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newjerseylandscaping
01-01-2011, 02:51 AM
Im was just wondering if anyone has done this. ive spent the last few days figuring out the hourly rate for my buisness. my brother walks in and says why not get an estimate for our house and use that as a guide? i thought that would be kind of a Not so good move but have any of you done this? thanks.

Patriot Services
01-01-2011, 10:04 AM
Would you appreciate somebody wasting your time? Besides 5 different company's are going to give 5 different prices. You were right figuring what number YOU need. Sharpen your sales skills. The money is in full service not mowing dirt and weeds.
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lukemelo216
01-01-2011, 02:49 PM
agreed figure out your own hourly rate then go from there. IF you plan on working 20 hours per week and have 2k in bills per month then plan on charging 25/hour to break even. I like to know what profit im making and where all my money is going. But me I try not to worry about the competition and just do things myself. If my customers say well abc company is 5$ lower per cut. I just politly explain that I dont know what the other companies charge, and I dont wish too. I know what it costs me to run my business and what I need to make. That is also why I have a sliding price scale. I use a 20-60% profit markup. So if I am breaking even at 25/hour I will sell a customer anywhere from 30-40/hour. I just try to feel them out a little bit, and you can usuall tell if they are cheap or actually willing to pay for quality service.

wbw
01-01-2011, 03:02 PM
It is the height of stupidity to NOT shop your competition. You are in business to succeed. Aren't you?

Patriot Services
01-01-2011, 03:06 PM
It is the height of stupidity to NOT shop your competition. You are in business to succeed. Aren't you?

So your saying you need the competition to tell you what to charge?
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JB1
01-01-2011, 03:22 PM
I have all the newbie's call me every spring, it aint hard to figure out what they want, I don't play the game with them.

lukemelo216
01-01-2011, 03:22 PM
I generally know what my competition charges becasue Ive heard it enough, but Im not going out of my way to find out. I put the blinders on when it comes to them. I try not to sell on price but rather service. Thats why i have the tired scale. I charge what I need to charge to pay my bills and make a decent profit. Using the competitions price is price fixing which is against the law.

Business is quite simple.......Know YOUR cost, add an acceptable markup, and provide a quality service.

I know im probably guilty of it when i first started, but now that i have been in business a few years i just dont worry about their prices, or come on hear or plow site and ask what my number should be. I may ask for an opinion on it but if i do i give great detail on it such as what the hourly rate im charging and what the times are i believe the service will be completed in. I strongly suggest looking into ALMA. Great asset to help you grow your business. Tommy Ganz teaches you determine your hourly rate and just stick to it, thats what you need to make to financially succedd.

However, if you have a common knowledge of the going prices in your area and just to make a simple 20% markup your still charging 15$ more then the competition i would recommend reevaluating your pricing and where you can cut some costs.

newjerseylandscaping
01-01-2011, 03:35 PM
I figured, I dont plan on doing this belivee me, when my brother introduced the idea i thought he was nuts, now i know he is nuts. HAHA

Darryl G
01-01-2011, 03:42 PM
I get calls every spring myself...people wanting to know how much I would charge to mow their lawn but don't want to give me their name or address...I figure it's new guys wondering how much to charge.

I have some friends in the business that I'll compare pricing with but I woulnd't go calling my competition and having them give me a quote.

xclusive
01-01-2011, 04:28 PM
As stated by other people I think you should figure out your on cost and base your price off of that but at the same time you should have any idea on what the going rate is in your area.

wbw
01-01-2011, 11:03 PM
So your saying you need the competition to tell you what to charge?
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Your competition already tells you what to charge. If you don't think they do then triple your prices tomorrow.

Your competition and your customers dictate what range you can charge in. Your cost do not have anything to do with this. If you use a transport company to deliver your platinum plated mower to the job and pay your employees $100K a year each and you know to the penny what it cost you to operate, you will still not have any work. Knowing your cost will help you make money only because you can't control your cost if you don't know your cost. Just don't kid yourself into thinking that your cost have some bearing on what you charge...that is determined by the marketplace (your competition).

walker-talker
01-01-2011, 11:16 PM
I have all the newbie's call me every spring, it aint hard to figure out what they want, I don't play the game with them.

Same here, and I can always tell who they are when they INSIST that you give them an estimate over the phone.

Darryl G
01-01-2011, 11:24 PM
Your competition already tells you what to charge. If you don't think they do then triple your prices tomorrow.

Your competition and your customers dictate what range you can charge in. Your cost do not have anything to do with this. If you use a transport company to deliver your platinum plated mower to the job and pay your employees $100K a year each and you know to the penny what it cost you to operate, you will still not have any work. Knowing your cost will help you make money only because you can't control your cost if you don't know your cost. Just don't kid yourself into thinking that your cost have some bearing on what you charge...that is determined by the marketplace (your competition).

True to a degree but lawn care is a service, not a commodity. Therefore for are variations in the level of service and pricing. Some customers are looking for a higher level of service and are willing to pay a higher price for it. It's more of a value thing than a price thing. My customers are willing to hire me over a cut-rate service provider because they like me, my service and my dedication to quality. So yes, there is only a certain range of prices that people are willing to pay (the market), but there is a range, and there is a higher cost associated with providing a higher level of service, so cost does come into the equation.

lukemelo216
01-02-2011, 01:58 AM
i also agree. Thats what I was trying to get at earlier that I know what my competition charges, however; i try not to really concern myself with it and i would rather just worry about myself really. But if you know that your competition is charging 55$/hour and your out there and you need to charge 80$/hour to make a small profit your not going to get any work, therefore needing to cut some major costs.

This is one of those things that your beging to aquire as your start to grow. When I started I didnt know anything about pricing just like im sure 90% of the other guys on this site didnt. but when you start talking to clients and submitting quotes potential clients will say well your 10$ more per cut then abc and 5$ lower than xyz etc. I know I wouldnt want to waste my time nor would I want to waste my competitions time playing around like that.

Just know your costs and add a fair markup on them (35-70% usually). You may only sell 1 or 2 jobs all year at 70% and over 90% of your jobs in the 50-60% range. once you realize that then you know that, thats a fair market price and what you should try to sell all your jobs at, virtually eliminating the lower markups. I usually only sell lower markups to other contractors (If im a sub or for government work (schools villages etc.)