Lowballer Strikes Again

[Spence]

You can sure tell that the economy is in bad condition. Several guys I know in the area have lost accounts by people coming in and offering to do the same service for almost half the price. Today, I got a taste of it myself. I called up one of my customers that just pays me per cut to make sure that everything was still on go to start back up in about a month. She told me that she had decided to go with someone else this year because they would do it cheaper. This yard is 3/4 of an acre and I was cutting it for $40 a cut, which is a good price. The other guy said he would do it for $25 a cut. Give me a break. She said that I could still do it if I would match his price. Yeah, right. I told her no thanks. I don't think people realize that it hurts everybody when they lowball jobs like that. How do they expect for them, or anybody else, to be able to make a living with prices like that? It drives me crazy.

[George777]

I had it happen to me last week. Lady calls and said," did you mail me my invoice?" Yes mam it is in the mail. " I got an estimate the other day for 45.oo and I think I'm going to go with them". My rate was 65.00 per cut. I told her no problem just make sure he is lisenced so that he don't sue ya if he cuts his foot off. I know he will not make a profit at 45.00 but oh well. She'll call back and the price will be 70.00 per cut if she wants me to do it.

[parkwest]

Beat this:

Lost a $9800.00/season contract to a college kid who bid $2300.

I bid using 60" lazer, 48" lazer hp and 36" metro for berms. You guessed it. The kid had a 21" trim mower.

Property manager said he told doctor it wasn't a legit bid but the doctor said to hire the kid because the doc thought it would be nice to help the kid thru school. Yea right.

Funny part is my crews reported every time they went by the kid was out there mowing. No matter what day of the week. Evidently this was his only mowing job.

[odin]

Lot of guys around here are doing 40 dollar jobs for 15 bucks with 21in mowers and a lot people hire them because they like the small mowers on the lawn i have no idea why but they do.Most of these guys are part timers but their ranks are growing.
I seen a lot of people with lawn mowers stuffed in the back end of cars this past season stop near job sites pick the mower up out of the car and start mowing several lawns.
And these homes were in an exclusive neighborhood have no idea what they got but these homes were in an elite neighborhood .
The head honcho at the ford plant here in chicago hts lives there and some more corporate big wigs.Lost a good account of gas stations to some of these guys and it was of nice account.Have no idea if they were insured but these stations were a big company.They required it with us so i guess they were. They counldnt have made much money at the price they got.
Of couse it's a free country they want to work their ass of for the price of a couple cases of beer more power to em they useally dont last to long anyway.But damm it seems that when one quits one's there to take his place.

[MuskTurfKing]

The way I see it, if a customer is such a tight wad that they'll cut you off just to save a few bucks and get crappier service, let em have it, they'll come crawling back and then charge them more. What goes around comes around.

Hank

[RB]

I'm afraid this is the future of our business. There will always be a guy with a 21" mower out there making extra $. The only thing we can do is educate of customers and remind them how professional companies benefit them. And more importantly, be there when that scrub that took your lawn screws up.

A little off the subject -- be we also have to honestly ask ourselves how much lawn maintenance is really worth. I think that somehow we have gotten to a point where we think we are more important than we really are in this business. Don't get me wrong what we do is hard work and not everyone can do it. Does that consitute making $100/hr.? I don't think so.

Personally, I have no problem undercutting a contractor that is overcharging a customer. If a contractor is charging a customer $50 for 20 minutes work he is overcharging his customer. I believe the contractor who overcharges their customers does more harm than the scrub.

[JML]

i went from charging a very fair price this year to being a low baller myself, I can admit it.. In my area there is no educating customers and they don't care if you have insurance, workmans comp, pay taxes, etc.. Believe it or not I am making more money and less aggravation since my prices have come down.. People are happier with the lower prices and don't complain anymore about the littlest thing which helps a lot because we don't get anymore phone calls about leaving a grass clipping on my porch. Our crews are doing more volume now and making more money than when were charging a premium dollar. I added it up and by cutting prices I am only losing anywhere from $50 to $100 per day per crew from what I was charging before.. But by being cheaper on some lawns, we don't have to pay as much details as to others so we can get to the next lawn faster, and cut more lawns a day.. It all balanced each other out.. I know some of you guys probably aren't liking what I am saying but I got tired of losing work, dealing with customers on the littlest things, and everything else.....

[parkwest]

Originally posted by odin00
Lot of guys around here are doing 40 dollar jobs for 15 bucks with 21in mowers and a lot people hire them because they like the small mowers on the lawn i have no idea why but they do.

The reason I mentioned mower sizes was for you to note the difference in mower production rates. ie. 60" lazer vs. 21" MTD To show how ridiculous the kid's price was.

[odin]

PARKWEST

I agree partner i didnt mention 21in mowers on a account of your post i was just bringing up my delimma these guys aint even towing a trailor around
We carry a 60 in dixie on one trailor and lazer48 hp on the other and a couple walkbehinds and no way we can do it at these guys prices and then divide the profits between the 4 of us.

[mowerguy]

I agree with RB. I will undercut companies charging $50 for a half hour. Maybe because it is just me and my brother we can aford to do this. we try to make between 35 and 45 dollars a man hour. We feel this is fair and we do a very high end job. we have 30 customers and our repeat business is over 90%. we get yards next to our clients because of the quality we put into our work. which is great because that eliminates transportation time between yard. We only have 30 clients because that is all we have time to handle working around our school schedules.

I would also like to say that not all college students are hurting the industry. I'm 20 and my brother is 14. This year will be my sixth year in business and we buy all of our equipment from the capital we make. Our parents have nothing to do with our business. We carry insurace too. this is not directed at anyone but just i jsut wanted to put an fyi out there on my behaf

[odin]

Mowerguy

I dont begrude you earning your way though school you seem to be doing business proper and have insurance and that fine.
We live in whats called capitolism and if you can beat my price thats tough luck for me that's just the way it is.
But a lot a guys here make their todal liveing doing this work and have to buy not only business insurance but high cost health to.
So you can see how they would be defensive when they get undercut by other collage guys doing the job for less than a fourth of what they were getting.
These guys are supporting wives and kidds and that makes a big difference.

[kutnkru]

Originally posted by RB
... I think that somehow we have gotten to a point where we think we are more important than we really are in this business. Don't get me wrong what we do is hard work and not everyone can do it. Does that constitute making $100/hr.? ...I dont think that those who have been in this biz a long time are charging that much more than what their worth according to their operations needs.

The real crux of the matter is this. There are necessities and luxuries in life. The lawn guy is a luxury; the computer geek is a necessity.

Thats why people will spend $150/hr to get their puter running by some college or has kid without blinking an eye because Heaven forbid they cant chat on-line or get THAT PRECIOUS E-MAIL -LOL!!!

Have one of us bust our neck and cripple our backs all day to get their property looking pristine and have the audacity to charge them more that $20/hr and watch the sparks fly!!!

Im not bashing any of you whom are tech’s too, but dont you think that hard physical labor should get more compensation than a technician who doesnt break a sweat??? I sure do. ;)

[MuskTurfKing]

I understand your theory mowerguy, but if the market in your area is that high, why not charge that much and have the potential for less work and make the same amount of money?
Example.

Rate of your competitors - $60 an hour

Your rate (I'm just making up a number, nothing related to you, or demeaning you) - $30 an hour.

You have to work TWICE as much as your competitors just to make what their making...why work more to make the same when you can work less and make the same, heck if you want to be cheaper, than charge $5-10 less than them, you still make more.

Hank

[MuskTurfKing]

My point exactly kutnkru, we run a business, we are able to charge whatever the heck you want, with this industry, you have a lot of freedom of what you want to do, personally when I'm out of college I want to dabble in a few things, I'd like to devote a couple days for mowing, a day or so for fert and whatnot, and the rest for arborist work, I plan on being higher priced because my work will be better than the competitors, and I'll have accounts that I want, not whatever I can take.

Hank

[LAWNGODFATHER]

Start getting them to sign long term contracts.

[65hoss]

I don't disagree with you guys.

Makes me think of my newest pet peeve. Think I'll start a new thread.

[scott's turf]

Kutnkru, these so called computer geeks are what runs this site and many other things that I am sure you take advantage of in this world. Many have paid their dues through college loans and are now trying to recover that expense. We will always have scrubs in this line of work that will under cut us because nearly anyone can cut a lawn. Yes, we cut better than others but some people don't care. They just want there lawn cut. In an industry where the complexity is low you are bound to find many part timers trying to earn a buck, essecially when the economy is hurting. Someone loses their job and has some lawn equipment so they decide to mow a couple of lawns. You want see to much of that with sprinkler systems or landscape design though. This will continue to happen unless someday all mowers triple in cost, insurance is manditory, or you need an education to cut.

[Turfer]

I'm right up the street from you in Cary. There are lots of new guys riding around. There is one new guy with a trailer full of Home Depot stuff putting estimates in all the mail boxes in Lochmere for $24 per cut regardless if it is a 1/4 acre or a big house on the lake. I haven't lost any business yet but it's still early. I will not change my prices in response to these guys. I hope I will get some of these accounts later in the spring after these guys have had a chance to mess up a few yards.

[LAWNS AND MOWER]

Good point, Turfer. I consider scrubs an opportunity. Let them butcher up yards and then these potential customers will call you understanding the expression" you get what you pay for". If one of my customers drop me for a scrub and then want me back, now that's a different story. I might take them back if I like the yard and/or the customer.

LAWNS AND MOWER

[Lech615]

I am not defending the scrubs, but every time you talk about someone lowballing you, you consider them a scrub. Maybe these guys are just going to do a great job for less money. Maybe they didn't invest in a $10,000 machine instead they will use a $3,000 walk behind that will take them a little longer but they make it up by having less overhead. I don't know, I was drining around my area recently targeting certain subdivisions and I found some that had over 100 homes. This got me to thinkink that normally I would charge 30-35$ for these homes, but why not offer them $28 for the service and hope to get five to ten in the area. Lets face it 5-10 in a one area at $28 is better than 5-10 in 5-10 different areas at $30-35. Maybe I am wrong, but I will have to see for myself.

[BobbyBcuttin]

I see and hear everyone talking about charging xxx number of dollers a hour is this a number that you pulled off the top of your heads or is this a number that you have to charge to make a profit. My point is after all things included.equip,ins,fuel,maint,truck,trailer,windsheild time,office time,phone,elec,if i only charged 25 dollers a hour i could make more money at BK. How many people actulley know what it cost them a hour to operate.i'm still working on the figures but i bet a lot of guy's don't have any ideal what it really cost them.Buy my figures so far if i'm only making 30 dollers a hour i might as well drive to 1 house a hour and give them a doller or 2 and not even do their yard because if that's all i,m making i'm loseing money!!!!!!

[parkwest]

BobbyBcuttin,

Did you read the thread on profit margins. Some of these guys claimed 100% profit because their equipment was paid for. It is so sad to think some of these guys are in college and tell you they run a legitimate business but couldn't tell you the difference between a balance sheet and an income statement.

[SLS]

100% profit margin???

Where are they getting the FREE equipment, gasoline, oil, and trimmer string?

Where are those insurance companies that offer FREE policies?

I want some too! :D

[parkwest]

Makes me sad to see someone make a price structure based on what the other guy is charging without breaking it down and find his net profit. Most guys I see in mowing would make more working at Jack in the Box per hour if they subtracted all expenses.

SLS, heres a few more basic expenses they ignore until they go out of business.

Rent
salaries and benefits
utilities
usage fees
depreciation
training
shipping
supplies
uniforms
subscriptions
association fees
licensing fees
equipment maintenence
taxes
debt service
ROI

Owners Benefits
salary
Life insurance
membership fees

As for the college kid earlier in this thread who undercut my price by $7500.00, I stopped and talked to him once. He said he couldn't believe he was going to make over two thousand dollars for just mowing the grass for the summer.

Lets see now $8/hr times 40 hours/week times 32 week mowing season = $10,240.00

And Jack in the box pays for all the equipment expenses and half your FICA.

[Heavenly Green]

I agree with all. I have taken the time this winter to break it all down heres what Ive come up with. I have to fill at least 40 billable hours per week at $75. 2man crew so thats $37.5per man hr. And $1.25 per min. The minimum I will sell any customer is 20min. per week or $25.per service visit. If its a half hr. lawn I would charge $37.5 x 28wk season=$1050. divide by 6mo.=$175per mo. But basicaly I have to fill at least 40hrs. a week at this rate to make 3000. a week x 28=$84,000. Only about 25,000. of that would be my pay for those 28wks but then we have add on services and 5mo snow contracts so Im looking to make about $45,000. for my pay the rest will go to overhead and growing my bussiness. Hope it all works. Good luck to everyone.

Steve@S&S Heavenly Green Lawns:D

[Twotoros]

It is not our fault for the state of the green industry. I blame the state goverments. They simply have to make it harder to remain in business without the proper licenses. For starters they can make it mandatory to show your license before an advertiser can publish any ads. All vehicles must display the license # on both sides and the rear and must be clearly visable. If anyone spots a service truck or car without it could be easily targeted for proper wrist slapping. I know what you are thinking, "Just more govt. red tape" but something has to be done. We all know these fairytale prices are produced by the fact that no tax is paid-state or federal. If we all voice our selves to the 'powers that be' maybe they might help. After all the feds and the states are hurting for $. Just think if every guy out there paid teir fair share. It all adds up. The guys that quit would mean more business for those that are legit so the governments win.
On a side note I think there might be sone crack down going on here. There was a fraud alert on TV where more than than one lawn/land biz was ripping folk off by planting rootless trees and such. And pre-charging for work and bailing. Also on the radio a story that 6 lawncare businesses were nabbed for not paying taxes. Maybe my complaints to the state last seasson paid off.

[MWS LAWN]

Steve,


Very good breakdown. I've been doing lawn service for 8 years now. In the begining it is very hard. So many of these younger guys in here must not know the breakdown of all there expencies. There are alot of factors to compute your overhead, but what burns me up is when I talk to someone and they tell me "well I can charge less than you because my equipment is paid for." That tells me this guy has very little experience. How is that equipment going to be replaced?? Well thats o.k. because after the equipment breaks down and there is no money to replace it I'll come behind him with some new equipment.LOL But anyway the national average for lawn maintenance is around 38.50 per hour.

[bobbygedd]

to voice my opinion on the question of , "is the computer geek worth more than the guy do physical labor". the answer is yes! there are two kinds of workers, skilled, and unskilled. the computer geek is considered skilled, the yard man, unskilled. ill give u an example. i work in the graphics field, i earn $26 an hour, more or less sitting on my butt and monitoring the machine and making adjustments to ensure quality. we have laborers, they bust their butts doing all the physical work, for $7 an hour. who is worth more? i am! if the laborer decides to quit, there will be another to replace him for the same $7 an hour. however, if i quit, replacing me will be more difficult, and much more expensive. NOW, dont get me wrong, i operatr my lawn service and see that working too cheap is counterproductive. i personally have raised maintenance fees by $150-$200 per customer this season, and ill probably lose 2 or 3. most have already signed and sent back thier contracts along with a check. as long as u make a living doing what anyone else can do, with no education or experience, your competition will be fierce. a few customers can be reasoned with when u explain the benefits of a "real" service , doing quality work and being licenced, dependable, etc. but, most people , when approached by someone offering them what they claim will be comparitive service at a 40-50% discount, will be very tempted. ok, ive gone on too long, later

[mike payne]

I lose an account to a 15 year old that would do it for five dollars less. The student ran over a soda can with his 21" mower an cut his leg very severly. The homeowner was sused becaused he was not 18 years old and could not legally operate power equipment. I got the account back and I raised her price five dollars due to increased cost for liability insurance that I carry. In all my advertisement I state that I am licensed and insured. I try to sell customers on the advantagies of using a professional company.

[_GUNNER_8]

Originally posted by Spence
You can sure tell that the economy is in bad condition. Several guys I know in the area have lost accounts by people coming in and offering to do the same service for almost half the price. Today, I got a taste of it myself. I called up one of my customers that just pays me per cut to make sure that everything was still on go to start back up in about a month. She told me that she had decided to go with someone else this year because they would do it cheaper. This yard is 3/4 of an acre and I was cutting it for $40 a cut, which is a good price. The other guy said he would do it for $25 a cut. Give me a break. She said that I could still do it if I would match his price. Yeah, right. I told her no thanks. I don't think people realize that it hurts everybody when they lowball jobs like that. How do they expect for them, or anybody else, to be able to make a living with prices like that? It drives me crazy.

Spence i feel for you buddy, last year lost account that had 17 acreas of turf,a county deputy came in and got it at $225 per cut,nothing you can do but shake your head and laugh.

[_GUNNER_8]

Originally posted by LAWNGODFATHER
Start getting them to sign long term contracts.


Every contract i've ever seen has 30 day escape clause,so if they want out for lack of service or Pricing it doesn't matter if you got month to month or yearly or 2 year contracts,don't misunderstand what i just said i firmly in long term contracts but there is always a 30 day clause in there.

[kutnkru]

Just to clarify on my original post.

I was not comparing apples to oranges like you guys are. Im talking about Joe Contractor who has been thru college, taken the State exams to get his Certification, juggles his schedule to continue his education and to maintain that certification, thus asking a price for his services.

Im not talking about the jabrones holding a shovel that still live with their Mother (whether 15 yrs old or 115 yrs old) because they cant wipe their own noses -LOL!!! And yes I still stand behind my belief that a tradesman who works harder physically should get paid more money. however this is where the rationale behind work smarter not harder comes from because the genreal populous believes differently.

[Spence]

I like the idea of having a 30 day clause. This yard was not under cotract, so that would not have helped. As long as I get outbid by someone who atleast does it for a living, it doesn't bother me as bad. Its the part time people who cut grass for a little extra money that aggrevate me. If you are going to do it part time atleast have prices that compare to other LCO's. Don't do it for near nothing and take a guys livelyhood from him.

[juststarting023]

I think at some point in time you all had to low ball to get into this business . Admit it how else did you get your name out there,you know when you started your overhead was alot lower than it is now and you had to keep your price down to pay your bills.Now maybe your a little more respected in your community and people now you do good work you can charge 40 to 60 dollars an hour or higher lets look at what i can charge an hr and im new in the business this year .. insurance 70 mth =$2.50 day /truck $200 a mth=7.00 a day/ mower 85.00 mth=2.80 a day/had the echo weed eater and blower and my trailer and im covered under my wifes insurance if i quit my job lets say $25.00 a day for gas this is $37.30 a day to opperate and im licensed and insured so i charge 20 to 35 dollars an hour (depending on the area)and im a scrub,i dont think so im trying to servive just like you guys and make a profit and get my name out there so in a year or two i can charge 40 to 60 dollars an hr and i know there are people out there that are not ligit this is what keeps the market honest and competitive as it should be .Im not trying to affend anyone on this sight but lets be honest as well everyone has to start somewhere thats why you should never forget where you came from........:angry: :blob2: :confused: :confused:

[roscioli]

Its all about overhead. OF COURSE the majority of the scrubs arent paying taxes, but there is the legit guy who is paying taxes, but drives an older truck, uses a cheaper (but just as effective) mower, and survives on less. If i had 20-40 free hours I would sit on this site and see how many of the guys complaining about getting low-balled are the ones that replace their trucks every other year to look good. For trucks I see it the opposite way that most do. A brand new shiney truck may project a clean professional appearance, or the customer may say "holy hell, the guy who mows my lawn drives a 2002 f-550, and I drive a honda, he is ripping me off". I drive a 94 f-150. Its ugly as sin, not even my business color, but it gets the job done, and the overhead low. I paid $2500, you paid $35,000. Who can afford to mow for less? I still do it at nearly the rate you guys do, average $40/hour, and don't mean to bring myself into this, but really, if you drive the new truck, own a 10,000 sq. ft. shop, and all the rest, of course you can't afford to mow for the same prices, so don't complain, just get a sense of your business and what it costs you. I am not attacking anyone here, nor am I saying that I am better, or that I lowball, or that I am not legit. Nothing personal to anyone. If you are some of the very few who have it broken down to every detail, I commend you for that, if not, DO IT.

[BobbyBcuttin]

Juststarting your numbers have got me scratching my head 7 dollers a day for you truck that might make the payment what about fuel,auto insurance,maint.future replacement cost this applies to all equipment not just your truck.You didn't mention paying yourself then their's the profit for your company i'm not attacking you or anyone else their's just alot more to your number's that add's to your overhead than what your adding up

[lawnworker]

Getting the work is as important as knowing your costs. Some one could have all there overheads figured out and know what they need to charge for a large operation but if the work was not there due to market compitition all those figures would be meaningless. Just a thought for those in tight markets.

[darryl gesner]

Hey guys, there's nothing wrong with mowing with a 21 inch mower. I use a 6 HP push mower for all my finish mowing. I don't even need a ramp to get it in the truck, just toss it up there. I stick to smaller lawns, have long legs and can walk all day at a 4 mph pace (I have been an endurance athelete for over 20 years). It takes me longer than a big machine, but I can still make a minimum of $25/hr mowing. I make most of my $$ on clean-ups, mulching beds, trimming hedges, reparing stone driveways and reclaiming overgrown areas, brush hogging and doing small digging/grading jobs with my JD tractor (which I usually just drive to the job if it's under 10 miles away).

I keep my expenses really low. I don't pay unemployment or workmens comp because I don't have any employees (it's just me and the wife). My 85 Chevy suits me just fine. So, I can work 3 or 4 days a week for half the year and pay all my bills for a family of 4.

So call me a scrub or a lowballer, but I do quality work at a reasonable price and have more $$ than I know what to do with. Profit is about reducing cost, not increasing revenue!

Darryl

[LAWNGODFATHER]

Very good post there, darryl gesner.

I don't complain about lowballers, they will always be around, and quality LCO's will always out rule the scrubs.

Sure I have lost accounts to being under bid, but they were lousy bitchy people anyways.

Like you said you do quality work, and that $25 an hour is not bad.

Mine has to me much much more because my expences are a whole lot more than yours.

Anyways Good luck to you. You sound like you're doing well.

[proline32]

Or I'm just efficient.... I know that I need to make at least 40.00 per hour to cover expenses and try to make a profit and tuck away some money before november, I did drop my price this week some to make customers more interested, There are a lot of newbees out there this year, and so far I think it will be tough for a little bit, but I am concentrating on the smaller residential yards that I can do in under 1/2 an hour ... Today, I went to bid a lawn where the customer got my name from a friend of thiers , So i figured I may have this one in the bag, Uh, when I showed up there was a ford grenada parked at the customers home with one of those walmart stanley mowers in the trunk and a ryobi trimmer sticking out. I out of professional courtesy never bid a yard at the same time as another company, I will wait till they finish. Anyhow, this guy come out and I talk to him, this guy is a firefighter and he makes money under the table mowing lawns on his days off and he just told this woman that he'll cut the yard at 30.00 per visit. So he leaves, and I go to the door and ring the bell and the woman came out and I introduce myself and that I just met the previous bidder..... And I ask if she is going to hire him? she said "no, He has no references, and he does not offer a regular schedule, so I proceed to estimate out the yard and come up with 3, 457 sq ft of space to mow trim and edge. So I quote her 23.99 per visit because a yard this size takes less than 30 minutes tops. The moral is that all scrubs( those that arn't real businesses) arn't always the lowest.

[mike payne]

I mowed a small lawn for $25.00. I lost the job the next year to a 15 year old high school student, that did it for $20.00. The kid ran over a soda can and cut his leg and sueded the homeowner. Because he was under 18 years old he could not legally operate power equipment in our state. The home owner lost the suit and this year she called me to mow her lawn again. I took the contract again for $30.00. I told her the increase was due to the increase in liability insurance. She is happy to pay the higher amount now.

[proline32]

Good show mike! I should check with this state to see what are the rules about minors operating power equipt.

[LAWNGODFATHER]

Originally posted by mike payne
The kid ran over a soda can and cut his leg and sueded the homeowner. Because he was under 18 years old he could not legally operate power equipment in our state. The home owner lost the

This statment does not count.

He has to be working for an employer, not a home owner.

This is one of those leagal mumbo jumbo things.

Home owner got screwed by hiring an uninsured sue happy kid.

Has absolutly nothing to do with the law.

The age liability insurance restrictions are set by the INS co's.

He can leagaly run heavy equipment, being insured for it is a whole nother story.

[GarPA]

Some of us are our own worst enemy..in another post today I read where some 'lco veterans' would charge $27 to $30 for 15,500ft plus trimmimg and blowing? Maybe there's an extra charge on top of that for drive time, fuel, ramps up ramps down, phone, insurance, wear&tear and this and that...Can't run equipment and drive between jobs for that kind of money

[Andrew S]

If it makes you guys feel better under pricing is not unique to your country.

Down here in Australia we have more than our fair share of lowballers

[Toroguy]

Originally posted by roscioli
Its all about overhead... For trucks I see it the opposite way that most do... I paid $2500, you paid $35,000. Who can afford to mow for less?

Excellent point that nobody even acknowledged.

When the expensive equipment leaves the site and the property looks as good when cut by the $2500 truck pulling the $4000 in equipment, it becomes clear.

The $35000 truck depreciates AT LEAST $2500 after you drive it off the lot. A 35K rig may not be the norm, even a modest new truck is around 20K.

A tax break is not profit.

I am sure my rates are at least 15% below my competitors, but what percent lower is my overhead and expenses? Yup Im also sure it is over 15%...time for a bigger net...

Good point ricioli!

[kerr lawn]

hey
i'm 21 taking classes and i now i'm going into my 10th season of cutting grass and landscaping. I hate lowballers. I price the job at what i need to make a profit, with what equiment i got in my garage and all my expenses. I have priced jobs where the other company/customer think is cheaper, where i have been dead on, and where i have been high. Not what i know somebody else has. I have fiqured out i have about 22,000 in equiment, not including the truck. Just in my own defense.
If somebody wants to lowball it fine, because then the customer has found a new friend.
Not all college kids are lowballers, around here i know ppl younger than me and way older than me that do it for dirt cheap.
I shack my head and node, because i got more grass to cut.
peace
bryan

[jaybird24]

My theory is if some one drops me for a lowball they'll learn- when they call me to come back I usually say no- I make this clear ahead of time. If people learn not to mess with a good thing that can only help those of us that are trying to run an honest business.

[kerr lawn]

jaybird i hear that
i have told ppl if you are looking for the cheapest price, i won't be able to be that one. But are quality speaks for itself. Most ppl are shocked when i say this, but i don't say it unless i can tell they are looking for the lowballer ex. like this guy told me he could it for this much, what is your hourly charge per man, do you think you can beat this price. I don't need more hassale than it is worth.

[HBFOXJr]

Actually I think the whole industry and all its clients are on crack. It's the only way I can explain how bizarrre some of the thought processes work. Ok maybe it's a lack of thought at work.

Persoanally I've taken advantage of stupid people myself, just like our clients do. It's kind of a rush to hire someone to do something that you could have payed more money for, but they were too stupid to ask for it. No, they are not all uninsured or incompetant. Of course some clients are too stupid to be able to evaluate that.

[toby]

Originally posted by Lech615
normally I would charge 30-35$ for these homes, but why not offer them $28 for the service and hope to get five to ten in the area. Lets face it 5-10 in a one area at $28 is better than 5-10 in 5-10 different areas at $30-35. Maybe I am wrong, but I will have to see for myself.

You're not wrong. My LCO offers Premium & Basic mowing services & there is ALOT more $$$ in Basic with volume than Premium with drive time. Plus, as you said, less hassles with customer expectations. I am phasing out the Premium service.

[AVRECON]

I don't care what anybody payed for what, truck, mower, trimmer, etc. Charge what the job is worth, PERIOD!
I've never understood somebody charging $25 bucks for a $75 dollar job. I don't care if you were given your equipment. Thats the difference between electricians, plumbers and US. Those guys are gonna make the jack, and the MAJORITY of them ain't gonna do the job for free just to get IT!
Lets face it folks, alot of people in this biz ain't the brightest folks in the world. And therefore, when you have to bid against folks that are ignorant, because THEY think they are making a profit, what can you do? Answer not a damn thing!
I don't know what the answer is, short of some type of legislation from our particular states. Which would probably make things worse anyway.

[BerksLawn]

We actually do have yards for 15-20$ but these are older people my dad has had since he started the company over 20 years ago. We also do 6 yards for 20$ each and are out of there in an hour and a half at most. But now are schedule is full and we won't touch a yard for less then 35$ so if we get it, it will be worth the while to do it. There are guys lowballing around here. But one company, Afordable Lawncare yea right they charged 60$ to do a yard next to the 6 we do for 20$. It was 2 of them and one on a 60" Scag walkebehind and me and my dad were down 3 with my dad triming and me with a 48" Kees beltdrive when they finsihed up theres.

[AndyL]

I get a kick out of this thread, last year, I was working for a big established company... Where the rates were pretty high (minimum price cut (>=2000sq feet) was 35$ cdn) These were lawns we could do in 15 minutes or so (we were all paid on commision; we MOVED)

Starting my own company, I have one area in mind. North America's biggest trailer park. All the yards are under 1000sq feet (Most are under 500sq ft). I'm going to probably charge 15$! I cut more than a few yards this size last year, I could knock off one (including all triming, mowing, blowing, loading/unloading filling out invoice) in _UNDER_ 10 minutes... Now assume I get 4 houses in one 'section'. Not difficult, I've talked to many of my current co workers who live up there, and a few friends up there. And they'd love to have me come in and start cutting! So assume 4 cuts, 10 minutes each, thats 40 minutes, and 60$ earnings. Maybe we want a smoke break, and stop at the gas station to see a man about a dog. Or maybe have to drive to another area... I've still made 60$. Put in a good 8 hour day in that area, 32 cuts, 480$. Lets say 20$ in gas, 10$ in insurance Say I'm paying a helper 18% commision, 86.4$ So I've got 116.40 in total expenses that day, 363.30 in profits, now of course I'm going to loose a bit to taxes/wcb lets say 45$ (ballpark) 318.60 Left, Pay myself 100$ 218.60 left. Now I have 2 company cellphones (mikes) lets say those cost me 4$ a day... 214.60 left over... So come the end of the day, lets say I have 200$ in the bank (lets assume that other 14.60 gets eaten up printing those invoiced and other office costs) 200$ can go to upcoming equipment purchases/maintenance, whatever... Someone care to explain to me where I loose money by charging 15$/cut?!

The other companies in the city, charge 30-35$ just to show up. How many customers do you think these guys have in that area? From my conversations with the owners of these companies, the answer is VERY FEW. But they get LOTS of requests for estimates!

I guess I'll be considered a scrub, or a lowballer, but I don't see how that will happen, considering my mow quality is one of the best. Far exceeding the work I've seen in this area so far!

Andy

[LAWNGODFATHER]

Originally posted by kitzy
Some of us are our own worst enemy..in another post today I read where some 'lco veterans' would charge $27 to $30 for 15,500ft plus trimmimg and blowing? Maybe there's an extra charge on top of that for drive time, fuel, ramps up ramps down, phone, insurance, wear&tear and this and that...Can't run equipment and drive between jobs for that kind of money

How long does it take to cut trim and blow 1/3 of a acre?

Since this is all sight un-seen bidding, I would have to see prop for an actual bid.

[kerr lawn]

I mow, trim and blow my HOA for 350 a cut.
I have to propose on the mulching job i need 33 yards and i'm charging $90yd which includes clean-up, edging, mulching, pulling 4 small dead burning bushes and replacing 2 of them for a total of $2970.
I get my mulch at 14.69yd plus $20 delivery for every 15 yds, and burning bushes at a max. of $25 a piece for a total of $600. I fiqure i got about $600 in labor, plus a motorized wheel barrow at $55day for no more than 2-3 days. So my total expenses are 1365 for 3 days work. Is this a good deal?

There also 3 crabapples trees that need trimming and a stump to pull I'm charging 150 for the total, but if somebody ask me to do this job only i would charge $225. Do you all consider this lowballing or smart business?
Thanks for your input.
peace
bryan

[LAWNGODFATHER]

Creative marketing.

[mjohnsonlawn]

:angry: YOU ARE RIGHT I WOULD RATHER HAVE 10 ACCOUNTS IN ONE PLACE THEN DRIVE FOR 10 MILES TO THE NEXT JOB. I HAVE 7 MOWERS ALL COST A FEW 1,000 BUCKS ABOUT 10,000 A PC.. I WORK FULLTIME AS A FIREFIGHTER, AND THIS IS MY MONEY MAKER.

I HAVE A FAMILY OWNED AND OPERATED BUISNESS AND I FEEL THE PAIN OF PEOPLE UNDER CUTTING ME. NOT THE LITTLE GUYS BUT THE BIG ONE'S THEY CUT TO HALF MY PRICE WITH FOLKS THAT SPEAK NO ENGLISH. THAT IS OK I GET MOST OF THEM BACK AFTER ONCE OR TWICE OF TRING TO TALK TO THE WORKERS.:blob2:

[Russo]

My experience is that these Lowballers don't help anyone including themselves. I have tried to find a happy medium in this problem. Someone please tell me if this makes me a dreaded Lowballer!

I will mow at $25 / acre for the first mow only. This way the customer can see the quality- always striped, always edged, and I make sure they know I'm licensed and insured. After the first mow, I give them the real price( 40 - 55 / acre) for the rest of the season. PLUS, after doing it once, I know exactly how long it will take me to do it.

This works for me and I never considered it Lowballing until reading some of these posts. So am i a lowballer?????

[bubble boy]

so lets continue to beat this horse..

Originally posted by AndyL
So assume 4 cuts, 10 minutes each, thats 40 minutes, and 60$ earnings. Maybe we want a smoke break, and stop at the gas station to see a man about a dog. Or maybe have to drive to another area... I've still made 60$. Put in a good 8 hour day in that area, 32 cuts, 480$. Lets say 20$ in gas, 10$ in insurance Say I'm paying a helper 18% commision, 86.4$ So I've got 116.40 in total expenses that day, 363.30 in profits, now of course I'm going to loose a bit to taxes/wcb lets say 45$ (ballpark) 318.60 Left, Pay myself 100$ 218.60 left. Now I have 2 company cellphones (mikes) lets say those cost me 4$ a day... 214.60 left over... So come the end of the day, lets say I have 200$ in the bank (lets assume that other 14.60 gets eaten up printing those invoiced and other office costs) 200$ can go to upcoming equipment purchases/maintenance, whatever... Someone care to explain to me where I loose money by charging 15$/cut?!

Andy

I'll explain...

Add $3000-5000 advertising to get 160 customers, cause i doubt your that popular (not nearly enough $ to get 160 but lets go with it)

Add Employers portion of EI/CPP (You, of course, know you need to remit this)

You estimate taxes and WCB at 10% of your revenue? Well lets take off not just income taxes and WCB, but that pesky 7% GST (You also know you need to remit this)

$6000 per year if you finance a new truck (at that volume you will need good wheels)

Is that all...no, wait need machines to cut this damn green stuff so another $4000 (21", blower, trimmer)

So working on an annual basis you missed at least $20000 in expenses. As for the revenue side- weekly cuts in a trailer park?Sure. :rolleyes:
So now you either need more customers to get 5 days of cuts, or your revenue drops.

AndyL, as you said, i get a kick out of this thread...for just slightly different reasons than yourself
:cry:

[RYAN]

Bubble boy where do you get those numbers. I don't think it will cost him $3000- 5000 to print up some flyers to put on the trailer doors. Also you said $4000 for a 21" mower, trimmer, blower. I think he can get a good 21"for $800 and a good trimmer for $250, And $400 for the blower. Your numbers seem a bit extreme. Beside I think he was only being hypathetical. I also get a kick out of this thread for certian reasons.

[olderthandirt]

Although I'm in the design and installation part of the green industry, I gotta put my 2 cents in on this subject. I learned along time ago you can't beat a low baller so I went the other way. My prices are usually a lot higher than the competition, people ask why and I tell them you pay for quality. I lose about half the jobs but I make it up with the other half. Why do 2 jobs for a 100 apiece when you can do one for $200. There are a lot of people "clients"that feel that the higher the price the better the quality. But a great job is still a great job no matter what you pay for it.

[AndyL]

I couldn't be bothered to spend that much on advertising, this is a smaller town... And considering I've got 55 people already signed up (30 in the trailer park, already agreed to pay up front, for weekly mowing, most have submitted payment for first months mowing)

Maybe your WCB is way out of line with mine, But from the numbers I have so far, i'm looking at approximately 12-15% of gross going to taxes. GST is another matter altogther, to me thats billed on top, goes into a separate account...

6000$ to finance a truck? Geeze, my trucks cost 1000$ for the pair, came with service boxes which sold for 2500 each... Paid for the new dump boxes, and on board storage! They'll look respectable, thats all I care about. I won't get dragged into that whole B.S. of my truck/trailer is newer/better than yours. As long as they are mechanically sound (And we're working on that right now, theres a 302/C6/NP205 sitting in peices scattered about a shop getting rebuilt as I have time) Sure, they look beat up now, 2 pints of bondo and a couple cans of tremclad white gloss can go far to make them presentable :) (lot of elbow grease involved too)

Hey! Those numbers for equipment are close! JA60s cost about 450 each, need 2, 2 echo trimmers gotta run into the city, but I recall about 400 last I looked. BR400 blower is in the 500 range. 3200 right there, ok so you're close, since I'll probably buy a backup blower, and a few bits n peices (Stihl heads to replace those tiny echo ones) Thats per truck of course...

Now you realize I was underestimating amount of work do-able in a day right? I don't know about your staff, but I regularly managed 30 properties in a day, most were 2k+. I was just showing what could be done.

Andy

Originally posted by bubble boy
so lets continue to beat this horse..



I'll explain...

Add $3000-5000 advertising to get 160 customers, cause i doubt your that popular (not nearly enough $ to get 160 but lets go with it)

Add Employers portion of EI/CPP (You, of course, know you need to remit this)

You estimate taxes and WCB at 10% of your revenue? Well lets take off not just income taxes and WCB, but that pesky 7% GST (You also know you need to remit this)

$6000 per year if you finance a new truck (at that volume you will need good wheels)

Is that all...no, wait need machines to cut this damn green stuff so another $4000 (21", blower, trimmer)

So working on an annual basis you missed at least $20000 in expenses. As for the revenue side- weekly cuts in a trailer park?Sure. :rolleyes:
So now you either need more customers to get 5 days of cuts, or your revenue drops.

AndyL, as you said, i get a kick out of this thread...for just slightly different reasons than yourself
:cry:

[bubble boy]

RYAN-to secure 160 new customers i would be looking at minimum $5000, but we have a lot of competition here. 160 customers would only result from tens of thousands of flyers, assuming you had a price consistent, not lowballing, with the market.

AndyL may be dealing with a different situation, and he has 55 already so i'll concede it could cost less to get to 160.

if GST is over and above the revenue you quote, your good there.

2 trucks at $1000, i don't know. Maybe if you were mechanically inclined you could keep them going with parts and downtime your only costs. but one day down is 32 customers missed-could be a lot of calls. Would be in my market. As for new vs. old, i also couldn't care less as long as their presentable. i never look down on a guy or company cause his truck is older.

in no way would i doubt you could do 30 small props in a day. Tough, but possible. If you have the customers.

Still say your estimates were at least $10 000 short, assuming minimal problems with the trucks. i realize you were giving examples to show what could be done at $15 a cut, i just wanted to make sure those reading realize there are other costs involved. too often here i read peoples numbers that are not realistic.

but hey, i'll give you this: a niche is great if you hit it. what are incomes like in the area youre working in? is there a lot of competition?

Not to stereotype, but i never thought a trailer park and surrounding areas would be a booming market.

a new world order:D

[klc]

Just remember we were ALL at one time the lowballer to get started In order to keep your clients you must give them service service service thats all it takes do a good job do the extras at no charge talk with them BE HUMAN because they are

[Nebraska]

The hole you'll dig is tough to get out of.

[LAWNGODFATHER]

Originally posted by klc
Just remember we were ALL at one time the lowballer to get started In order to keep your clients you must give them service service service thats all it takes do a good job do the extras at no charge talk with them BE HUMAN because they are

what you put about no charge starts a chain reaction that will put you out of business before you can blink.

Charge for everything.

Nebraska The hole you'll dig is tough to get out of.

That's right it will take years to climb out.

[wayne volz]

:confused:
After reading several of these post, I have become veryconfused.

Please don't anyone take this the wrong way butI have read people saying they don't think their work is worth the money, low balling is ok if they can do it for less, we are in college and can do it cheaper and so on. If you are happy at a certain rate and expect 30-45 dollars per hour with a 14 year old helping you are you insured? If not, you are not doing yourself, your customers are the industry any favors. I have yet to read a post by anyone suggesting that they charge based on a specific methodology. It all seems to be based on what the competetion is charging. If you expect to be profitable and work in this industry, please help those of us that are in this as a profession and use a method to your pricing strategy. Pricing based on what the competition is charging will not allow you to survive the long haul. Ask yourself this question. Why do I charge what I charge? I guarantee you that Mc Donald's knows what it cost to get a Big Mac from their side of the counter into your hands. Is the success of their company more important than yours?

Also, I read a thread that stated this was hard work but not worth $100.00 per hour. Why not? If the market will bear it, let the consumer pay it. We as an industry want to cut lawns for 20 - 25 - 30 and so on but do not know why we are doing it. You must have PRIDE IN WHAT YOU DO. Just because you are in the lawn service industry, does not mean you can not be proud, professional, and educated. Business knowledge and training are the two factors missing in this industry. Being professional, acting professional and looking professional = PROFEESIONAL COMPENSATION.

Don't be ashamed to be compensated as a professional. Perceived value for the service is a must. We are the only industry that I know of that will send a truck, labor and equipment to a job site for 15 - 20 - 25 dollars. Compare yourself to a Plumber, Heating & Air Service, Appliance Repair and so on. Will they come to your home for such a small amount? "NO" Why?
They know what it cost to get there and provide the service. Don't say to yourself that is different. Why? You offer a profeesional service that equals most of all Free time and customer service. A little PRIDE in what you do goes a long way toward professionalism. If you know what it really cost you to provide the service, you will never under sell it again. Until then, you are only guessing at best.

Thanks for listening.

Wayne

[lbmd1]

Excellent post Wayne!!!

[Nebraska]

A lifetime or business bankruptcy.

[LAWNGODFATHER]

wayne volz; nice:D

It's cost more to drive that pinto around with a 21" push mower than a pair of channel lock pliers.

Meaning it cost a lot of money to keep the equipment we use so charge for it.

[Nebraska]

Here is another way to look at pricing too low, without sufficient knowledge of your costs, is that if it is priced under not only your minimum profit margins but also priced at a level that does not allow you to cover your costs:
YOU ARE PAYING THEM TO SERVICE THE PROPERTY!

[LAWNS AND MOWER]

Nice post Wayne, except there's one thing you're not considering. Just about any Tom, Dick or Jane can mow a yard. Can these same Tom, Dick and Janes fix a busted pipe? I'd say 99% can't. That's why plumbers charge such a premium.

LAWNS AND MOWER

[SLS]

LAWNS AND MOWER has a valid point.

Seen any of these lately?

http://bigrifle2.home.att.net/mowered.gif

It proves his point if you ask me.

We know that they won't last very long but there is always a new crop just waiting to take their place. And it just makes it harder to justify our prices to the uneducated comsumer. :(

Oh well, live ain't always easy, or fair.

One thing never changes...the cream always rises to the top. The rest becomes cottage cheese. :D

[parkwest]

Originally posted by LAWNS AND MOWER
Nice post Wayne, except there's one thing you're not considering. Just about any Tom, Dick or Jane can mow a yard. Can these same Tom, Dick and Janes fix a busted pipe? I'd say 99% can't. That's why plumbers charge such a premium.

Question for L&M: Why do you think a lawn technician is able to safely operate a $10,000 mower but unable to operate a couple of pipe wrenches or propane torch. Or unable to remember "hot on the left, cold on the right, and schitt runs downhill?" Why do you think 99% can't? Please prove your numbers.

That is one of the problems with this industry, people in it continue to sell themselves short.

I like what wayne said!!!

[bubble boy]

thread is going to likely switch topics here, but...

parkwest, i can hire two students to do a list of houses (just cutting) and the job would be adequate, not great, but good enough.

would i let those two install my AC, or fix my toilet, etc?

my neighbor's kid cuts their lawn, and their happy with the job. would they let that kid install a new sink? Nope, i dont think so.

there is a difference. Painting would perhaps be more along the lines of what we do, and they have low ballers too.

[parkwest]

Bubbleboy, are you serious? Go to a local housing development and watch who are doing the installs. Trust me, they're not rocket scientist from MIT. Any 15 y.o. who can read should be able to install a sink after receiving the same amount of instruction you would give to a new hire before letting him go off and mow grass.

By the way, plumbers in this country don't do AC installs.

In canada to fix a toilet, doesn't that just involve digging a new hole and dragging the outhouse over it? :-)

[bubble boy]

fine, im sure kids do it, no surprise somewhere its done.

i don't however recall seeing many 15 yr olds operating plumbing companies full time. lawncare, dime a dozen.

and i dont know personally one person who could fix a toilet that was spewing water.

but i know lots (not in the industry) who can cut grass.

maybe i don't hang with the right crowd.

and obviously i mean hvac mechanical co.'s

and seeing as your from potato land, i'll let the last remark go. just too easy: i like at least a small challenge;)

[Toroguy]

Originally posted by wayne volz
:confused:
Compare yourself to a Plumber, Heating & Air Service, Appliance Repair and so on. Will they come to your home for such a small amount? "NO" Why?


Wayne

Why?

The above mentioned service customers on a "on call" or emergency basis. No comparison to weekly maintenance service.

I agree with the sentiment of the post however.

[bubble boy]

the more i think about toroguys post, the more it seems to be part of the answer to this debate over the last few posts.

think-the plumber isný coming every week, he's there to solve a current problem-possibly an ëmergency"

we are there, in the case of maintenance, to perform a chore.

so say we charge $50/hr to perform that service. my example of painting is not great, cause that is done maybe once a year.

how about maid services? weekly, bi-weekly. they dont get to charge much more than us-not in my area anyway. they perform a chore-and they have the same scrub/lowballer problem.

now say we have mr. plumber charging $100 bucks an hour. we can get that rate too, just not for performing a chore. but how about repairing a collapsed retaining wall? removing a fallen tree?
these are more one shot jobs a customer needs done now.

lanscape installation should perhaps fall somewhere in the middle.

hypothetical situation-im a homeowner who is having a party on saturday. its monday, and my toilet does't flush, an oak in my yard falls over, the house is a mess and the lawn needs cutting.

which tasks will i bring a contractor in for first? and which can i conceivably do myself? (lets assume i'm not very handy)

the less i'm able to do a chore, the more the price should be.

[wayne volz]

:)

You guys are taking this comparison thing to extreme. My initial intent was not to make it a direct comparison. The intent was to show that these are service related companies that do not approach a job for 15-20-25 dollars. The reason they do not approach jobs for that amount is due to the fact that the managers/owners have the training and or education to know what it cost them to get to the job site and what it takes to be profitable to complete the job. " Back to the basic primise of knowing "why they charge what they charge."

The post was not to say that 15 year olds should or shouldn't be cuuting grass or fixing broken pipes. Maybe a bad analagy on my part. The point was this.
1) You must know why you charge what you charge
2) You can not charge based on what the competition is charging
3) You must have PRIDE in what you do. Our services are at least as valuable as the before mentioned contractors. Maybe we are not fixing leaks, generating AC or fixing appliances. However, if it were not for a quality look on the outside of these commercial properties the leakes and other problems occuring on the inside would not even be an issue.

THE WHOLE POINT OF THIS POST FROM THE BEGINNING WAS TO SAY THAT YOU MUST HAVE PRIDE IN WHAT YOU DO OR DO SOMETHING ELSE. IF YOU DON'T THINK IT'S WORTH THE COST, WHO SHOULD?

THANKS AGAIN

WAYNE