Charge per man hour and min. cut prices.

[Jim B]

Sure it's been asked before but I'd like to know what your charge per man hour is and if you have a minimum charge for lawn maint.<br> <br>Thanks in Advance!<br>Jim

[bill phagan]

Jim,<p>I think minimum pricing on jobs is a good thing. When I had my 40 man LMO, my min for maint was $1k per month due to overhead and maximizing profits. Same with landscaping. A min job of say, $500 should ensure profits. During my consultations with large and small LMO's, I've seen CPMH range from $7-27 per manhour, inclusive of overhead expense. Many of them were charging the &quot;going rate&quot; such as $22 per hour when their cost was $25. Losing money daily. If you really want to be financially sophisticated, you'll need to create a Profit and Loss Statement, MONTHLY and a Balance Sheet (Qtrly) These documents will serve as your financial &quot;roadmap&quot; to success if formatted for our industry. Pricing must be based on your jobs costs, overhead recovery and profit. It is a moving target due to our seasonality, etc. The book &quot;Accounting for Dummies&quot; will help you or give me a call. See my website at www.greenindconsulting.com<p>Hope this helps<p>Bill Phagan<br>Green Ind Consulting, Inc.

[turfquip]

<p>For my mowing company $30.00 is breakeven inclusive of overhead. A target MHR should be as high as you can make it - $40 - $50 an hour mowing is certainly doable. Not only on the turf, but you can even squeeze out numbers like these with tight, well consolidated routes so you are earning it all day. Obviously, you'll need to be running the most efficient equipment available in order to realize these numbers....<p>I'm conitnually doing a time study in my mind as I go throught the day - looking for little ways to improve efficiency in order to increase MHR. I don't know, maybe its the manager in me.<p>But. I would never agree to mow all season by the hour for ANYBODY. There is a saying &quot;live by the hour - die by the hour&quot; Doing business this way will penalize you for efficiency improvements and YOU DON&quot;T WANT THAT. You could use hourly to determine the price in a case where you don't have the experience to bid it by the job. But once price is determined, leave it there - then improve efficiency by using a bigger mower, etc.<p>Hope this helps

[CLM1]

Don't get upset guys/gals as this is just my opinion.<br>Had a refrigerator repairman here at the house this a.m., got up for my morning bowl<br>of cereal and the d@#% milk was warm.<br>His total time here (incl. his chats to his partner via Nextel) 37 minutes.<br>Parts = $52.35<br>Labor = $60.00<br>$60.00 per hr. w/a one hr. min.<br>Now, what is your time and knowledge worth?<br>Do you carry a pesticide or herbicide license? How about the CLT?<br>Think about it.... is it not time to raise the standards of this industry along with our rates?<br>Again...just a thought.<br>Good day to all & try to stay cool in this miserable heat/humidity.

[Charles]

CLM1, very true, but you way behind on this pricing discussion. We been whining about this for quite some time--(see previous post)

[lawrence stone]

CLM to compaire lawn care vs. white good repair is not a vaild comparsion.<p>The white goods guy has to wait around for someone to call. You can only sell that service one or a few times.<p>But lawn care services (full service esp.)<br>are sold on a regular basis ( 6 months to <br>year round). The white good repair guy needs to spend lots on advertising. <p>Myself I have zero advertising costs since my days doing residential lawn care is limited<br>I just direct sell the accounts I want to do business with.

[Getmow]

Very good advice Mr. Phagan. Everybody's &quot;break even point&quot;, market and wants are different. Example: in my area the going &quot;quote&quot; per man hour is $30. For us, by having good equipment,systems,etc., a good average is about $50.<br> The point is KNOW WHAT IT COSTS YOU TO DO BUSINESS...then you will know what to charge.

[HOMER]

clm1, I tried my best to get a duscussion going on trying to raise the bar so to speak. I thought we could get some good dialogue going on how to accomplish that through the use of this forum and possible expansion, membership, seminars, etc....... I price yards as high as the market will bear, no, not by the hour, and work as efficiently as I can to achieve the highest dollar per hour figure I can. Without an across the board rate hike by all the folks with a lawnmower in their trunk, we are going to have to buy the best we can afford and plan our routes as efficiently as possible to make a good living. Capitalize on the &quot;scrubs&quot; doing the half a$$ work out there by moving in when your called(I stress when)and do top quality work so you can get more per month out of them. There are those out there that will still pay $20.00 to $40.00 per month more just to get a good job done and get it done in a timely manner. I just found 4 last week so I know there is still hope.<p>Homer

[AB Lawn Care]

My charge per hour is between $30-$80 dollars an hour.I will not work for less than $30 and I think my best paying job is about $80 an hour.I this years decided not to do any job no matter how small for under $15 I have allready raised that to $20.Maby next year $25-$30?????It will just depend how well things go!<p>----------<br>from:Adam<br>AB Lawn Care

[bill phagan]

Jim,<p>Almost forgot. I have 3 articles I've written posted on this site....click on &quot;tips by bill phagan&quot; in the upper right hand corner....go to &quot;making # without working 24-7&quot; Think you'll like it.<p>bill phagan

[slingshot]

why would you buy the fastest and beas equiptment if you are getting paid by the hour. i never charge by the hour just set a average of what you want your guys to bring in each day to make a profit then schedual and send them out sometimes you get a little less sometimes more it evens out

[bdemir]

Adam is that canadian dollars or american.

[AB Lawn Care]

Bdemir-That's caniadian.We there is not much difference between pricing from the U.S.We just get hit really hard when we cross the border!<p>----------<br>from:Adam<br>AB Lawn Care

[Jim B]

Thanks for the input guys!<br> Bill, I'm way ahead of ya. Iv'e been in the lawn bus. for over 8 years and have all my costs in spreadsheet form and broken down into every catagory that I could think of.<p>What I was getting at in my original post as far as the MHR and minimum charge was basicly this. Say all costs, an aprox. down time figure and a 12% profit margin boils down to $30.00 per man per hour. This breaks down to $.50 per man per minute. A 2 man crew therefore would be $1.00 per minute. I bid a lawn and figure 30 minutes to do the job, my estimate would be $30.00. My minimum is $20.00 no matter how small the job.<br>As we do the work we job cost everything. usually the actual time to do the job is somewhat less then my estimate (goody goody :) ). If the job is consistantly taking longer, then I contact the customer and change the price accordingly (usualy without problem).<p>So what I was looking for is what everyone else around the countrys costs and/or MHR are. And what thier minimum price for a lawn is. <p>Thanks Again!<br>Jim

[Jim B]

Bill, should have phrased that &quot;Right with ya&quot; not &quot;ahead of ya&quot; !<p>Jim

[TGCummings]

I try to estimate my jobs around $25/hour and usually end up in the range of $20-$30, my target (previously!). Like Homer, I charge as much as the market will bear and just try to be more efficient. Bear in mind that up until next Tuesday I have never (in almost six years now) used anything larger than a 21&quot; Kubota or Toro walk-behind. Looking around, I see that most of the competition around here still doesn't.<p>In the zone this week, I kept doing some figuring. If my mow time is cut in half by my new 36&quot; Exmark then I've already raised my rates to between $30-$40 per hour w/o changing a thing. Often times even higher. Naturally, the 36&quot; doesn't change my drive, curb, edging, trimming, or blowing time so I've tried to factor that out while doing jobs this week. Still, I'll be very happy with that result and the machine will pay for itself in a few weeks at that rate. Maybe a couple months tops.<p>I've never cared too much to have a minimum. I have smaller customers next to larger ones who just want this or that done real quick everytime I'm next door. This might be a quick edging job every two weeks for $15/month. I might spend 15 minutes doing it the whole month and making in the range of $60/hour at that rate. Often those customers turn into full-service customers once I've established myself with them. ::shrug::<p>The discussion about minimum charging is starting to make me think, however. Is this 'extra cash' hurting my business or the industry in general? I've toyed with dropping that sort of thing from the schedule before but never looked at it in quite the light I'm getting here. <p>Whaddya think?<p>-TGC<p>

[bill phagan]

Jim, you asked an excellent question. What's everyone else's cost? Believe me after hundreds of consultations with lawn maintenance companies, large and small, landscapers, etc., the range is all over the place. As low as $7, as high as $27 per manhour, so in this case the average would be $17. EVERY COMPANY MUST KNOW THEIR OWN COSTS to do a job. Too many companies out there charging the going rate like $22 per MH when it costs them $24 per MH. Just don't know any different. Guess they figured they could make it up in volume, eh? Profits are relative as well. Are we talking gross profit or pre-tax or bottom line profits? What's included in direct costs or cost of goods sold? What's included in overhead? What is the overhead recovery %? EVERY business is different. Landscaping specialist must format and estimate differently than maintenance co's. If you have multiple divisions like I had, estimating was industry specific such as irrigation, pc/fert/tree work, etc due somewhat to market pricing but related costs such as work comp...In Florida WC for maintenance is about $9 per hundred and almost $30 for tree work. Multiple divisions or income streams make it necessary to create P&L's on each one to decide which division is a winner or loser. Lots of things to consider when doing an estimate. The easy part is crunching the numbers. The time consumption comes with getting a business' info together in a understandable, easy to read format, then applying what you know. I hate formulas in this profession and many people use them. The only formula I recommend is first and foremost WHAT WILL IT COST YOU TO DO THE JOB. What are the considerations you must make for the job? What do you want your profit to be? Your costs (all inclusive) plus profit equals the selling price. I was suggesting using a cost per manhour rate for maintenance based on your cpmh, plus profit for each visit to the job site during the course of the year. Say 10 manhours per visit at $15 is your cost or $150 per trip times the number of trips equals your total yearly cost. Now, what do you want to make added to it divided by 12, 8 or whatever # of months and you've got their monthly figure. Lots of variables in pricing, job costing, etc. May be a good exercise to go through your accounts and prioritize from the highest to the lowest in terms of profits derived.<p>Didn't mean this to be so wordy but I just presented a four hour estimating workshop for lawn maintenance companies and it's spewing over!<p>Good Luck.<p>Bill Phagan<br>Green Ind Consulting, Inc.

[mowerman90]

Remember this and you'll never go wrong:<br>&quot;WHEN IN DOUBT, OVERCHARGE!&quot;

[thelawnguy]

Some of the dollar figures quoted here seem kinda low. Remember, your price needs to cover your expenses such as insurance and fuel, wages (both for the help and yourself) vehicle and equipment repairs, but you also need something to replace that equipment in the future. Also dont forget that, when the time comes, nobodys going to hand you a gold watch and a pension, you better be putting something away now for when that day comes.<p>Bill

[TGCummings]

I'm getting kinda stuck on the number-crunching here. As I've said previously, I've been in the business for about six years and, admittedly, have been doing a poor job on the business end. I'm a helluva lawn guy, but I know I've been cheating myself when it comes to money.<p>Still, I add up my expenses over the last several years and project what I'll spend annually now with adding more insurance, higher quality equipment, etc. etc. and come up with an annual expense figure for my business. I divide that annual figure by the projected time spent in the field and come out with a CPMH expense.<p>I've done this several different ways to check my numbers. I've included my truck, trailer, everything I could think of. <p>My CPMH comes out to about $6/hour.<p>Bill has said the range he's come up with is from $7-$27 per hour. Well, my figures come out lower even than that. I do 90% residential lawn service and about 10% commercial. I've factored in increased business, costing for a more varied product, and even plugged in a few thousand a year extra in &quot;unseen expense&quot;. Still, my CPMH number 'feels' low. What am I doing wrong on that end? Or, do I just run a very low overhead operation?<p>Does that fact that I live in a mild climate, where there is no off-season for mowing, dramatically affect my situation? If the average work season around the country is 8 months, should I be projecting my rate/man hour at about 25% less than national average (since I work a 12-month season?).<p>I'm eager to improve. Any suggestions on this one?<p>-TGC

[Getmow]

TG, Don't forget to factor in the actual labor cost including taxes, insurance etc. I am assuming that you have already added all your fixed overhead(building,licenses) and office / accounting expenses.<br> I don't have the best handle on all of the figures but you can get it in the ballpark with out a consultant. If you want to be exact and know where your money is going either do a lot of reading in those highly advertised books or hire a good consultant(Vander Koi? , Phagan ,Neilson) Sometimes the painful truth is what is needed to get going in the right direction.

[Samurai WeedWacker]

Didn't see any mention in this discussion about including hours spent doing maintenance, paperwork etc. in CPMH.<br>Here in Wyoming I get $15-$30/hr, more than most hereabouts 'cause I'm aka Captain Efficient.<br><p><font size="1">Edited by: Samurai WeedWacker

[JasonPC]

Sorry guys. But these figures really do seem kind of low to me. I charge $35/man hour and I'm in Massachusetts. How about the rest of you?<p>Jay

[Lazer]

Wyoming, Massachusetts?<p>My guess is there is a SLIGHT difference in cost of living/doing business.<p>Slice it how you want, you've got to get $40+ per hour for mowing and $50+ for landscaping in order to make a living in this business.<p>$25 minimum stop.<p><font size="1">Edited by: Lazer

[Charles]

That is so true Lawnguy. You better think of that when pricing. You have to pay into fully your own retirement plan. We get no paid vacations. Pay our own dental, medical, life insurance, investments, along with alot of other expenses. You just can't make it on the little social security check you may or may not get when you retire.

[TGCummings]

Well, I generally *charge* in the area of $20-$30/hour, and yes I've found that's low. I have some properties I'm making $30-$50/hour on, and I'm working to move all my others into a higher bracket. Seriously, I just never realized...<p>It's going to take some time, but I'm going to be shooting for the moon from here on out. I've got a six-year established lawn care business in my area, but I've a feeling I'll be losing most of the clientele I have now in the coming years. <p>Prices are going up. Big time.<p>Sink or swim time... ;)<p>-TGC