized expences

Some are broken down more in those catagories, and there are a few more but got tired of copying them

QB pro

[prestigelawn01]

This may be a bad formula, any input would be great. We figure our ovrehead, how much we need an hour to pay our bills and make a profit. Plus keep in mind what the local market will hold. Lets say you need to make $50 an hour. You divide 50 by 60 because of 60min in an hour. That will give you how much per min..=.83
When you go to a lawn you have to figure how long you will be onsite to perfrom your duties, plus your drive time. Lets say you come up with 40min. You then say 40x.83= $33.50 per visit..
If this makes no sence please let me know.. I do not want to go broke because I'm ignorant to the fact.. Thanks

[topsites]

The guys mentioning cost are right, you have to figure out how much it is costing you (include everything, labor too), then you have yourself the bottom line (i.e.: the absolute least you would even consider it for) so you can add about 10% profit to that figure.

Dollars per 1k square feet is absolute nonsense unless all your lots will be the same size, which in turn would eliminate the need for the method.
The thing is, assume I get:
1) $35 for a 1/4 acre lot and it goes up by $5 per +1/8th as such...
2) $40 for 5/8th's, and
3) $45 for 1/2 acre (etc...)
That's 10,890 square feet in a 1/4 acre, so 35 / 11k = $3.18 / ksq.ft.
But 21,780 sq.ft. per 1/2 acre, so $45 / 21.8k = $2.064 / ksq.ft.

See what I mean, and it gets worse once you get into acre+ lots...
If one acre goes for $60, then you have $60 / 43.6k = $1.38 / ksq.ft.

So $ / sq.ft. may be a useful side figure some folks use to average things out, and while some customers may use the figure it is only because THEIR lot size never changes, but for myself this figure comes in as handy for estimating as holding back water with a sieve.

While $ / pmh (per man hour) is a good indicator, one has to remember fair market value: If an acre lot goes for $60, then $60 it costs whether it takes 15 minutes with a HUGE Wide-area-mower, or 3 days with a push reel mower... You can't just charge $600 because it takes you 3 days, is what I'm saying... And so long someone can do it faster, we'll never get out of arguing as to who can do it the cheapest, but faster machines also cost more:

Hence, it boils down to your cost (roughly: equipment + labor + taxes) + 10% profit.
Included in the cost of equipment comes parts and replacement.
While the cost of labor must cover maintenance as well.
No doubt windshield time tends to be forgotten, but you have to get paid something for driving as well.
et.al.

[Stillwater]

Their is no formula, but it all starts with you and your expences, put all this info together and be absolutely honest with yourself you need this info before you can cost out a lawn. truck, morguage, taxes, health insurence, liability, insurence, excise, taxes, property taxes, payments, food, workmans comp GAS,income tax state incometax. equipment maint cost. and Business reserve,office supplies, new equipment fund. payroll. and medical insurence for the famiely, if you dont have your info you can't figure a charge.