PDA

View Full Version : If you were starting a new business today, what would your pricing be?


sedge
01-25-2011, 07:44 PM
Here is the situation. My son who was in college decided that he didn't like engineers school and he wants to get back into lawn care. I have tried to talk him out of it, but he really likes to do it, so i am helping him get started.

We have no debt on our place and he lives with us. Just bought a new enclosed trailer, truck and equipment.

We live 15 minutes from one of the higher income area's in the state and the economy has been pretty good here.

I started a lawn care service back in 2005, we started in the spring with zero customers and ended the year with just under 400. We were priced at $25 per 10k lot (which is about 5k in grass) for mowing, edging, line trimming and blowing for weekly service. 3 man crews were doing about 1k in revenue per day and the average price per lot was about $34 bucks.

I know what it costs to run this business and can even make money at $20, but surely do not want to mow for that, nor will we, but we want to be able to pick up work at a decent clip.

What would you guys price yourself at in the current market, if this was your first year with no debt and all new equipment?

Thanx

4 seasons lawn&land
01-25-2011, 08:56 PM
cost of op plus profit to make it worth it

purdue37
01-25-2011, 09:14 PM
A. Income generated through this line of work is great, but giving up an education to pursue this is short lived.

B. Assuming that you can pull 1k per day per crew is fairly ambitious and will not scale to the point in which you can work a computer as opposed to a lawn mower.

C. I have an MBA and a B.S. from a reputable school and only after months of work did I decide that I could make this industry make money for me.

D. I run 65 five guys in mainly two man crews, as you pick up zero marginal value on the third guy, a couple of enhancement crews, three chemical applicators, and never in my wildest dreams would I let my son venture from education into manual labor.

E. Education provides you with the ability to be a business owner and not a 'cutter'

F. Unless community college was the option given up.

JDUtah
01-25-2011, 09:20 PM
35 to 45 per mow for 5,000 sqft of turf. 25 is much to low if you ask me. 333 per guy per day is kinda low too IMO.

But, you are saying you were mowing 80 lawns a day? (400 weekly accounts) with just a three man crew? If you were really cranking out those numbers then heck, 25 might not be bad after all. (including drive time, your numbers say you spent 6 to 9 minutes per lawn) Also note... 400 accounts, or 80 per day multiplied by 25 per mow is 2k income per day, not 1 k

sedge
01-25-2011, 09:35 PM
A. Income generated through this line of work is great, but giving up an education to pursue this is short lived.

B. Assuming that you can pull 1k per day per crew is fairly ambitious and will not scale to the point in which you can work a computer as opposed to a lawn mower.

C. I have an MBA and a B.S. from a reputable school and only after months of work did I decide that I could make this industry make money for me.

D. I run 65 five guys in mainly two man crews, as you pick up zero marginal value on the third guy, a couple of enhancement crews, three chemical applicators, and never in my wildest dreams would I let my son venture from education into manual labor.

E. Education provides you with the ability to be a business owner and not a 'cutter'

F. Unless community college was the option given up.

One can lead a horse to water, but you cannot make them drink....

i did tie it in that he has to attend night business classes and we will also be doing fert in squirt. Mowing is how we will get in the door and keep us busy until we are busy enough with fert n squirt.

35 to 45 per mow for 5,000 sqft of turf. 25 is much to low if you ask me. 333 per guy per day is kinda low too IMO.

But, you are saying you were mowing 80 lawns a day? (400 weekly accounts) with just a three man crew? If you were really cranking out those numbers then heck, 25 might not be bad after all. (including drive time, your numbers say you spent 6 to 9 minutes per lawn) Also note... 400 accounts, or 80 per day multiplied by 25 per mow is 2k income per day, not 1 k

No, had more then one crew. Me and my one son could do nearly 1k a day ourselves, but it took 3 guys to do what we could do in 10 hours. They would maybe get a bot more done, but not much.

$35 to $45 in this economy would get us about zero lawns. maybe once we are up and running and they see our quality, but not for a new guy.

I am thinking between $27.50 and $30 to start until we are about half to 75%full, then add $5 to what ever we were charging.

Barefoot James
01-25-2011, 09:45 PM
So what happened to those 400 accts? Why did you get out if it was so good and you seem to already know what you need.

sedge
01-25-2011, 10:08 PM
So what happened to those 400 accts? Why did you get out if it was so good and you seem to already know what you need.

You ever work with an over bearing brother? We had just under 600 accounts when I left in 2008. Left with nothing, and he had 75 left in spring of 2009......:laugh:

We disagreed on how to run it, so I let him run it.

StihlBR600
01-25-2011, 10:31 PM
Ok so how the hell do you get 400 accounts in one season? I would love you know your secret besides buying all of them

punt66
01-25-2011, 10:38 PM
Obviously its because he is too cheap. I know markets are different but i will not drop my gate for less then $37 now.

sedge
01-25-2011, 10:42 PM
Ok so how the hell do you get 400 accounts in one season? I would love you know your secret besides buying all of them

Didn't buy any. I said we were starting our prices at $25 back in 2005. Door hangers with price on door hanger.

Obviously its because he is too cheap. I know markets are different but i will not drop my gate for less then $37 now.

What was your price in 2005?

I think that is your bagged price, right? We would bag some as well in 2005, price was $35. $10 extra to bag.

if you were starting today, with the economy being tight, what would you charge? You have no word of mouth or customer service to fall back on, your brand new to the market, please remember that when replying.

punt66
01-25-2011, 10:49 PM
Didn't buy any. I said we were starting our prices at $25 back in 2005. Door hangers with price on door hanger.



What was your price in 2005?

I think that is your bagged price, right? We would bag some as well in 2005, price was $35. $10 extra to bag.

if you were starting today, with the economy being tight, what would you charge? You have no word of mouth or customer service to fall back on, your brand new to the market, please remember that when replying.

i only bag in the fall and spring. That is a straight cut price. I understand where your coming from. To build a good running business doesnt happen overnight. If you come in under market prices you will get cheap skates and pitas. I was carefull growing mine and my turnover rate is nill. I turn down work regularly from my current customers referals. In 2005 my min was $32. If you got 400 accounts in 1 year you were way too cheap.

dKoester
01-25-2011, 11:05 PM
$25 X 400 = 10000 for cutting once. 2 man crews are very efficient when well trained. 25 lawns per crew each day. I would need just 4 crews, the last one would do landscaping, mulch, bush trimming, cleanups etc.

sedge
01-25-2011, 11:46 PM
i only bag in the fall and spring. That is a straight cut price. I understand where your coming from. To build a good running business doesnt happen overnight. If you come in under market prices you will get cheap skates and pitas. I was carefull growing mine and my turnover rate is nill. I turn down work regularly from my current customers referals. In 2005 my min was $32. If you got 400 accounts in 1 year you were way too cheap.

I understand. Is it better to sit around waiting to be full for a year or 2 and be at $35, or is it better to be busy right away and then raise your prices, drop PITA's. I guess that is the question.

StihlMechanic
01-25-2011, 11:51 PM
Where abouts are you?

sedge
01-26-2011, 12:36 AM
Where abouts are you?

Oklahoma..........

lyndont
01-26-2011, 01:00 AM
Ha I am about 25 miles from Tulsa and can tell you that you will never get 400 accounts in a single year or anywhere close unless your working for free. Every other truck on the highway is loaded with mowers and most people here either mow their own lawn or they can't afford to pay for a decent service. There are a lot of people doing this here that are not legit at all and charge 15 20 a lawn. That's why I still have a full time job and probably will for a few more years. That's alright with me though because I am targeting good customers that I feel will stay loyal. Oklahoma is a very tough market though.
Posted via Mobile Device

Landscape Poet
01-26-2011, 01:09 AM
I understand. Is it better to sit around waiting to be full for a year or 2 and be at $35, or is it better to be busy right away and then raise your prices, drop PITA's. I guess that is the question.

Sedge,

I think your son is getting in at a poor time but not the worst time. I think the last couple of years have been the worst and things are getting slightly better now.

My suggestion would be to get your son into the market and grab market share to make a wage. Once he is out and about, his quality can grab him the customers he is wanting and then he can drop any PITAs he has picked up along the way, and raise prices slowly (% of customers he can afford to lose).

As you would with any newbie on here remind him just because his equipment is paid for now - his future equipment is not. Have him sit down with you and figure out what he is going to have to just to break even. Then have him figure out what he is going to have to bring home to pay for future equipment, insurance, his own place (both to live and to operate out of).
Young men sometimes confuse cash flow with profit. Make sure he understands the taxes he is going to have to pay. I would of course make him buy his own health insurance plan too if he was my son and wanted to give up a chance on school to pursue this line of work. Make sure he clearly sees all the barriers in the road before he jumps in.

h2oskier
01-26-2011, 01:27 AM
Sedge,

I think your son is getting in at a poor time but not the worst time. I think the last couple of years have been the worst and things are getting slightly better now.

My suggestion would be to get your son into the market and grab market share to make a wage. Once he is out and about, his quality can grab him the customers he is wanting and then he can drop any PITAs he has picked up along the way, and raise prices slowly (% of customers he can afford to lose).

As you would with any newbie on here remind him just because his equipment is paid for now - his future equipment is not. Have him sit down with you and figure out what he is going to have to just to break even. Then have him figure out what he is going to have to bring home to pay for future equipment, insurance, his own place (both to live and to operate out of).
Young men sometimes confuse cash flow with profit. Make sure he understands the taxes he is going to have to pay. I would of course make him buy his own health insurance plan too if he was my son and wanted to give up a chance on school to pursue this line of work. Make sure he clearly sees all the barriers in the road before he jumps in.

Best Damn advice i have seen given to anyone. Way to go Mike.

Puddle of Oil
01-26-2011, 01:53 AM
Subscribed!

justanotherlawnguy
01-26-2011, 02:29 AM
lets see you already started a biz and had 400 accounts in the first year, and your asking for pricing info on a web forum....good luck go back to those same people and tell them that you are offering "throwback to 2005 pricing" gas is more expensive now, so it might work...

btw, i would not want to be starting a new lawn biz now anywhere. no business is in the toilet.......

coolluv
01-26-2011, 06:21 AM
You ever work with an over bearing brother? We had just under 600 accounts when I left in 2008. Left with nothing, and he had 75 left in spring of 2009......:laugh:

We disagreed on how to run it, so I let him run it.

Your business lost 525 customers in one year? I find that hard to believe.

Id love to hear how that is even possible.

Dave...

sedge
01-26-2011, 08:29 AM
Sedge,

I think your son is getting in at a poor time but not the worst time. I think the last couple of years have been the worst and things are getting slightly better now.

My suggestion would be to get your son into the market and grab market share to make a wage. Once he is out and about, his quality can grab him the customers he is wanting and then he can drop any PITAs he has picked up along the way, and raise prices slowly (% of customers he can afford to lose).

As you would with any newbie on here remind him just because his equipment is paid for now - his future equipment is not. Have him sit down with you and figure out what he is going to have to just to break even. Then have him figure out what he is going to have to bring home to pay for future equipment, insurance, his own place (both to live and to operate out of).
Young men sometimes confuse cash flow with profit. Make sure he understands the taxes he is going to have to pay. I would of course make him buy his own health insurance plan too if he was my son and wanted to give up a chance on school to pursue this line of work. Make sure he clearly sees all the barriers in the road before he jumps in.

Good post!

lets see you already started a biz and had 400 accounts in the first year, and your asking for pricing info on a web forum....good luck go back to those same people and tell them that you are offering "throwback to 2005 pricing" gas is more expensive now, so it might work...

btw, i would not want to be starting a new lawn biz now anywhere. no business is in the toilet.......

Yes and why shouldn't I be asking here on this forum? The economy is very different from the one I left.

Thought of that, but the reason my brother lost all those accounts was his treatment of them after i left. So me using his old name might not provide such good results.

Your business lost 525 customers in one year? I find that hard to believe.

Id love to hear how that is even possible.

Dave...

No, I did not lose them. My brother always told every one that it was his bsuiness and when i left, I left with nothing from the business.

Yeah I know, that is what i thought too. Actually it was more like 6 months. Hard to keep customers when spring rolls around and you don't service them on a regular basis.

mezammit
01-26-2011, 08:54 AM
Sedge,
A lot of people on here are not believing what you are telling but it is up to you on how you take it. 400 Accounts in one year is hard to believe but that was 6 years ago so anything is possible.
Yard Works gave some of the best advice that I have seen so far. As he said sit down with you son and explain everything to him. I would try to stay away from your brothers name when picking up new customers any bad taste that was left in there mouth they are sure not to forget.

Clark Griswold
01-26-2011, 09:03 AM
My pricing would be the same as today, always a little higher than everybody else, take it or leave it!

sedge
01-26-2011, 09:06 AM
Sedge,
A lot of people on here are not believing what you are telling but it is up to you on how you take it. 400 Accounts in one year is hard to believe but that was 6 years ago so anything is possible.
Yard Works gave some of the best advice that I have seen so far. As he said sit down with you son and explain everything to him. I would try to stay away from your brothers name when picking up new customers any bad taste that was left in there mouth they are sure not to forget.

First point, that's fine, no skin off my arse.

Second point, I agree.

So guys, where would your pricing be?

sedge
01-26-2011, 09:12 AM
My pricing would be the same as today, always a little higher than everybody else, take it or leave it!

So if you were just starting out, you would charge a little more then everyone else?

coolluv
01-26-2011, 09:41 AM
Easy there big fella, you don't have to impress me. Your story just doesn't make sense to me. Do you have your own business now? If so how are you pricing your own accounts?

I will say this, if you advertise cheap prices you will mostly only attract cheap customers. Servicing 80 $25 lawns a day for very little profit is not what I personally want to do. Last season I tried to lower my prices a little to compete with the illegals and Hill Billy's and I can tell you from my own experience that that strategy does not work. Will you get more customers? Yes, are they worth a dam? No.

Here's why. These types of customers do not refer you, they also don't care about their property so nothing extra, just the bare minimum. They don't want weekly service and will cancel you for little Johnny or the illegal that offers to work cheaper than you.

They call to skip the lawn all the time, they are the least profitable customer you can have. Just when you think you have a decent route and customer base, then the phone calls start to cancel service, so you wasted your time working for them and they are a short term customer. So now you lose valuable time trying to fill those empty slots and by the time that happens the season is in full swing and most have already have a lawn service and your $hit out of luck trying to get more. I could go on and on.

You are much better off starting and growing slowly and building a quality route of customers than going the lowball route. If anyone thinks they are going to acquire enough business their first year or even their second year, that is going to give them enough business to survive on, well think again. If I were you I would do what I could to change your sons mind about starting down this road at this time in this overly, overly, overly saturated business.

2005 was a totally different time and it may as well been a hundred years ago compared to today's market and job opportunities. Meaning there were more people that were buying houses and the economy was like night and day compared to today's reality. You have more new start ups then ever before and more illegals than ever before and you have less potential customers than ever before.

Those are the facts. If he can afford to starve for a few years he may be able to make it after about 3 or 4 years, if the economy picks up and more drop out of this line of work instead of what is happening today, which is more are coming in then going out.

If your an established business then you can hang on if you do everything right, but trying to get started right now....good luck. If he does decide to pursue this line of work, keep us updated because I would love to know the outcome as I already suspect what the out come will be.

Get that boy in college and forget about being another starving lawn guy.

He will thank you later.

Dave...

coolluv
01-26-2011, 09:54 AM
I will add another little bit of info. I have a neighbor who has been around this business for 13 going on 14 years. He charges lowball prices on everything. Everything he has is worn out pieces of junk, and every time my phone rings and I see it is him I know what is coming, hey Dave such and such is broke can I borrow this or that or hey I'm broke down at such and such can you come and give me a ride or tow my truck?

Is he busy? Yes. Is he making money? Yes. But not much. We talk about prices and what he charges for different things and sometime he makes very little money or breaks even, and then B454ches about it. The only reason he is still in business is he don't owe anybody anything. I just talked to him recently and he may be calling it quits because he don't want to buy new equipment and trucks because he doesn't have the money and he is tired of busting his @$$ for very little return. He works sun up to sun down most of the year, to me that is crazy.

If that is the kind of lifestyle you want, then have at it. If I can't make it by charging a fair price and make a decent profit, then its time to move on. I'm kinda stuck doing this for right now,but time will tell if I continue. If things don't go well this year I may throw the towel in myself.

There are much more profitable ways to make a living, this is one of the easiest business to start and one of the hardest to make a living at.

Dave...

sedge
01-26-2011, 09:58 AM
Easy there big fella, you don't have to impress me. Your story just doesn't make sense to me. Do you have your own business now? If so how are you pricing your own accounts?

I will say this, if you advertise cheap prices you will mostly only attract cheap customers. Servicing 80 $25 lawns a day for very little profit is not what I personally want to do. Last season I tried to lower my prices a little to compete with the illegals and Hill Billy's and I can tell you from my own experience that that strategy does not work. Will you get more customers? Yes, are they worth a dam? No.

Here's why. These types of customers do not refer you, they also don't care about their property so nothing extra, just the bare minimum. They don't want weekly service and will cancel you for little Johnny or the illegal that offers to work cheaper than you.

They call to skip the lawn all the time, they are the least profitable customer you can have. Just when you think you have a decent route and customer base, then the phone calls start to cancel service, so you wasted your time working for them and they are a short term customer. So now you lose valuable time trying to fill those empty slots and by the time that happens the season is in full swing and most have already have a lawn service and your $hit out of luck trying to get more. I could go on and on.

You are much better off starting and growing slowly and building a quality route of customers than going the lowball route. If anyone thinks they are going to acquire enough business their first year or even their second year, that is going to give them enough business to survive on, well think again. If I were you I would do what I could to change your sons mind about starting down this road at this time in this overly, overly, overly saturated business.

2005 was a totally different time and it may as well been a hundred years ago compared to today's market and job opportunities. Meaning there were more people that were buying houses and the economy was like night and day compared to today's reality. You have more new start ups then ever before and more illegals than ever before and you have less potential customers than ever before.

Those are the facts. If he can afford to starve for a few years he may be able to make it after about 3 or 4 years, if the economy picks up and more drop out of this line of work instead of what is happening today, which is more are coming in then going out.

If your an established business then you can hang on if you do everything right, but trying to get started right now....good luck. If he does decide to pursue this line of work, keep us updated because I would love to know the outcome as I already suspect what the out come will be.

Get that boy in college and forget about being another starving lawn guy.

He will thank you later.

Dave...

yes cheaper prices will attract more PINA's, no doubt. I too would not want to pay people and do it for $25, but he is not going to be paying anyone to start. As far as call in's go to cancel, most have sprinkler systems, so that is usually not an issue. if they do call in, they get charged the EOW price which is $10 more.

Economy is very solid here. i have talked to several guys that have been in it and they all grew or held steady last year. Some illegals of course, but the state is making it harder and harder for them to be here, so that helps.

Now lets us do the math for the $25 dollar yard.

Average price will be closer to $33 then $25.

So; $33 x 12 per day = $396 x 5 days a week = $1,980 per week x 29 weeks = $57,420 gross.

Like i said, you raise your prices as you start to fill up for all your new clients and you drop the pain in the arses. He doesn't want any extra stuff, just wants to mow.

The school thangy, I have talked until i am blue in the face about it to him, but he did agree to take night classes, so we will see.

coolluv
01-26-2011, 10:21 AM
See that's all good in theory and on paper, and that is how everyone does it in their mind when they are starting out. I did too. I read all the post on lawnsite and I talked to my neighbor ( who by the way is the biggest bull$hitter) about going into this business. All seemed easy. Throw out a few thousand fliers and whaallaa rolling in the dough.

Not that easy. Let me open the eyes of the newbies that are stuck on their computers reading all the success stories on here and are counting the lawns and putting pencil to paper(just like your example). It does not work out that way. Let me say that again, It does not work out that way!

You can count all you want and figure all you want, but the amount of Actual cuts you make vs what your little piece of paper say, are two totally different things.

Skips, rain, cancellations, non paying customers that you have to drop, the list goes on. All of the hidden or unforeseen things happen that you did not plan for. Those numbers will not add up at the end of the season, I will guarantee it. Now as far as the people you talked to... well take what they say with a grain of salt. Most guys on here or anywhere are full of $hit and will lie to make themselves feel better and to impress you. That is a fact. If I called everyone out on here that I knew was a bull$hitter I would get cramps in my fingers and would have to file for Disability insurance. If you have an established business that was around during the good times and have established a customer base and have branded you company, then yes you would either have stayed the same or lost a little or perhaps even grown a little the last few years. But starting from scratch is a whole other story.

Ive talked to guys that I ran into while out working and I can tell you stories that would make you laugh your #ss off. It is human nature for people to Lie, they do it all the time. No one wants to be a failure or tell people they are struggling or just getting by. So they Lie.

You new guys take my advice and don't believe what people tell you or what you read on here.

Your numbers sure look good but reality is a different thing all together. 1 bird in the hand is worth more than 2 in the bush. Don't count your chickens before they hatch.

One thing about all of those old sayings is, They are all true.

Dave...

Agape
01-26-2011, 10:29 AM
Your business lost 525 customers in one year? I find that hard to believe.

Id love to hear how that is even possible.

Dave...

Crack addiction.

if you got 400 accounts in the first year, just do the same thing without your brother.why are you even asking? you know what kind of expenses you had. thats a wierd question to ask.

justanotherlawnguy
01-26-2011, 10:35 AM
You sound like an idiot! You have bashed every reply you have gotten. Figure out your own pricing!!!

You have been in biz before and have a low ball buddy, figure it out yourself.

No wonder your kid dropped out of "engineering" school, he's not too bright.
Posted via Mobile Device

Agape
01-26-2011, 10:53 AM
yes cheaper prices will attract more PINA's, no doubt. I too would not want to pay people and do it for $25, but he is not going to be paying anyone to start. As far as call in's go to cancel, most have sprinkler systems, so that is usually not an issue. if they do call in, they get charged the EOW price which is $10 more.

Economy is very solid here. i have talked to several guys that have been in it and they all grew or held steady last year. Some illegals of course, but the state is making it harder and harder for them to be here, so that helps.

Now lets us do the math for the $25 dollar yard.

Average price will be closer to $33 then $25.

So; $33 x 12 per day = $396 x 5 days a week = $1,980 per week x 29 weeks = $57,420 gross.

Like i said, you raise your prices as you start to fill up for all your new clients and you drop the pain in the arses. He doesn't want any extra stuff, just wants to mow.

The school thangy, I have talked until i am blue in the face about it to him, but he did agree to take night classes, so we will see.

sedge, you ask for pricing but you're convinced that your 25/ lawn is the way to go, so do it for that, no one really cares, and you're set in what you want to do. You just want someone to tell you what you've already made up your mind to do.

I can tell you that I am a higher price in my area, but lower than some of the huge landscape companies. I only got 24 accounts this year (my start up year) and my gross for the year is over $65K and I have no desire to do 60 accounts for $57,420 gross

If you charge a higher price than the scrubbs, you will get a discouraging % of "no"s, but you will still get a %. If that = 40% , and you get 20 "yes"s per 50 estimates; then you will get 40 for 100 estimates. market yourself better, so that you're giving more estimates. don't try to position your self to get as few "no"s as possible.by undercharging.

or do 60 accounts for nothing.

Agape
01-26-2011, 11:00 AM
Sure he won't pay someone(worker) in the beginning, but if he doesn't charge as if he's bringing a couple guys,he won't be able to bring someone on for what he's charging to do it by himself.

coolluv
01-26-2011, 11:06 AM
How did we go from $25 to $33? That is a $7 difference and in this lowball economy that $7 is going to be huge. I never went under $35 before last year and lowered my price for small lawns to $30 hoping to pick up more work. Well yeah I picked up more work but from the wrong type of customer. Most of the $30 lawns I picked up didn't last, either they canceled for someone willing to go to $25 or someone came along and did full service for that $30. Usually the illegals.

There is no lowball, Walmart strategy that is going to work in this business, you will be working for minimum wage and wearing out your body, truck, equipment and soon enough you will be like the thousands that try that every year. Out of business.

Look at the guys that called it quits and are selling all their stuff because they figured out that maintenance is a low profit, low margin business. If all your son wants to do is mow and blow, then good luck. Any customer worth while is going to want full service, the type that want mow,blow and go are going to be the worst customer you can get.

Trust me I know.

Dave...

coolluv
01-26-2011, 11:15 AM
Here is a little good information for you new guys. If a customer is basing their decision to hire you or someone else on price not quality or professionalism, then they are not the customer you want.

The businesses that have longevity in this business are the ones that price to make a profit, don't take on bi weekly customers or price shoppers and sell quality and service and professionalism and knowledge. They pre qualify customers on their website or during the initial conversation. They don't waste their time on customers that price shop or can't afford the service to begin with.

That is good advice that you newbies can learn from. Trust me.

Dave...

STL Cuts
01-26-2011, 12:11 PM
How did we go from $25 to $33? That is a $7 difference and in this lowball economy that $7 is going to be huge. I never went under $35 before last year and lowered my price for small lawns to $30 hoping to pick up more work. Well yeah I picked up more work but from the wrong type of customer. Most of the $30 lawns I picked up didn't last, either they canceled for someone willing to go to $25 or someone came along and did full service for that $30. Usually the illegals.

There is no lowball, Walmart strategy that is going to work in this business, you will be working for minimum wage and wearing out your body, truck, equipment and soon enough you will be like the thousands that try that every year. Out of business.

Look at the guys that called it quits and are selling all their stuff because they figured out that maintenance is a low profit, low margin business. If all your son wants to do is mow and blow, then good luck. Any customer worth while is going to want full service, the type that want mow,blow and go are going to be the worst customer you can get.

Trust me I know.

Dave...

Last time I checked $33 - 25$ = $8, not $7 lol sorry to call you out...

T.E.
01-26-2011, 01:40 PM
I don't see how you got 400 accounts in one yr. I've been in biz. a long time and I've never seen that number. I was charging 25.00 for a lawn your size in the 1980's! for crying out loud.

You are way under priced, and helping to lower the market. I gave an estimate in about 05 or 06 for 35.00 and the lady told me you can't mow my lawn for that.(too cheap) I'd rather have fewer accounts and make more per account than more accounts and make less on each one.

I went up on most all of my lawns last year in mid season. I lost one account. You are way low on your prices. I'm getting 40.00 + for lawns of the same size your talking about.

By now as long as you've been around this biz you should know th answers to the questions your asking.

Keep you son in college. He needs you to be his FATHER right now not his BUDDY!

sedge
01-26-2011, 03:18 PM
See that's all good in theory and on paper, and that is how everyone does it in their mind when they are starting out. I did too. I read all the post on lawnsite and I talked to my neighbor ( who by the way is the biggest bull$hitter) about going into this business. All seemed easy. Throw out a few thousand fliers and whaallaa rolling in the dough.

Not that easy. Let me open the eyes of the newbies that are stuck on their computers reading all the success stories on here and are counting the lawns and putting pencil to paper(just like your example). It does not work out that way. Let me say that again, It does not work out that way!

You can count all you want and figure all you want, but the amount of Actual cuts you make vs what your little piece of paper say, are two totally different things.

Skips, rain, cancellations, non paying customers that you have to drop, the list goes on. All of the hidden or unforeseen things happen that you did not plan for. Those numbers will not add up at the end of the season, I will guarantee it. Now as far as the people you talked to... well take what they say with a grain of salt. Most guys on here or anywhere are full of $hit and will lie to make themselves feel better and to impress you. That is a fact. If I called everyone out on here that I knew was a bull$hitter I would get cramps in my fingers and would have to file for Disability insurance. If you have an established business that was around during the good times and have established a customer base and have branded you company, then yes you would either have stayed the same or lost a little or perhaps even grown a little the last few years. But starting from scratch is a whole other story.

Ive talked to guys that I ran into while out working and I can tell you stories that would make you laugh your #ss off. It is human nature for people to Lie, they do it all the time. No one wants to be a failure or tell people they are struggling or just getting by. So they Lie.

You new guys take my advice and don't believe what people tell you or what you read on here.

Your numbers sure look good but reality is a different thing all together. 1 bird in the hand is worth more than 2 in the bush. Don't count your chickens before they hatch.

One thing about all of those old sayings is, They are all true.

Dave...

I am very aware of everything you stated and have dealt with it numerous occasions. I handled all customer service type problems. We dropped people that tried the old cancellation thing, yes there is weather, that is what weekends are for. of the 4 years i did it, we had only one time we missed a week of mowing. Everyone was put on credit card from the day one, so very, very seldom do we have a late payer. They miss one payment and they don't get done.

Crack addiction.

if you got 400 accounts in the first year, just do the same thing without your brother.why are you even asking? you know what kind of expenses you had. thats a wierd question to ask.

Of course it is, every question for know it alls are wired ones. I am just asking experienced guys if they were going to start over today, what would they charge.

You sound like an idiot! You have bashed every reply you have gotten. Figure out your own pricing!!!

You have been in biz before and have a low ball buddy, figure it out yourself.

No wonder your kid dropped out of "engineering" school, he's not too bright.
Posted via Mobile Device

I have not bashed any replies. Ahh, yes, the personal attacks begin.

sedge, you ask for pricing but you're convinced that your 25/ lawn is the way to go, so do it for that, no one really cares, and you're set in what you want to do. You just want someone to tell you what you've already made up your mind to do.

I can tell you that I am a higher price in my area, but lower than some of the huge landscape companies. I only got 24 accounts this year (my start up year) and my gross for the year is over $65K and I have no desire to do 60 accounts for $57,420 gross

If you charge a higher price than the scrubbs, you will get a discouraging % of "no"s, but you will still get a %. If that = 40% , and you get 20 "yes"s per 50 estimates; then you will get 40 for 100 estimates. market yourself better, so that you're giving more estimates. don't try to position your self to get as few "no"s as possible.by undercharging.

or do 60 accounts for nothing.

Not set on $25, just was using it as an example, as that is what we charged before. I am not sure, but the market here would not support those rates, unless your complete maintenance packages.

How did we go from $25 to $33? That is a $7 difference and in this lowball economy that $7 is going to be huge. I never went under $35 before last year and lowered my price for small lawns to $30 hoping to pick up more work. Well yeah I picked up more work but from the wrong type of customer. Most of the $30 lawns I picked up didn't last, either they canceled for someone willing to go to $25 or someone came along and did full service for that $30. Usually the illegals.

There is no lowball, Walmart strategy that is going to work in this business, you will be working for minimum wage and wearing out your body, truck, equipment and soon enough you will be like the thousands that try that every year. Out of business.

Look at the guys that called it quits and are selling all their stuff because they figured out that maintenance is a low profit, low margin business. If all your son wants to do is mow and blow, then good luck. Any customer worth while is going to want full service, the type that want mow,blow and go are going to be the worst customer you can get.

Trust me I know.

Dave...

the largest company on here, well used to be on here any ways is just a mow and blow. Has companies in 5 different metro areas, last i knew was charging $24. Last i knew thay had about 8k lawns, but hey, they don't know jack.

https://just-mowing.com/prices.php

The reason we are looking at blow and go is we will move over to 100% weed control and fertilization. this is just the filler till we get there.

The $8 dollar difference is what the average yard will be, as the base price is set for 8k lot with house or about 4k in grass.

Here is a little good information for you new guys. If a customer is basing their decision to hire you or someone else on price not quality or professionalism, then they are not the customer you want.

The businesses that have longevity in this business are the ones that price to make a profit, don't take on bi weekly customers or price shoppers and sell quality and service and professionalism and knowledge. They pre qualify customers on their website or during the initial conversation. They don't waste their time on customers that price shop or can't afford the service to begin with.

That is good advice that you newbies can learn from. Trust me.

Dave...

the professionalism is all well and good once you have a reputation, but that is not going to help you a whole lot when your starting out.

I don't see how you got 400 accounts in one yr. I've been in biz. a long time and I've never seen that number. I was charging 25.00 for a lawn your size in the 1980's! for crying out loud.

You are way under priced, and helping to lower the market. I gave an estimate in about 05 or 06 for 35.00 and the lady told me you can't mow my lawn for that.(too cheap) I'd rather have fewer accounts and make more per account than more accounts and make less on each one.

I went up on most all of my lawns last year in mid season. I lost one account. You are way low on your prices. I'm getting 40.00 + for lawns of the same size your talking about.

By now as long as you've been around this biz you should know th answers to the questions your asking.

Keep you son in college. He needs you to be his FATHER right now not his BUDDY!

Like i said, i can lead him to water, but i cannot make him drink.

I know you don't know how, but that is not my problem. i did it. I even explained how it was done, but i doubt you picked up on it.

I am not saying $25 is where we would be at, just used it as an example as that is where we were when we started 6 years ago.

StihlBR600
01-26-2011, 03:51 PM
Ok so i dont want to read the novel that was posted. Have we figured out how this guy got 400 accounts in about 7 months? I dont understand. Even if you were lowballing like crazy its just not possibe

dKoester
01-26-2011, 03:57 PM
If you want to work for $25 per small lawn you can. The one thing missing from most on here is a constant marketing strategy used to have a constant inflow of new customers that replace the ones that can't hang along. Working in close knit neighborhoods and knowing your service area bounderies are priority. Most haven't or don't even have a set percentage of income going toward advertising. If they do, it is usually used for a one time event instead of a constant campaign about what your company is up to. I believe that many on here are solo because they lack leadership skills and the courage to grow their companies past solo and into running multiple crews. To everything there is pros and cons. Sometimes to get where you want to go you have to take risk.

StihlBR600
01-26-2011, 04:01 PM
Well ive met a couple of guys that have multiple crews and they said dont expand to much because you hit a point where your not making any more money than before because of all of the other expenses involved

coolluv
01-26-2011, 04:06 PM
Last time I checked $33 - 25$ = $8, not $7 lol sorry to call you out...

Yeah I never was good at math. :laugh::laugh:

Dave...

coolluv
01-26-2011, 04:13 PM
If you want to work for $25 per small lawn you can. The one thing missing from most on here is a constant marketing strategy used to have a constant inflow of new customers that replace the ones that can't hang along. Working in close knit neighborhoods and knowing your service area bounderies are priority. Most haven't or don't even have a set percentage of income going toward advertising. If they do, it is usually used for a one time event instead of a constant campaign about what your company is up to. I believe that many on here are solo because they lack leadership skills and the courage to grow their companies past solo and into running multiple crews. To everything there is pros and cons. Sometimes to get where you want to go you have to take risk.

I agree completely.

Dave...

coolluv
01-26-2011, 04:18 PM
I'm not trying to bust your balls sedge. I know of Just Mow it and many have tried to copy his business, but he has a certain market that just can't be duplicated everywhere. If you have the small type lawns that he concentrates on then you can do it. Notice he says $23 up to 6000 sq ft. for weekly service. For a around $100 a month for that size is doable. He also only uses 21" mowers and small pickups so he has it down to a science.

That type of micro market does not exist everywhere.

Dave...

sedge
01-26-2011, 06:11 PM
Well ive met a couple of guys that have multiple crews and they said dont expand to much because you hit a point where your not making any more money than before because of all of the other expenses involved

:laugh: That makes zero sense. The problem that most lawn companies have that don't make it is they are not tight enough when they expand. if your not tight, then yes, your losing money as they have too much windshield time.

I'm not trying to bust your balls sedge. I know of Just Mow it and many have tried to copy his business, but he has a certain market that just can't be duplicated everywhere. If you have the small type lawns that he concentrates on then you can do it. Notice he says $23 up to 6000 sq ft. for weekly service. For a around $100 a month for that size is doable. He also only uses 21" mowers and small pickups so he has it down to a science.

That type of micro market does not exist everywhere.

Dave...

Yes it is, he is in 4 or 5 major metropolitan areas. More people will have their yard mowed for what he charges, thus the routes can be a lot tighter. If you want to stay small, then no, don't do it. If your going to run one crew or so, charge high and just do the upper market people. I am not saying that the lower priced model is the way to go, at least not for most people, as most people are not good people managers. i met the Just Mow it guys, the son and dad. Sat down and had lunch with them, really nice people.

If I wanted to do that type of service i have the trucks all laid out, and the mowers would not be 21"s, but that is what they use and it works for them.

GreenT
01-31-2011, 12:18 AM
.

Man, what a funny thread. :laugh:

For those that don't know sedge... he likes to talk about big plans and what not and ask for advice, and then argue, and argue, and argue, and then argue a little more. :)

Good thing some of you figured it out quick...

You sound like an idiot! You have bashed every reply you have gotten. Figure out your own pricing!!!

You have been in biz before and have a low ball buddy, figure it out yourself.


:laugh::laugh::laugh:

.

Cajun Cleanin'
01-31-2011, 02:21 AM
Sedge I think you should tell your son to go out and jump in with both feet at $25 a yard.He has no debt and he lives with you so what the hell.When his equipment is all wore out and he doesn't have the cash to fix it or buy new he will be ready to go back to college.

You claim to have walked away from a good business.Why is it because your brother wouldn't buy into the 25 thing either.

sedge
02-03-2011, 04:17 PM
.

Man, what a funny thread. :laugh:

For those that don't know sedge... he likes to talk about big plans and what not and ask for advice, and then argue, and argue, and argue, and then argue a little more. :)

Good thing some of you figured it out quick...




:laugh::laugh::laugh:

.

I didn't bash anyone, go back and try and point out where i bashed their suggestions.

I see our resident big gover lover leftist progressive in the political forum is chasing me around again. oh well, some people just cannot figure out that government is not our friend, but since your for high regulation, big government social programs and the spending that goes with and not only allowing more illegals into the country, but helping those that are here. I don't expect you will ever understand that.

Sedge I think you should tell your son to go out and jump in with both feet at $25 a yard.He has no debt and he lives with you so what the hell.When his equipment is all wore out and he doesn't have the cash to fix it or buy new he will be ready to go back to college.

You claim to have walked away from a good business.Why is it because your brother wouldn't buy into the 25 thing either.

A % of every yard will go into an equipment repair/purchase account.

I already explained, he was to spread out and you try working for a very domineering, hollering person that was pushing us 12 to 14 hours a day 6 days a week and see how much you like it. I tried and tried to convince him to cut back and make it tighter where we were already fairly tight in, but no, he wanted to be big right away and it was just too much.

XLS
02-03-2011, 07:46 PM
we have a location like what your shooting for and i must say we hit 500 accounts total in that location in a year we started with a plan and hit 1 complex in august of 2008 and we ended the season with 120 accounts . Come spring the HOA ask who we were and i had to make a 180 mile drive for a meeting and i walked away with 500 accounts that day .thats when it got hard for the crew. the location had 5 men ,2 trucks and small push mowers and 1 48'' walker it took about 3 weeks to get thinks under control . The numbers was $25.00 minimum $7.50 per 1000sq ft and all of the lawns was a equal pain . All i will say is i am glad i own the company besides working that location if i was working like the crews were i would say Done and walk we broke down the account in fuel, labor, equipment, profit and we took out a profit set rate up front to insure things worked out for us . would we really throw away the complex NO would we do it again He** NO ...

coolluv
02-03-2011, 09:54 PM
So what are you saying? Hard to tell from what you wrote.

Dave...

GreenT
02-04-2011, 01:35 AM
but no, he wanted to be big right away and it was just too much.


As usual... you tend to forget what you may have said in the past. :rolleyes:

Say sedge, why don't you ask people here to just send you a copy of their P&L statements so you can really get the answers you seek... you know, the ones you already know. :laugh:

.

Will P.C.
02-04-2011, 02:42 AM
Man this thread is crazy.

I have no freaking clue what the question is. If you are talking about 5,000sq feet than 40 seems to be right in the middle for most guys around here. Since you were able to get 400 accounts in a year, you should be able to come up with a price that will make you money.

What kind of work are you doing now?

coolluv
02-04-2011, 09:49 AM
Ok Sedge here is what I personally get from your questions and what I think you are trying to do. Nothing personal so don't take it personal. But......

When you ask a question like this it makes me wonder.

Example; Paying employees cash vs check with payroll taxes
Have a question, as a friend of mine pays his employees cash and claims it saves him money.

Pay the guys cash benefits. No paper work to take care of. No payroll matching and workman's comp. Guys will work for less.

Paying by check benefits. You get to deduct their wages.

Ok, in the end when all considerations are figured in, what really is the cost savings one way or the other. I have read that an employee costs 25% above their direct pay in related expenses including payroll taxes, workman's comp and costs to do all the paper work, etc. If you pay cash you eliminate all those expenses, plus the guys will work a bit cheaper.

If your in the 30% tax bracket, then writing off employees is only saving you 30% correct? Or what am I missing.

You and your partner (Brother) had a business before so why you would ask this question puts doubts in my head as to the truth behind what you said. Your Brother and you started a lowball business that became unsustainable because the money was not there to support the business and the accounts suffered probably due to the fact that you could not keep help and pay a decent wage, therefore the work was not being done and you or he or whatever lost customers.

Its a strategy that is set up for failure right from the get go. In any business you have to have one strategy, either you lowball and try to make enough to pay expenses and just make a little off of the large volume. Which would drive me nuts with all of the headaches involved with that type of business model. Or you cater to a higher end client and grow slowly and make enough to eventually pay good help and provide a professional quality service that is built with referrals and quality.

You seem to me that you want to get things going in a hurry and want instant success. Like I said before if you go with that lowball strategy you will have to have everything down to a science. That means inexpensive push mowers with small conversion trucks with custom beds set up for lawn service. That is what just mow it does. Then you would have to have a compensation plan set up that pays per lawn not by the hour, again like just mow it does. They pay per lot and not by the hour and have as system in place that assures quality or the crew goes back out and fixes mistakes at the crews expense, meaning no pay for fixes.

Now, I'm not sure how exactly he or they have that set up but they do and its legal as long as the compensation works out to at least minimum wage. I'm sure that they spent along time working on this business model and spent hours going over numbers and figuring lot sizes and calculating manhours per lot size ect. You said you spoke to them and they are nice folks. Which I'm sure they are, but you would need to sit down with them and if they are willing to share that information with you, which like I said they probably spent a lot of time and money with accountants and lawyers and a bunch of leg work, then that is what you would need to do.

Here is a question from another poster on here.

Example: How Does A Company Expand?
I issued this post this morning Feb. 3rd and was replied to this should be a new thread. So I am reposting this to comply.

Here goes. . .

Hello all. My buddy and I have been in business since 04-01-2009. Billy is in the field outside Ocala, FL and I facilitate the billing and taxes in Fort Myers. We have 66 year round customers who are really happy with our service. Billy cuts in an avid golfing community. He has six years golf course maintenance and brings that style to the table. Walk-behind mowers are used. No ZTRs! Too heavy for the ground and make ruts over time cutting in the same pattern and sprinkler heads have been broken. Former companies come in blow through the yard without seeming to care and leave. Customers complaints about former lawn services are many. The uniqueness of cutting in a diamond patterns seems to be working well for us. The main problems is this: the ability to expand while paying for help due to expansion? How is this possible? We charge $60 for cutting and blowing off sideways etc, and these are rather smaller properties. The size varies but not by much in this gated community. That's the base, then $25 per hr for hedge trimming and anything else they ask for. I have a database that helps me keep track of most everything from remote and local billing (invoices and envelopes) to daily cut schedules. Billy says he wants to go for 120 years this year but weekly payroll taxes are scaring both of us. We don't want to hire people we can't meet tax obligations. Can anyone shed light on this financial to growth Catch-22 situation? Thanks.

This guy is figuring out what I'm trying to say. Sure you can acquire customers fairly quickly with the lowball strategy but this is the brick wall you hit when you are no longer solo and want to expand. The money is not there. So what to do? Raise prices? Not unless you want to lose your customers, because the whole reason you grew so fast and they love you is Price! So now your stuck because you failed to see the big picture and plan for growth down the road.

Pro Cuts thread on how to fail in the Lawn Business thread is an example of what your trying to achieve and its eventual outcome. Grow fast and fail to plan and suddenly your putting out more than your taking in. Now he could have made it work had he done the home work that Just Mow it did and have everything down to a science, But he did not and he failed. I will bet that Just Mow it, after its all said and done, makes very little off of each lawn. Buuuuutttttt....... they make it up in volume. Just like any business with that strategy does. Me personally would rather have less customers with less stress and less employees etc. and make more per customer with less of every thing mentioned.


So there it is.... you have to decide what type of business model you want to have. You can't have both. All successful companies have one or the other and they market that way and pursue the type of customer that fits their business model. It all goes together and becomes your company structure model etc. and as far as making the switch to fert latter on well.....don't expect those lowball customers to want to have fert, your setting yourself up for failure from the get go.

Just my 2 cents.

Dave...

sedge
02-04-2011, 10:42 AM
Man this thread is crazy.

I have no freaking clue what the question is. If you are talking about 5,000sq feet than 40 seems to be right in the middle for most guys around here. Since you were able to get 400 accounts in a year, you should be able to come up with a price that will make you money.

What kind of work are you doing now?

Buying and selling currently.

Your talking 5k in grass right? The $25 is a 8k lot or about 4k in grass.

Not asking what it is going for now etc, just what would your price be if you were starting out in today's economy.

Ok Sedge here is what I personally get from your questions and what I think you are trying to do. Nothing personal so don't take it personal. But......

When you ask a question like this it makes me wonder.

Example; Paying employees cash vs check with payroll taxes
Have a question, as a friend of mine pays his employees cash and claims it saves him money.

Pay the guys cash benefits. No paper work to take care of. No payroll matching and workman's comp. Guys will work for less.

Paying by check benefits. You get to deduct their wages.

Ok, in the end when all considerations are figured in, what really is the cost savings one way or the other. I have read that an employee costs 25% above their direct pay in related expenses including payroll taxes, workman's comp and costs to do all the paper work, etc. If you pay cash you eliminate all those expenses, plus the guys will work a bit cheaper.

If your in the 30% tax bracket, then writing off employees is only saving you 30% correct? Or what am I missing.

You and your partner (Brother) had a business before so why you would ask this question puts doubts in my head as to the truth behind what you said. Your Brother and you started a lowball business that became unsustainable because the money was not there to support the business and the accounts suffered probably due to the fact that you could not keep help and pay a decent wage, therefore the work was not being done and you or he or whatever lost customers.

Its a strategy that is set up for failure right from the get go. In any business you have to have one strategy, either you lowball and try to make enough to pay expenses and just make a little off of the large volume. Which would drive me nuts with all of the headaches involved with that type of business model. Or you cater to a higher end client and grow slowly and make enough to eventually pay good help and provide a professional quality service that is built with referrals and quality.

You seem to me that you want to get things going in a hurry and want instant success. Like I said before if you go with that lowball strategy you will have to have everything down to a science. That means inexpensive push mowers with small conversion trucks with custom beds set up for lawn service. That is what just mow it does. Then you would have to have a compensation plan set up that pays per lawn not by the hour, again like just mow it does. They pay per lot and not by the hour and have as system in place that assures quality or the crew goes back out and fixes mistakes at the crews expense, meaning no pay for fixes.

Now, I'm not sure how exactly he or they have that set up but they do and its legal as long as the compensation works out to at least minimum wage. I'm sure that they spent along time working on this business model and spent hours going over numbers and figuring lot sizes and calculating manhours per lot size ect. You said you spoke to them and they are nice folks. Which I'm sure they are, but you would need to sit down with them and if they are willing to share that information with you, which like I said they probably spent a lot of time and money with accountants and lawyers and a bunch of leg work, then that is what you would need to do.

Here is a question from another poster on here.

Example: How Does A Company Expand?
I issued this post this morning Feb. 3rd and was replied to this should be a new thread. So I am reposting this to comply.

Here goes. . .

Hello all. My buddy and I have been in business since 04-01-2009. Billy is in the field outside Ocala, FL and I facilitate the billing and taxes in Fort Myers. We have 66 year round customers who are really happy with our service. Billy cuts in an avid golfing community. He has six years golf course maintenance and brings that style to the table. Walk-behind mowers are used. No ZTRs! Too heavy for the ground and make ruts over time cutting in the same pattern and sprinkler heads have been broken. Former companies come in blow through the yard without seeming to care and leave. Customers complaints about former lawn services are many. The uniqueness of cutting in a diamond patterns seems to be working well for us. The main problems is this: the ability to expand while paying for help due to expansion? How is this possible? We charge $60 for cutting and blowing off sideways etc, and these are rather smaller properties. The size varies but not by much in this gated community. That's the base, then $25 per hr for hedge trimming and anything else they ask for. I have a database that helps me keep track of most everything from remote and local billing (invoices and envelopes) to daily cut schedules. Billy says he wants to go for 120 years this year but weekly payroll taxes are scaring both of us. We don't want to hire people we can't meet tax obligations. Can anyone shed light on this financial to growth Catch-22 situation? Thanks.

This guy is figuring out what I'm trying to say. Sure you can acquire customers fairly quickly with the lowball strategy but this is the brick wall you hit when you are no longer solo and want to expand. The money is not there. So what to do? Raise prices? Not unless you want to lose your customers, because the whole reason you grew so fast and they love you is Price! So now your stuck because you failed to see the big picture and plan for growth down the road.

Pro Cuts thread on how to fail in the Lawn Business thread is an example of what your trying to achieve and its eventual outcome. Grow fast and fail to plan and suddenly your putting out more than your taking in. Now he could have made it work had he done the home work that Just Mow it did and have everything down to a science, But he did not and he failed. I will bet that Just Mow it, after its all said and done, makes very little off of each lawn. Buuuuutttttt....... they make it up in volume. Just like any business with that strategy does. Me personally would rather have less customers with less stress and less employees etc. and make more per customer with less of every thing mentioned.


So there it is.... you have to decide what type of business model you want to have. You can't have both. All successful companies have one or the other and they market that way and pursue the type of customer that fits their business model. It all goes together and becomes your company structure model etc. and as far as making the switch to fert latter on well.....don't expect those lowball customers to want to have fert, your setting yourself up for failure from the get go.

Just my 2 cents.

Dave...

Thanx Dave

Yes and no, the tight routes were very profitable, the high windshield accounts were not. Tight routes were $1k a day or there abouts, 8 to 9 hours, maybe 10 depending on dew in the morning. High windshield accounts were $700 or so and 11 to 13 hours sometimes more.

Crew leaders were around $150 a day. Laborers $120.

The largest mowing company I know of is charging $23 per, 12,000 + clients.

My original thought was to start lower, get full, then raise the price. Yes some will be lost, but like most companies do, they offer a low price to gain market share and then raise the price to market levels.

Nearly every one here does weed n fert.

I asked the cash question in the other thread as I have been telling a friend of mine he is crazy to pay cash, but he was trying to tell me how much money he is saving. I don't think he is saving anything really, as he has to pay tax on the their wages, after he pays them.

To your point on what Just Mow it makes and what you prefer to make, I understand and I agree with it. You as a few others have not been able to understand is I am talking starting out and then moving up in price, not staying at a lower price as a business model. I also said that if a person wanted to stay small, then yes, charge more. I don't think I ever said my goal was to be a huge company.

coolluv
02-04-2011, 12:44 PM
Buying and selling currently.

Your talking 5k in grass right? The $25 is a 8k lot or about 4k in grass.

Not asking what it is going for now etc, just what would your price be if you were starting out in today's economy.



Thanx Dave

Yes and no, the tight routes were very profitable, the high windshield accounts were not. Tight routes were $1k a day or there abouts, 8 to 9 hours, maybe 10 depending on dew in the morning. High windshield accounts were $700 or so and 11 to 13 hours sometimes more.

Crew leaders were around $150 a day. Laborers $120.

The largest mowing company I know of is charging $23 per, 12,000 + clients.

My original thought was to start lower, get full, then raise the price. Yes some will be lost, but like most companies do, they offer a low price to gain market share and then raise the price to market levels.

Nearly every one here does weed n fert.

I asked the cash question in the other thread as I have been telling a friend of mine he is crazy to pay cash, but he was trying to tell me how much money he is saving. I don't think he is saving anything really, as he has to pay tax on the their wages, after he pays them.

To your point on what Just Mow it makes and what you prefer to make, I understand and I agree with it. You as a few others have not been able to understand is I am talking starting out and then moving up in price, not staying at a lower price as a business model. I also said that if a person wanted to stay small, then yes, charge more. I don't think I ever said my goal was to be a huge company.

What you and others don't understand is that once you Brand your company as a lowballer then its hard to change that Brand down the road. Your just starting over and like I said before you need to figure out what kind of company you want to be. Lowballer, full service, or something in between. There is nothing wrong with the lowballer strategy but it is a very hard business model to figure out for YOUR situation and YOUR market. If you can make it work.

Once you figure that out then everything has to be consistent with that business model. Marketing,structure,equipment,expected profit, sales goals etc. Get it.

You can't be everything to everyone and you should not try to be.

Dave...

sedge
02-04-2011, 12:58 PM
What you and others don't understand is that once you Brand your company as a lowballer then its hard to change that Brand down the road. Your just starting over and like I said before you need to figure out what kind of company you want to be. Lowballer, full service, or something in between. There is nothing wrong with the lowballer strategy but it is a very hard business model to figure out for YOUR situation and YOUR market. If you can make it work.

Once you figure that out then everything has to be consistent with that business model. Marketing,structure,equipment,expected profit, sales goals etc. Get it.

You can't be everything to everyone and you should not try to be.

Dave...

Do not want to be full service, as planning on moving over to fert/squirt and even if we weren't, hate doing full service.

I disagree on the "brand", market is too big for one small company to always be branded as "low ball", too many different companies and too many potential clients. Remember, one guy can only service about 55 to 70 customers max. Over a million in our metropolitan area.

So, again, what would you charge if you were starting out in today's market climate? Would you charge going rate, going rate +? Or a little lower to gain market share a lot lower? What?

punt66
02-04-2011, 01:24 PM
Do not want to be full service, as planning on moving over to fert/squirt and even if we weren't, hate doing full service.

I disagree on the "brand", market is too big for one small company to always be branded as "low ball", too many different companies and too many potential clients. Remember, one guy can only service about 55 to 70 customers max. Over a million in our metropolitan area.

So, again, what would you charge if you were starting out in today's market climate? Would you charge going rate, going rate +? Or a little lower to gain market share a lot lower? What?

your shooting yourself in the foot if you dont go after the market rate. Example, 60 yards x $35 a yard = $2100 a week. Or 60 x 20 = $1200 a week. There is no way in hell i would cut 60 lawns for $1200! I do that in about 2 days for 25 lawns.

sedge
02-04-2011, 01:35 PM
your shooting yourself in the foot if you dont go after the market rate. Example, 60 yards x $35 a yard = $2100 a week. Or 60 x 20 = $1200 a week. There is no way in hell i would cut 60 lawns for $1200! I do that in about 2 days for 25 lawns.

So what your saying, better to have a few clients at market rate instead of being full at a lower price? Your using the logic that your already full.

I can do the math, no probs, just no way your going to be any where near full your first year or second year even since your at market rate.

punt66
02-04-2011, 02:10 PM
So what your saying, better to have a few clients at market rate instead of being full at a lower price? Your using the logic that your already full.

I can do the math, no probs, just no way your going to be any where near full your first year or second year even since your at market rate.

your looking at that wrong. At market rate you will only need 25 lawns to equal your 60. Then keep growing.

coolluv
02-04-2011, 02:13 PM
your looking at that wrong. At market rate you will only need 25 lawns to equal your 60. Then keep growing.

Exactly! Don't count lawns or customers, count profits.

Dave...

coolluv
02-04-2011, 02:18 PM
Do not want to be full service, as planning on moving over to fert/squirt and even if we weren't, hate doing full service.

I disagree on the "brand", market is too big for one small company to always be branded as "low ball", too many different companies and too many potential clients. Remember, one guy can only service about 55 to 70 customers max. Over a million in our metropolitan area.

So, again, what would you charge if you were starting out in today's market climate? Would you charge going rate, going rate +? Or a little lower to gain market share a lot lower? What?

Not trying to be a smart @$$ but I suggest you read a few business books. You can disagree all you want but your still wrong.

Perception is Reality.

Dave...

T.E.
02-04-2011, 03:02 PM
I've already posted in this thread. I'm in his area....I was charging the prices he charged a few yrs. ago in the 1980's for crying out loud.

In 2007 I was picking up most everything I bid for a minimum of 35.00. I went up in mid season last yr. and lost one account.....he was slow payer anyway. My average now is $40.00....why for the love of Pete would I or anyone else want to come in this market for anything under that?

As already stated I rather mow 10 lawns at 100.00 per cut than 100 lawns at 10.00 per cut.

Again the OP should be able to figure out the answer to his ? simply by past experience.

IMHO

sedge
02-04-2011, 03:03 PM
your looking at that wrong. At market rate you will only need 25 lawns to equal your 60. Then keep growing.

So your saying better off to sit around then be out in front of people and slowly raising your prices once your full?


Exactly! Don't count lawns or customers, count profits.

Dave...

I could do 1 lawn at $100 and make more, doesn't mean that in a years time that would be the most profitable way to go. i hear you guys on the upper end clients, never have disagreed. heck, who wants to mow a client for $25 when you can get $40. it is just hard to break into a market charging high end rates. no one knows your quality.

Not trying to be a smart @$$ but I suggest you read a few business books. You can disagree all you want but your still wrong.

Perception is Reality.

Dave...

Most businesses break into a new market by under cutting, then raise their prices. Reality is, well reality.

coolluv
02-04-2011, 03:24 PM
It sounds to me like you have already made up your mind as to what you want to do. I'm just curious is how it works out for you. Keep us updated throughout the year.

Dave...

sedge
02-04-2011, 04:05 PM
I've already posted in this thread. I'm in his area....I was charging the prices he charged a few yrs. ago in the 1980's for crying out loud.

In 2007 I was picking up most everything I bid for a minimum of 35.00. I went up in mid season last yr. and lost one account.....he was slow payer anyway. My average now is $40.00....why for the love of Pete would I or anyone else want to come in this market for anything under that?

As already stated I rather mow 10 lawns at 100.00 per cut than 100 lawns at 10.00 per cut.

Again the OP should be able to figure out the answer to his ? simply by past experience.

IMHO

2007 economy was a lot better then 2011.

Easier to keep clients used to paying higher dollar and they know you and your quality, then being a newbie and charging top rate.

I would rather mow one yard per day at 1k, but that ain't happening.

So what your saying is, better to charge top dollar and sit around waiting for the phone to ring then it is too be out in front of the people working for less to start and then raising your prices over the year or 2 year span?

sedge
02-04-2011, 04:11 PM
It sounds to me like you have already made up your mind as to what you want to do. I'm just curious is how it works out for you. Keep us updated throughout the year.

Dave...

Not for sure, but will keep you guys posted. I am just worried that we won't be busy enough trying to break into the market with market rates, thus not earning. I mean, if we charge the same as every one else, why would they leave their current mow boy for us? Answer is they wouldn't unless his quality blowed. We would rather work for less for a time, then not be working at all.

coolluv
02-04-2011, 04:16 PM
Not for sure, but will keep you guys posted. I am just worried that we won't be busy enough trying to break into the market with market rates, thus not earning. I mean, if we charge the same as every one else, why would they leave their current mow boy for us? Answer is they wouldn't unless his quality blowed. We would rather work for less for a time, then not be working at all.

Aaaaahhhhh see that's the million dollar question, and that's not the only reason. Goes back to what I was saying before. You don't want to get into a race to the bottom.

Dave...

GreenT
02-04-2011, 05:17 PM
For those that don't know sedge... he likes to talk about big plans and what not and ask for advice, and then argue, and argue, and argue, and then argue a little more. :)


Ahem!..... :)


.

Will P.C.
02-04-2011, 10:41 PM
Major problems with starting out lowballing and then increasing the price. First, the customer will just call the next lowballer who drops off a door hanger with his lowball price.

This method sucks because you are banking on raising the price and you know you aren't going to make any profit off your original price. Your not going to have that many clients in your first year either.

You will probably come back and post 'I am providing a quality cut and if the customer respects quality, they won't mind me raising the price. Most people dont care about quality. They just want the yard to look nice. I'm not even sure what a 'quality mow and blow' is. The people that really care about their yards will cut it themselves 9 times out of 10.

I understand quality when dealing with fertilizer products. Moreover, every fert company that knocks on my door says the exact same thing "We offer the highest quality fert. and they are much better than any company in the area"

T.E.
02-05-2011, 02:35 AM
I've already posted in this thread. I'm in his area....I was charging the prices he charged a few yrs. ago in the 1980's for crying out loud.

In 2007 I was picking up most everything I bid for a minimum of 35.00. I went up in mid season last yr. and lost one account.....he was slow payer anyway. My average now is $40.00.... IN 2010 why for the love of Pete would I or anyone else want to come in this market for anything under that?

As already stated I rather mow 10 lawns at 100.00 per cut than 100 lawns at 10.00 per cut.

Again the OP should be able to figure out the answer to his ? simply by past experience.

IMHO


Sedge I think you might have missed this point.

Good luck

punt66
02-05-2011, 07:07 AM
Not for sure, but will keep you guys posted. I am just worried that we won't be busy enough trying to break into the market with market rates, thus not earning. I mean, if we charge the same as every one else, why would they leave their current mow boy for us? Answer is they wouldn't unless his quality blowed. We would rather work for less for a time, then not be working at all.

Then tell him to get a part time job. He lives with mommy and daddy anyway. Set him up correctly.

lawnman_scott
02-05-2011, 09:06 AM
What i would do is take coolluv, perdue37, michael giest yard works advice. Then either bid very low or very high to show your son the unglorious side of the business. Have him pay rent (just to show he can and tell him you are banking it), put money away for taxes, future equipment, savings, then hopefully next year at this time he will be deciding what classes he is going to be enrolling in at the local university.