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KS_Grasscutter
02-13-2012, 09:34 PM
As time goes by, I seem to notice more and more posts asking "How much should I charge to mow grass?" So as I was sitting there eating dinner tonight, the idea for this post popped into my head. This post is not intended to take all the work out of it for you, but may help others (as well as myself) to figure out how much to charge.

First of all, there are so many variables it will take some tweaking. Full or part time. Other services offered. Region (cost of living, season length, etc). Work from home or have a shop. Etc.

In order to be successful, you need to cover your expenses as well as your tax obligations and have enough left over for your desired profit (this could range from a part time gig earning $100 a week to pay for your beer and skoal, to a desired profit of $100k or more).

The numbers I will use in this post are gonna be roughly estimated, some based on my numbers, some I may just make up.

Ok. Here is the scenario. In your market, the typical lawn is 8,000 square feet. You are a lawn mowing contractor only to streamline expenses. You want to know how much money you need to make a profit. You are a full time solo operator, who works from home. Your wife has a job so insurance is provided. Your target number of accounts is 60.

Your expenses: (cost per year)
-fuel ($2,000)
-liability insurance ($600)
-advertising (door hangers, bus cards)($300)
-logoed t-shirts ($150)
-truck lettering ($100)
-equipment ($2,300)
-trucks ($1,000)
-trailers ($250)
-paper, envelopes, stamps ($250)
-shop supplies ($500)
-tools ($500)
-vehicle insurance ($750)
-business cell phone ($1200)
-vehicle and equipment upkeep ($2,000)
-vehicle registrations and personal property tax ($500)

You need a $8500 truck with $500 of lettering, that will last 5 years and you can resell for $3500. Your trailer will cost $2500 and last 10 years. You need a 52" zero turn ($8,000/keep 4 years/sell for $3000) and a 32" walk behind ($4,000/keep 10 years/sell for $1,000), as well as $750 per year of smaller equipment.

Based on all of this, your total expenses are $12,400. Of course this will go up significantly if you have more equipment. You have 60 lawns that get cut 34 times, for 2,040 cuts per year. Therefore your expenses are $6.08 per lawn.

Now, you cut 2 of those lawns per hour, 12 in a day, getting the 60 done in 5 days. Figuring in maintenance and admin time, you work roughly 45 hours per week, or 1,530 hours in the 34 week season. As the owner, if you want to make (net) $30 an hour before taxes, you need to gross $45,900+ the $12,400, which is $58,300.

To translate that into a per cut price, divide the $58,300 by 2040. That is $28.58.

So in conclusion, that 8000 square foot lawn needs to be billed at a rate of at least $28.58. Tell the customer $32, they'll counter with $25, you agree on $29 or $30. Or they agree to $32 and you make a little extra profit.

Now, like I said, there are a lot of variables this doesn't cover. Insert your situation and numbers, and I would imagine you will get pretty close. Hopefully this will help some folks, and maybe eliminate some of the "How much do you charge" questions. Also, I didn't go back and redo any of the math, so if something is off, try to go easy on me lol.

Jimslawncareservice
02-13-2012, 10:41 PM
Subscribed
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KS_Grasscutter
02-14-2012, 01:19 PM
Well, I will bump this up, once, in hopes that it might help SOMEONE. I put a little time and thought into this post, it's kinda disappointing to see it get almost completely ignored in favor of the typical "nice stripes, dude" posts.

Im sure more people would have seen it on the commercial mowing forum, which i'm almost positive is where I put it and it got moved here. Yet the "how much do I charge for this" posts, that this was meant to help answer, will remain there. Go figure.

Landrus2
02-14-2012, 01:24 PM
You tell them don't know if they going to listen :laugh:

Jimslawncareservice
02-14-2012, 01:26 PM
A post like this should be made into a sticky. Ks is your name Aaron?
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KS_Grasscutter
02-14-2012, 01:29 PM
A post like this should be made into a sticky. Ks is your name Aaron?
Posted via Mobile Device

Close, it's Eric.

Jimslawncareservice
02-14-2012, 01:39 PM
Oh ok, there was a guy who sold a bunch of stuff on Craigslist and eBay from there.
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lawnkingforever
02-14-2012, 02:10 PM
Well, I will bump this up, once, in hopes that it might help SOMEONE. I put a little time and thought into this post, it's kinda disappointing to see it get almost completely ignored in favor of the typical "nice stripes, dude" posts.

Im sure more people would have seen it on the commercial mowing forum, which i'm almost positive is where I put it and it got moved here. Yet the "how much do I charge for this" posts, that this was meant to help answer, will remain there. Go figure.

I agree. This was a good thread with valuable info for the "newbies". Nice of you to take time to post it. I guess people are more concerned with one of the many threads on when to put out flyers and when to start mowing, even though it is still the middle of winter in some parts of the country. If you would of started another thread on the big mystery surrounding BOP you might have gotten a better response.
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drenchedlawn
02-14-2012, 03:58 PM
I too really appreciate this thread. Thanks, nicely done.

rkeguy
02-14-2012, 04:22 PM
Excellent and very helpful. I agree and hope an administrator will make this a sticky. Very well laid out and explained in great detail.

BeachysLawn
02-14-2012, 04:59 PM
Well written, Good info! Probably takes too much thinking to get a lot of attention :)

TMlawncare
02-14-2012, 05:14 PM
You put down $2000/yr for fuel. Please tell me that is a number you made up. Last year I spent almost $1700 in May alone. One more thing that might be wise to add in there is misc/business fund. This little account is funded with $300-500/ month that picks up all the little extras and makes for a good equipment fund as well. Alway need money to keep the wheels turning, otherwise the credit cards will kill you over time. Another monthly fund we pay into is a winter fund. We usually put $750-1000/month from May to November. This has really helped us get through this snowless winter. Keep in mind business expenses like mower pmts, truck pmts, ins pmts, tax pmts don't stop through the winter. Excellent post.

KS_Grasscutter
02-14-2012, 07:34 PM
Well glad at least a couple of you got something out of it. The fuel thing isn't probably too far off for a solo op with a fairly tight route. Maybe closer to $3,000 though. The winter fund is a good idea too.

TMlawncare
02-14-2012, 08:30 PM
Well glad at least a couple of you got something out of it. The fuel thing isn't probably too far off for a solo op with a fairly tight route. Maybe closer to $3,000 though. The winter fund is a good idea too.

The winter fund takes a lot of discipline throughout the season. It really has helped save our backside this winter. Without it I would have had to take out about a hefty loan to cover reoccuring expenses.

KS_Grasscutter
02-14-2012, 09:22 PM
In the past I have simply been putting money in savings throughout the year, wasn't really able to save as much as I should have because of our horrible drought. That, coupled with a terrible winter, has things extremely tight. But that's ok, maybe this year will be better.
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TMlawncare
02-15-2012, 10:21 AM
I too have been concerned about a possible drought. It does look like Kansas, Oklahoma and Texas have received more moisture in the last few months then all last summer. Hopefully this spring, summer and fall will be more normal.

Jimslawncareservice
02-15-2012, 10:29 AM
Not to burst your bubble to southern guys, but the long term looks to be hotter than normal and drier too. Right now in Minnesota we are getting worried about a dry spring and summer, but nothing like you guys have expierienced.
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BeachysLawn
02-15-2012, 11:11 AM
I'm a solo op at this point and my fuel cost last year ran just about $400 a month during busy season so I think your $3000 estimate is really very close. And that is with fairly loose routes.

BBC.lawn.services
02-15-2012, 12:46 PM
Great post KS_Grasscutter!

I just went through the process of figuring out all my yearly expenses and than figuring what I need to make per hour for them. Wish I would have saw your post and saved myself a little time!

I prefer to adjust my variable expenses per job. (variables being what equipment I'm using for that job/gas usage/drive time etc.) instead of averaging it out over the whole year. I feel like it help to make sure I can give the best possible bid and know that all my expenses will be paid for.

I've seen some posts around about "my equipment is going to be paid off this year! I can make so much more $!!!" but you need to have money put away to cover equipment costs every year so If something breaks down etc. you don't have to pay with your personal $.

I like to put my labor cost in the grid as well instead of just taking what's left. After I think I have everything covered, I put an extra 10-20% on top for taxes and other expenses. This will be my first year using the price system so hopefully it works out swell!

btw. you need to get a new cell phone plan if your paying $1,200! lol

DoetschOutdoor
02-15-2012, 01:16 PM
Good luck finding a cell phone plan for much less than $100 a month. The basic smartphone plan will run you from $75-120 depending on what you need. I think I'm the only person on earth who still has a flip phone and still only pays $55 a month for service. But I can not hold off anymore for both business and personal use so I too will be paying upwards of $100/month for the iphone this year. Rediculous how cell phone plans just refuse to come down in price!

BBC.lawn.services
02-15-2012, 01:34 PM
oh, man! Well there you go! Haven't gone phone shopping in awhile. Cell phone companies really have a neuce hold on the industry. If they all decided to go up at the same rate than ouch! we're screwed! Luckily as of right now there's enough competition to hopefully keep it from getting to high.

agent walker
02-15-2012, 04:18 PM
thats a good post, i wish there was a rough percentage to go by of what insurance, payroll, fuel etc should be to help figure out if your making enough money or if you should raise prices. I have 50-55 accounts and one helper and spent over 7000 on fuel last year :( I do have about 25mi to the towns i work in, but i'm working on tightening up my route for this year. I did gross a bit more than the example tho

KS_Grasscutter
02-15-2012, 04:46 PM
I wish I knew how to put that into a spreadsheet. The way to make it work for bidding new work would be to enter what percent of your time for the week the new account would be times your expenses and profit margin. I think?
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BBC.lawn.services
02-15-2012, 04:56 PM
The way I do it is have everything calculated per hour that I can possibly have. I estimate the number at the beginning of the season of how many hours of work I think I will have. Than I can just plug in how long I think it will take me with what type of equipment etc. and I have a very accurate number to turn in as a bid.

Say if I had one hour of ZTR mowing and 1 hour of weed eating and cleaning up at a property I would just put those numbers in and hopefully have a very close estimate to what the real expenses will be etc.

JContracting
02-17-2012, 11:50 AM
The best way is to figure out what you need per day, week, or month rather than per hr. Especially If you're starting out and you don't have a solid 30 mowing hrs per week. You also can't go off your current pricing model unless you want to offer the same services forever and never want to have more/nicer things. Gotta budget for expansion.
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wbw
02-17-2012, 07:35 PM
oh, man! Well there you go! Haven't gone phone shopping in awhile. Cell phone companies really have a neuce hold on the industry. If they all decided to go up at the same rate than ouch! we're screwed! Luckily as of right now there's enough competition to hopefully keep it from getting to high.

Cell phones are a bargain. My bill was $500 a month in 1985. Today for $100 you can get unlimited calls with free long distance, texting and internet. I'll say it again...cell phones are a bargain.

DuallyVette
02-17-2012, 09:36 PM
as for cell phones... in 1975 I had a radio phone in my truck. The unit was bigger than a couple of phone books and cost $3500+. Phone use cost 30 cents a minute.. for every minute...including the time that the phone rang. As soon as you lifted the reciever off of it's base and "Sarah" the operator ask you what number you wanted dailed...you paid 30 cents a minute.

In 1986 I bought two Panasonic hard case "cell" phones. $1500 ea + 30 cents a minute.

cpllawncare
02-18-2012, 01:24 AM
Good luck finding a cell phone plan for much less than $100 a month. The basic smartphone plan will run you from $75-120 depending on what you need. I think I'm the only person on earth who still has a flip phone and still only pays $55 a month for service. But I can not hold off anymore for both business and personal use so I too will be paying upwards of $100/month for the iphone this year. Rediculous how cell phone plans just refuse to come down in price!

Go to smart talk, android smart phone for $45/month unlimited everything. I'm dumping my verizon account in march. I'm a solo and spent over 3k in fuel cost alone last year, when I used this formula I was glad to see I came out even better than my own, I was thinking about raising my prices a bit this year but I look to be ok right where I am as long as gas doesn't go through the roof like I'm hearing.

eqmjrg
02-18-2012, 01:25 AM
As time goes by, I seem to notice more and more posts asking "How much should I charge to mow grass?" So as I was sitting there eating dinner tonight, the idea for this post popped into my head. This post is not intended to take all the work out of it for you, but may help others (as well as myself) to figure out how much to charge.

First of all, there are so many variables it will take some tweaking. Full or part time. Other services offered. Region (cost of living, season length, etc). Work from home or have a shop. Etc.

In order to be successful, you need to cover your expenses as well as your tax obligations and have enough left over for your desired profit (this could range from a part time gig earning $100 a week to pay for your beer and skoal, to a desired profit of $100k or more).

The numbers I will use in this post are gonna be roughly estimated, some based on my numbers, some I may just make up.

Ok. Here is the scenario. In your market, the typical lawn is 8,000 square feet. You are a lawn mowing contractor only to streamline expenses. You want to know how much money you need to make a profit. You are a full time solo operator, who works from home. Your wife has a job so insurance is provided. Your target number of accounts is 60.

Your expenses: (cost per year)
-fuel ($2,000)
-liability insurance ($600)
-advertising (door hangers, bus cards)($300)
-logoed t-shirts ($150)
-truck lettering ($100)
-equipment ($2,300)
-trucks ($1,000)
-trailers ($250)
-paper, envelopes, stamps ($250)
-shop supplies ($500)
-tools ($500)
-vehicle insurance ($750)
-business cell phone ($1200)
-vehicle and equipment upkeep ($2,000)
-vehicle registrations and personal property tax ($500)

You need a $8500 truck with $500 of lettering, that will last 5 years and you can resell for $3500. Your trailer will cost $2500 and last 10 years. You need a 52" zero turn ($8,000/keep 4 years/sell for $3000) and a 32" walk behind ($4,000/keep 10 years/sell for $1,000), as well as $750 per year of smaller equipment.

Based on all of this, your total expenses are $12,400. Of course this will go up significantly if you have more equipment. You have 60 lawns that get cut 34 times, for 2,040 cuts per year. Therefore your expenses are $6.08 per lawn.

Now, you cut 2 of those lawns per hour, 12 in a day, getting the 60 done in 5 days. Figuring in maintenance and admin time, you work roughly 45 hours per week, or 1,530 hours in the 34 week season. As the owner, if you want to make (net) $30 an hour before taxes, you need to gross $45,900+ the $12,400, which is $58,300.

To translate that into a per cut price, divide the $58,300 by 2040. That is $28.58.

So in conclusion, that 8000 square foot lawn needs to be billed at a rate of at least $28.58. Tell the customer $32, they'll counter with $25, you agree on $29 or $30. Or they agree to $32 and you make a little extra profit.

Now, like I said, there are a lot of variables this doesn't cover. Insert your situation and numbers, and I would imagine you will get pretty close. Hopefully this will help some folks, and maybe eliminate some of the "How much do you charge" questions. Also, I didn't go back and redo any of the math, so if something is off, try to go easy on me lol.

We use a program called profit watch.we run the numbers ever 1/4 to make sure our hourly rate is good.
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cpllawncare
02-18-2012, 02:22 AM
one problem I see is you leave no room for weather, say it rains for two or three days, how are you gonna get caught up with 60 accounts on your hands? I think a more realistic # for a solo is 40-50 accounts max, you don't want your quality to suffer, also when it gets 100 degrees in July and Aug your gonna want to slow down a bit, at least that was my experience last year.

seabee24
02-18-2012, 10:48 AM
actually if you really want to push numbers, while mowing if you are charging less than $32 per man hour (based on a 3 man crew) you are loosing money and just dont know it.

I ran figures 3 weeks ago, If your not charging $38.00 plus, and operating a 3 man crew 36 of 40 billable man hours per week, you would be better to work for someone else.

most people forget to figure depreation and maintenance, and repairs of equiptment. and that is where they never really seem to figure it out.

new ZTR = $9,000 plus or mins some with taxes. average USEFUL, and DEPENDABLE life span for that machine is 2000 hours. - when you sell it with 2000 hours on it, your lucky to get $1000 depending on condition. That means for every hour your machine runs its worth $4.00 per hour less..... that means even though this does not effect your cash flow directly, daily....you have invested money that is loosing $4.00 per running hour. When you see it is 3 years down the road when its time to buy a new machine, and you have no savings. thats just depreation, then take into account the 3 sets of tires it will need, the 10 oil changes, 4 hydro fluid changes, 6 belts, 2 spindels, 4 sets of blades, 4 air filters, 1 starter, 1 battery, 2 fuel pumps, 1 wheel motor or hydro pump..over the course of its 2000 hour life span. add all those costs up as well.

Then do that for every mahince. every trimmer, every blower, truck, trailer. If a 3 man crew doesnt pull down 120 plus per year your loosing money.

I often think that for the money invested, I would be better in another industry with higher margins, and less controlling factors.

cpllawncare
02-19-2012, 04:51 AM
I've often thought the same thing seebee, I guess that's why I put 15% of every account in a maintenance/replacement account. I was at $55/mnhr last year and was struggling to get business, then I learned most of the guys are down to $45/mnhr around here, I was like "Man I'm going backwards" but I just had to reevaluate all my accounts and drop the 0nes that weren't profitable for me, at least for the time. I think that's why it's so important to be on top of your numbers and not take on accounts that you can't make money at. From what I can tell the industry is around 20%-30% margins
not that great but it still beats working for the other guy imop, especially when he's at 50%+ or more but he's doing it off YOUR back, or basically he's got you for free.

1dhicks
02-19-2012, 06:39 PM
Good luck finding a cell phone plan for much less than $100 a month. The basic smartphone plan will run you from $75-120 depending on what you need. I think I'm the only person on earth who still has a flip phone and still only pays $55 a month for service. But I can not hold off anymore for both business and personal use so I too will be paying upwards of $100/month for the iphone this year. Rediculous how cell phone plans just refuse to come down in price!

not sure were your located.. but in va.. we have straight talk and boost. which is "sprint" undercover

http://www.prepaidphonenews.com/2011/08/14988-android-phone-coming-to-straight.html

i pay 55 a month for android and unlimited everything.

FinerCutslawnCare
02-19-2012, 07:41 PM
actually if you really want to push numbers, while mowing if you are charging less than $32 per man hour (based on a 3 man crew) you are loosing money and just dont know it.

I ran figures 3 weeks ago, If your not charging $38.00 plus, and operating a 3 man crew 36 of 40 billable man hours per week, you would be better to work for someone else.

most people forget to figure depreation and maintenance, and repairs of equiptment. and that is where they never really seem to figure it out.

new ZTR = $9,000 plus or mins some with taxes. average USEFUL, and DEPENDABLE life span for that machine is 2000 hours. - when you sell it with 2000 hours on it, your lucky to get $1000 depending on condition. That means for every hour your machine runs its worth $4.00 per hour less..... that means even though this does not effect your cash flow directly, daily....you have invested money that is loosing $4.00 per running hour. When you see it is 3 years down the road when its time to buy a new machine, and you have no savings. thats just depreation, then take into account the 3 sets of tires it will need, the 10 oil changes, 4 hydro fluid changes, 6 belts, 2 spindels, 4 sets of blades, 4 air filters, 1 starter, 1 battery, 2 fuel pumps, 1 wheel motor or hydro pump..over the course of its 2000 hour life span. add all those costs up as well.

Then do that for every mahince. every trimmer, every blower, truck, trailer. If a 3 man crew doesnt pull down 120 plus per year your loosing money.

I often think that for the money invested, I would be better in another industry with higher margins, and less controlling factors.

Also another good post just as well as the first one. Dont worry tho guys here within the next money this forum will be flooded with nubes not wanting to do a search and just have people answer them. This site is loaded with good threads like this one!

cpllawncare
02-19-2012, 07:49 PM
There was another post awhile back that went into great detail about figuring your cost and pricing for a profit, I've used that formula although it takes some doing it pretty much covers all the bases, If I can find it in a search I will post a link, not sure what my point is here, but anyway LOL!

nails20
02-25-2012, 02:14 PM
can you help me price a 4.8 acre athletic field. mowing with a 60" exmark commercial mower.. all wide open mowing.. very little triming..1-field is fenced in 26000sqft

scotts lawn care
02-25-2012, 03:10 PM
Very well done, i appreciate the time spent on such a good post, thanks!

KS_Grasscutter
02-25-2012, 04:08 PM
can you help me price a 4.8 acre athletic field. mowing with a 60" exmark commercial mower.. all wide open mowing.. very little triming..1-field is fenced in 26000sqft

How long will it take you to mow it? 2 hours? 3 hours? How much money do you need to make per hour? Just take my formula, adjust it to your needs, enter your numbers, and that will give you your answer.

nails20
02-25-2012, 06:12 PM
i don't know how much per gallon you guys pay, but i spent around 6500 in fuel for the entire year. i live in delaware and buy my fuel in south jersey for .12 .15 cheaper. avg. 50 gallons per week for fill up of all equiptment and truck.

nails20
02-25-2012, 06:19 PM
any help with pricing a 4.8 acre athletic complex. using a 60' deck Exmark commercial mower..all wide open mowing.includes 1 enclosed softball field..thanks..very little trimming

Mahoney3223
02-26-2012, 05:46 PM
come on nails figure it out. quit asking people to bid for you. sheesh. and great post to the OP it's refreshing there is still some good thinkers out here and great topics to cover instead of the usual, how much can i b.s. can say i make a year? or the how much can i exaggerate the number of lawns i mow to sound cool? Great great post.

nails20
02-27-2012, 12:25 AM
i not asking people to bid for me! I am just asking for a general idea or ball park figure. we r all in it to make the old mighty $$$$$$$$$$$$$$.in Delaware it's like a gold rush of people starting there own lawn care service..so if im not close, some other idiot will get it and chances are he has no idea what he is talking about.. my pricing knowledge is in pricing propertys for lawn care treatments not mowing..i have 14yrs of that..

coolluv
02-27-2012, 07:32 AM
i not asking people to bid for me! I am just asking for a general idea or ball park figure. we r all in it to make the old mighty $$$$$$$$$$$$$$.in Delaware it's like a gold rush of people starting there own lawn care service..so if im not close, some other idiot will get it and chances are he has no idea what he is talking about.. my pricing knowledge is in pricing propertys for lawn care treatments not mowing..i have 14yrs of that..

Yes you are. How do you price your lawn care treatments? Flip a coin? Draw straws? Pick a number out of a hat? or your @$$?

Only you can figure out what you need to make. Only you know your cost to operate, and if you are like most on here you have no overhead except for gas and oil because everything is paid for.

Your area is not alone. There will be hundreds of newbies lowballing around here in a few weeks. Every year its the same thing. Thousands of guys with no idea jumping into the lawn game thinking they are going to be rich like all the guys on Lawnsite.

Dave