Too Expensive

[TGCummings]

Okay, I need to learn a lesson from this one I think. I know numbers mean nothing w/o seeing, and that rates vary everywhere, but any feedback here is appreciated.

I started cutting for the local city sheriff candidate last month. This month he tells me I'm doing a wonderful job and asks if I would like to start doing a more full-service property management at his house. Of course I do, that's just my game, let me work up a quote.

The lawn work is at $65/month for weekly service (don't make that an issue, I know you acreage people think that's ridiculous but that's high in my area for the size of lawn -- less than 1500 square feet -- and I make a good $45/hour rate on site and it's right along my route) so I needed to factor in a longer stay/stop and quarterly trimming of shrubs and bushes.

I figured 4-6 hours of trimming every 3 months = $240 = $80/month.

Weeding of all flower and rock beds (app. 10-15 minutes extra/stop) = $40/month.

Upkeep of a long, narrow 600 square foot area of rock and dirt where wild grass will grow between an occaisonal palm tree and juniper bush (weedwacking/junk mowing app. 5-10 minutes extra time each stop) = $20/month.

$65 + $80 + $40 + $20 = $205/month for a completely carefree property.

So, we called him with his updated quote and were met with stunned disbelief. It's too expensive at more than $1500 more per year. Just stick to the mowing, he says, you're doing a great job.

I'm frustrated. Perhaps I could have knocked 10% off for taking care of the entire property (bulk rate) but I get the feeling $185/month wasn't nearly what he had in mind either. After all, that's still nearly $1500 more per year...

I guess it's just another instance of someone thinking that since I'm already there can't I do a bunch more for just a few more dollars?

My guess is he's going to find someone operating a cheesy operation to trim his shrubs for less than half, pull the weeds himself, and let the rest grow over while I keep his lawn cut. I find this sort of thing all the time here.

Is it just the area I live in that no one wants to pay a decent rate for full service landscape care, or am I just being completely unreasonable?

Do you find this sort of thing common where you are??? :confused:

[65hoss]

I guess I'm confused, such a small property and you have 4-6 hrs to trim bushes. Is there several hundred of them? That number just seems real high to me. But, I don't see the property.

[AielLandscaping]

i'm probably closest to you in terms of property size and income levels... and i find this all the time... i would worry though if someone else starts doing the extra stuff for a cheaper price. while they may be working themselves out of business, your customer won't understand that. all they care about is the bottom line.. if they get their feet in, they might price you out all together

[TGCummings]

It's not a small property, just a small amount of lawn on it. I estimated about a half day each stop. Possibly I could get the shrubs done in 2-3 hours (with cleanup and haul off) but I find the variation in shrub work to be greatest of all.

What do you think, Hoss, too much for the shrubs? How about 3 hours @ $45/hour? That would've knocked $35 off the overall rate and brought it down to $170/month. More reasonable?

[TGCummings]

Originally posted by AielLandscaping
if they get their feet in, they might price you out all together

I agree completely, which is why I'm trying to find a workable solution. I may not be able to head this one off now, but I'd like to nail down my pricing on these things to circumvent these sort of problems in the future. If I'm high on my rate, I just want to know so I can fix that. The one thing I know I can't do, at any rate, is compete with the kinds of guys in the area who'll cut and/or trim anything for $20/hour (or less).

Going back to what I responded to right above, to Hoss, I wonder if I could even trim at that rate. I go after $60/hour for trimming shrubs, et. al., and I'll have to compromise time and rate in the above scenario. I could possibly trim for 3 hours @ $45/hour, but isn't it better to err on the side of making too much as opposed to too little?

[Runner]

65 / 4= $16.25. per mow. He probably figured that since you're working for free mowing, that you'd be more than happy to do the other stuff for free, too. I'm sorry, I don't mean to be harsh, but it's like this. You get $16.25 per cut. Out of which, it costed you how much to drive there, (include NOT just your driving time, but fuel, insurance, use of the vehicle-maintenance, and cost of the vehicle. O.k., now your there. Drop the gate on your trailer. Yes, you have money invested in this carriage to carry your equipment, = maintenance of it, AND you have to pay for a registration just to be able to have it on the road. O.k., now you have all your equipment, however, he didn't bring his lawn to YOU to service, YOU had to take your stuff to HIM. And no, don't justify it by saying, "Well, I was in the area, anyway." That is irrelevant. Now, you burn your fuel. depreciating your equipment, causing you (even a small portion) of service such as blade sharpening. Now, after your done, you figure your time, but also figure your driving time not just getting there, but driving aWAY from the place, as well. O.k., collect your $16.25, NOW, take about 30% of that away from yourself for taxes, Take some out for insurance, take some out to put back into the company, and give what's left over to yourself. Ok, now realize that the neighbor kid probably would have been paid the same, using the CUSTomers equipment. You could have made this much working for someone else, or better yet, could have made MORE working for yourSELF. Bottom line is, realize what it costs to get over there and get the job done. Again, sorry, I don't mean to come off as harsh. I just don't like to see people get taken advantage of.

[TGCummings]

No problem, Runner, I get this all the time from folks who don't work in my market. Again, don't dwell on this because I've spent years perfecting my routes and rates considering the size of property and what I deal with in "competition" in my market. Again, my rates are 30-50% higher than what I deal with in "competition" and I make a solid rate (and living) with what I do. So, forget your market and your minimums and understand that I know what I'm doing, as far as lawn care, in mine.

It's the rest of it that this question is about.

[Russo]

Sound like it is HIS numbers that are scaring him, not yours. he probably just thought that it wouldn't cost that much. I would ask him "Do you have an amount budgeted for landscaping? Perhaps we can prioritize what services you want for that budget."

You are just assuming that he will find someone else and pull his own weeds. That's a big guess. You may offer a deal, heck, it's not against the rules to negotiate. But don't stray from your professionalism. You know what it takes to make a fair profit and do the best job possible.

Don't head for lowballersville because of HIS decision making process.

I think you really know all of this and just got a little frustrated cause you want the job pretty bad. Am I wrong?

[AielLandscaping]

just a thought your trying to figure out something with so many variables that you know that someone is going to get the bad end of this deal right? what do you think about charging the customer an hourly rate? just let them know a high and low figure as to what you think it will take, then charge accordingly... if you give a fixed rate then either you make more then your desired rate, which is great for you but only if you don't lose the job, or you charge too little and end up resenting doing the job.

if you do this though, you'll have to tell the customer your hourly rate, and you will be met with " your way too high.. i love the work you do, but come on thats too high " they always think that they are paying you directly and that what they pay you is pure profit.. you couldn't possibly have overhead... after all your " just a lawn guy " in their eyes... man we don't get enough respect...

[65hoss]

Originally posted by TGCummings
It's not a small property, just a small amount of lawn on it. I estimated about a half day each stop. Possibly I could get the shrubs done in 2-3 hours (with cleanup and haul off) but I find the variation in shrub work to be greatest of all.

What do you think, Hoss, too much for the shrubs? How about 3 hours @ $45/hour? That would've knocked $35 off the overall rate and brought it down to $170/month. More reasonable?

I think the $45-$65 range per hour for shrubs is fine. Its not real equipment intensive, but very labor intensive. Could you spray out the beds to eliminate some of the weed pulling time? Especially the rock areas.

Only you know what is involved in this property, don't short change yourself. If you know your costs and what you need to make on it, stick with it. Don't resort to lowball tactics to try to get the job. But, if you can figure a way to knock off some time and lower the bid price some you could try to still get the biz. If you attack it correctly he may think your really interested in making it work for him.

[TGCummings]

You are absolutely correct, Landscraper.

For years, I've stuck to my guns about my "take it or leave it" rate for additional services but this one stuck with me. You see, he's a local politician (sheriff's candidate) and I know he speaks to hundreds of people a week. When landscaping comes up I wanted to think the words coming out of his mouth were "I know a guy who's great, very professional and reasonable".

Now, I know the words will be "expensive but professional...".

I'll see if I can recoup some of this by breaking it down for him. His initial question involved only the shrubs then, as we talked, he began mentioning that dirt field with the wild grass and having his son over a week or two ago for weeding. I figured I could do the whole thing and relieve his worries. We'll see how this one comes out, but I'm really interested in working up a better system of quoting these services to avoid the sticker shock in the future.

I'm always working to improve my systems, it's a fetish of mine. :)

Thanks again!

[TGCummings]

Originally posted by 65hoss
Could you spray out the beds to eliminate some of the weed pulling time? Especially the rock areas.

Probably so, but this brings another question to mind:

For those of you do roundup the landscape beds (where you can, of course) do you charge as if you'll be spending minutes spraying or do you charge is as if you'll be pulling? To me, you charge the pulling rate and save your time with the spraying. After all, you're simply finding a more efficient way to do business, correct?

[TGCummings]

Here's what we're going to do:

We're going to go back to this customer with a stream-lined proposal. Basically, I'm knocking $15 off my trimming cost/month ($195 each visit, 3-4 hours per visit), $10 off the cost of that 600 square foot dirt patch (I can manage it every other visit to offset that), and eliminate any hand-weeding ($40/month off). We can still manage the rock beds and other problem areas with roundup (where there are no additional plants), make the property look much better and save him $65/month.

I want to make this as much a learning experience as possible. Essentially we're telling him that we can offer the same package at a reduced rate by eliminating any hand-weeding (such a precise and intensive chore) from the schedule. We'll still make out alright and eliminate the worst part of the work.

If he balks, I'll chalk it up to learning once again.

What do you think?

[TGCummings]

My mistake. After redoing the math there I realize I'll save him $55/month, not $65. :)

[BRIAN GALLO]

Unfortunately I deal with the "cheap" mentality as well. As someone said earlier, the customer figures since you are there mowing, they'll flip you an extra $5 to stay another hour and do all kind of other work. Afterall, "thats what Jimmy the neighbor kid used to do when he was saving for a dirt bike". I find that no matter how you crunch the numbers with those types, they aren't going to go for it unless its at the ridiculous price they want to pay. :(

[gogetter]

Is 4 trimmings the norm out your way? Could you get away with 3, or would they look too shabby between trims?

[nu83]

Well to me it doesn't make sense to me how you can charge $16 to mow and $50 for trimming and upkeep. I dont see how you can charge 16 bucks for any lawn, your costs are about the same as mine, but I'll take your word that you have it figured out. My point is though, $50 a week for the extra services sounds ok to me, but if your area will only allow for $16 a mow of 1500 sq.ft. then it most likely will only allow for about $25 for the other services. How you can do it for either is beyond me.
Good Luck..
Dan

[nu83]

I would much rather be known as professional and expensive than cheap. I enjoy what I do, but if Im not going to make money on a job why would I want to? I want to serve a specific client, sure Ill take on others but I target customers that dont mind paying for a great looking yard. Ill leave the "cut my yard for 20 bucks" customers to the high school kids. There is a reason that so many lawn companys go under after the first two years, they see the money comming in, but cant equate the money going out. Yea its great if you have $5k a week comming in, but if you have $4,500 going out you wont last long. Understanding your expenses and the cost of doing "the job" is key. I don't know your market and I know that you get this alot, but running the math here there is no way you are charging enough. Maybe you can enlighten me on your cost cutting methods? thanks.
Dan

[TLS]

Originally posted by TGCummings
"I know a guy who's great, very professional and reasonable".

Now, I know the words will be "expensive but professional...".




Whats wrong with that?

Who wants to be know as reasonable? Thats a start in the WRONG direction there!



I agree with Runner, $16 for a visit is just peanuts, I dont care if it only takes you 8 minutes, you still have to get there. Now what happens when you have to cut it 5 or 6 times a month?

I'd hate to see what the 30-50% cheaper LCO's are doing for their money!

[AielLandscaping]

out here all of our customers are with in 5 min or less drive from each other so lcos here don't factor in cost of getting from one job to another. that's why you'll see posts about jobs for 16 a mow being a good deal

[LawnLad]

I'd cut to the chase with the customer and ask him what his budget is - then let him know what you can do for that budget. Adjust his expecations for his budget. An estimate that is a shot in the dark without knowing what the price point is could hit the mark or most likely miss the target all together. It sounds like you missed his price point. Don't adjust your profit or time on the job - you know how long it takes to produce. Adjust the job to fit his pricing and educate him so his expectations are in line with what is reasonable.

[TGCummings]

Aiel explained it well enough.

Lawns out here are all postage stamp and all close together so 'getting to it' is no issue. It's a minute from the cut before it and a minute to get to the next one. 15-20 minutes on the job @ $16.25/cut = $48.75-$65/hour gross. Solo, I can cut 20 or so of these type jobs a day. For much smaller lawns (500 square) I can charge $40/month and get in and out in 5-10 minutes, for larger lawns (3000 square +) my rates are in the $100+/month range and I can get those in 30-40 minutes/stop. Upselling (fertilizer/weeding) makes these individual stops even more profitable. Yes, I'd like to cut these for $25/stop ($75-$100/hour) but I'm sure you'd like to cut your $30/cut properties at $50/cut and increase to mad profits as well. However, you know what your market can bear, so you price for profit.

I never cut 6 times a month. Weekly lawns are cut weekly and biweeklys are cut biweekly. In a 5-week month I might cut 5 times, but in a holiday/heavy rain month I might cut only 3. The price stays the same and averages itself out in the long run. Also, I cut year around and receive my fee monthly year around.

Nu, trimming costs much more because (see if you can follow this ;) ), it takes much more time. It's an 'additional service' that I'll do at the end of a given week. It's the only thing I haul away (I mulch all grass) and requires a different setup of equipment than what I carry on a day to day basis. I can cut the lawn 12 times in three months, spending 3 total man hours in that time, for $195. I then spend 3-4 total hours additional every three months trimming for $195-$240 additional dollars. Each service is charged by it's own standards, by figuring cost, time, and equipment use.

I concede the point that I was out of my mind when I wrote those words about 'professional and expensive', TLS. That's exactly the reputation I want, and that I'm building toward. Call it a case of too many numbers on the brain weighing me down and forcing me to think unclearly. Thanks for straightening me out again there. ;)

Now, the update:

We called the sheriff's candidate with a stream-lined proposal, in an attempt to fit closer to his budget. The new proposal cut out about $55/month worth of services and brought his quote to an amenable $150/month while still keeping enough additional services in the package to keep his property looking the best on his block.

Well, it simply wasn't enough.

The last guy who took care of his property did the weekly mowing, upkeep of landscape beds, trimming all shrubs and bushes quarterly, and keeping that dirt/rock/weed field in shape for the low, low price of $75/month. :rolleyes:

What company did he work for?

An armored truck company. He took care of the Sheriff Commander's place on the side for extra 'spending' dough.

Where is he now?

He messed up his back and can't do any of this anymore.

There's my "competition" in a nutshell.

At any rate, he wants as much as possible done on a budget of $100/month. We're going to stick to his weekly mowing at $65/month because (doubters aside) that's the only way we make the profit at this stop on that budget.

You'd think a candidate for local Sheriff (head honcho of things law-enforced) would look for a legitimate company to run his services. However, that's not the real world...

I did a quote on Saturday for a very similar property that came to $240/month for all services. The man could not believe how well-priced it was. It goes to show you that pricing is a very subjective thing and that some appreciate professionality while others look only at price.

Thanks again guys!

[Russo]

Originally posted by TGCummings

You'd think a candidate for local Sheriff (head honcho of things law-enforced) would look for a legitimate company to run his services. However, that's not the real world...

Not in some of my experiences.



What a great expample of how 2 customers have 2 totally different expectations and how we as LCOs strattle the line of service and price when everyone has a seperate vision of value.

Looking foreword to your next thread, TG, about all the extras you are selling him because so little is included in the price for what he expects. May I suggest it's title? How about " There's a new sherriff in town".

I'll be lookin for it!

Best of luck, Landscraper.

[gogetter]

Drive time is only ONE factor. What about gas and oil for truck and all equipment? What about taxes, insurance? Not to mention:

Time spent billing.
Time spent maintaining equip.
Replacement parts (filters, belts, etc.).
Stamps, envelopes.
Phone bills.

And the list goes on. Once you factor in all this, you're probably down to under 10 bucks to cut a lawn. Now you're on par with the neighbors 14 y/o kid who also cuts lawns or 10 bucks.

[TGCummings]

That's all factored in, Jon, thanks. I think it's extremely important to break down every aspect of your business and find a profitable rate to work by; one that's suited to your market. I think that's far more important than assigning an arbitrary minimum rate.

Or, to look at it another way, let's say I am only making $10 after costs to cut that 20 minute lawn. Doesn't that mean I am then netting $30/hour? Doesn't it also mean that I'm getting more than a 60% profit margin? And then what happens when I get the one across the street for the same rate? And the one next door? Each one is taking me only 10-15 minutes longer (no stop time now, remember!) and I'm still getting another $16 each. Now I'm getting $48 for 35-50 minutes of work, and improving my profit margin. I can easily cover costs and make an extremely agreeable profit this way.

Would I rather run a Z and cut in measurements of acreage at a minimum rate of $35? Probably so, but it's not the way my market is set up. Do I suggest you switch to a 21" and drop your minimums? Nope, your market works just fine for your setup.

Do I understand my market and how to price for profit in it? Yes, I do. Unfortunately, I'm in a market where 95% of my competition will charge $10 for that same $16 lawn and they'll think they're making a profit. They're not, but it does limit how much more I can raise my rates and makes it harder to close my sales.

However, I'm not making it any harder for you to close your sales. Even if I was in your market, charging according to my policies, I would be charging $74 for a quarter-acre cut. Wouldn't work, would it? You'll cut that same quarter-acre for $35. Same thing would happen if you came to my market. You'd want $35 for a 1500 square foot lawn, and nobody would be buying because I can cut them with my 21" mowers for less than half (and make a good profit!).

I know we've had this conversation before on these boards, but eventually I'm gonna get through. ;)

[RMDoyon]

TG,
You have explained your business very well and obviously have systems and metrics in place.

As a solo operator I too have been developing systems to make my time as productive as possible.

I have learned that when ou want the job badly you often don't get the sale.

You have proved that the system works as is don't be tempted to tweak it too much. Just keep marketing aggressively and run as many prospects through the mill as possible and you will reach your number.

Roger

[TGCummings]

Originally posted by RMDoyon
You have proved that the system works as is don't be tempted to tweak it too much. Just keep marketing aggressively and run as many prospects through the mill as possible and you will reach your number

Thanks, Clipper! Votes of confidence like that I can use! :D

[heygrassman]

For years, I've stuck to my guns about my "take it or leave it" rate for additional services but this one stuck with me. You see, he's a local politician (sheriff's candidate) and I know he speaks to hundreds of people a week. When landscaping comes up I wanted to think the words coming out of his mouth were "I know a guy who's great, very professional and reasonable".

This would be great as a reference, however, make sure by tweaking the price it does not turn into


"I know a guy who's great, I told him is price was too high and he immediately dropped it to get the business. Dont trust his first quote, there is room to negotiate.".

Just 1 person opinion. Good Luck..

[TGCummings]

You're absolutely right, Grassman. When we called him we told him a reduced rate would mean reduced services. He would still like to know what we'll do for under $100/month, which isn't much more than we're doing right now. He won't get any hand-weeding. He won't get any shrubs or bushes trimmed. He'll basically get mow, blow, and go plus a little extra upkeep in the front yard.

I think Landscraper called it right. He'll just be calling for these services later, when they're really out of hand and in need of extra $$ to get them back in shape...

[HOMER]

All I can add is that you California guys would freak slam out if you came to my neck of the woods and saw what we were paid for the size lawns we do!:rolleyes:

I bid $1530.00 a month for eight...........yes (8) commercial properties and did not get the bid. They were scattered out in 4 different surrounding towns.

You got to cut a lot of grass down south to make the kind of money other parts of the country get.

Then there are the nay sayers that wonder why we don't offer the full package? We can't stop long enough to haggle about prices, if we ain't cuttin' we ain't payin' bills.

Do one thing and do it well.............and fast!

If I were you TG I would not roll all the services into a package but charge a flat hourly rate for any additional services. The time you've already spent trying to convince this guy you weren't ripping him off could have been spent on maintenace or another mowing bid. Steady money wins in the end..........at least for me.

[TGCummings]

Originally posted by HOMER
Do one thing and do it well.............and fast!

If I were you TG I would not roll all the services into a package but charge a flat hourly rate for any additional services. The time you've already spent trying to convince this guy you weren't ripping him off could have been spent on maintenace or another mowing bid. Steady money wins in the end..........at least for me.

Oh, I agree. 90% of what I do is cut grass, but I can do the additional services so I offer them.

You're right in that I've spent too much time on this guy. It was one of those that I really wrapped my head around and it got to me. I know better, but sometimes it happens anyway... :angry:

As for charging a flat hourly rate, I find that most folks will pay $180 for a good trimming job that takes me 3-4 hours, but nobody wants to pay $45-$60 an hour. Figure that one out... ;)

[ADMowing]

TG,

Pricing is the same down here in Florida, it sounds like. We DO get paid year 'round though and that helps us a lot. You are right in that no one wants to pay for other services, so we just stick to the basics during the summer and in the winter months (Oct - Mar) we offer to do light landscaping work. We did just quote on a job to put in a planter around an oak tree for a customer for $80. That was for labor (for two people). He had to buy the stones and dirt and flowers, etc... He said we were charging too much. We really like him a lot and wanted to do him a favor by charging him a low rate (since he is already a customer). Go figure!

When we drop our gate, we usually do 3-5 yards at a time in a residential area and 20-30 in a mobile home park. Neighbors like our work and hire us, so we don't have to travel much. We've set up our schedule so that we are not driving all over the place to get to the next customer. The going rates here are $50-$70 for a medium sized residential lawn. The more we have to weedeat, the more we charge.

We drop the trailer, scoot out on the ZTs, mow several yards at $60/month, weedeat, edge, blow them off and we're gone -- One hour or less. So if we do 4 lawns at $60/month.. that is $240/month divided by 4 weeks = $60 divided by 1 hour of work (or less) = $60/hour gross. That is how we have figured it for our business. We are a small mom and pop, but professional nonetheless, and we make the green stuff!

It is difficult to explain to others not in this type of market about our rates and why we do it the way we do. We would get NO customers if we bid higher -- not around here. My dad did this type of work in Duxbury Mass. and he made LOTS more on each job than we do, but he also didn't get paid year 'round.

Around here, we price our services in line with what other services are charging. We don't worry about lowballers because our work is good and last year we had to turn people away. More power to the scrubs... We've decided to start a waiting list. If a customer moves up north to be with the kids and we have an opening, we call the next prospective customer on the list.

[TGCummings]

Originally posted by ADMowing
My dad did this type of work in Duxbury Mass. and he made LOTS more on each job than we do, but he also didn't get paid year 'round

Y'know, I think that might be the essential difference. With an 8-month cutting season you have to charge more so the entire scale for the area goes up. You have to make in 8 months what we year arounders make in 12. Strangely enough, it seems the shorter the cutting season the larger the properties (can't figure out why that is, but it really seems to be the case) thus the $35 minimums for those lots. It's worth it to an LCO to set those minimums when primarily what they see is 1/4 acre and larger lots. If we set those minimums, we go work fast food because no one's buying our stuff!

Thanks for the reply, AD. I was beginning to think it was just a California thing. ;)