Theory

[lawnboy]

Do any of you use the theory "I would rather breakeven at jobs, than see a competitor there. If that is what it takes."?

[turfman59]

Breakeven means what ???
The only place breakeven is acceptable is in a municipal or Govt setting,,, maybe a church organization
Breakeven means non-profit

How do you feed yourself or your family..

My answer would be **** NO

[Randy Scott]

NO!

[garyslawn]

NO. Never work for free. I always thought I could make a fortune selling red shirts with white letters that say. "IF IT DON'T PAY, DON"T DO IT>"

[rodfather]

Breakeven:confused: Why bother??? You're running a business...unless you feel it's a hobby or something:dizzy:

[A1 Lawn@Landscapes]

No

I can break even by taking my son to the batting cage, fiddling around with the garden, or anything else that I would rather do.

[grshppr]

Not a chance. If my competitor can do it for less...power to him. I'll be waiting for him to go outta business, and pick up the contract a "my" price later on. No sense working for free. I'd rather be making some $$$ to pay off bills...and a little to live on.:cool:

[Shuter]

I do not agree with that. I am not going to struggle just to keep a competitor away from a job. Although every customer is different.

[EJK2352]

Sounds nuts to me!!! In my area I have too much profitable work to do. I am not the least bit worried about the competition. Keep that kind of practice up and you won't have any working capital !!!
:) ;) :) ED

[landscaper3]

Most sensless thing to do! NO! NO! thats a form of LOW-BALLING!

[dougaustreim]

Ocassionaly there may be a strategic reason to bid low, but it should be for another reason than to keep the competitor out.
Let the competitior break even, that will leave you available for the next job at which you can make a profit.

Keep in mind that you must know all of your costs intimately especially your labor costs ie: production rates.

Also as the year progresses, your breakeven price changes. On January 1, you have a huge overhead bill( rent insurance, interest etc) that must be paid whether you do a days work or not. If you price your work with good overhead recovery, towards the end of the season if you have higher than expected sales, you will have your overhead bill paid. At that time, to finish the year, if you have open time in your schedule you can price jobs lower because your breakeven point is much lower, and you can make some good profit right at the end.

Doug
Austreim Landscaping

[lawnboy]

I was thinking more as a stratigic way. By keeping your competition out of the area.

[LAWNGODFATHER]

Originally posted by lawnboy
Do any of you use the theory "I would rather breakeven at jobs, than see a competitor there. If that is what it takes."? I would rather make money, or the mowers don't come off the trailer.

If I can't make a profit, I don't waste time.

[Albemarle Lawn]

Than just break even.

Let them break even, I'm too busy I'll be doing something else somewhere else making a lot more.

It happens here all the time with a few companies desperate to make their payroll.

We have summarily and ruthlessly increased or dropped all breakeven accounts we used to have. Not like they were little old ladies on pension, I do give them relief, but I have no mercy for these posers who ride Acuras, etc and are mortgaged to the hilt, they can buy a crapsman and mow their own lawn if they can't pay the Vig.

KB

[Lawn Specialties]

As far as doing a job and just breaking even I can go home earlier and still make the same money right? Be careful what kind of games you play.Some us guy's who work solo can operate for just a few bucks an hour.So would I cut a half acre for 3 or 4 bucks? I don't think so.

[gogetter]

Originally posted by Lawn Specialties
As far as doing a job and just breaking even I can go home earlier and still make the same money right? Be careful what kind of games you play.Some us guy's who work solo can operate for just a few bucks an hour.So would I cut a half acre for 3 or 4 bucks? I don't think so.


Huh?

[Doogiegh]

There is too much competition to try to get all the lawns from all the competition..

If you had the choice of mowing 10 yard and you make "$10" profit on each one, that gives you $100 profit total.

If you have 11 yards, 10 of them you make $10 profit, and on 1 you make $0, then you are spending more time using your mowers and your own personal time, still making the same $100.

I feel that there is far better things to do then to be doing someone's lawn just so the competition can't.

Now, if you are that scared of the competition stealing away your customers, then take a hard look at your work ethic and business pricing. I myself could care less what the competition does because there are sooooo many yards to cut, the grass always grows and someone's gotta mow it, and if you lose an account to competition, you can pick one up from somewhere else..

Gary

[jeffex]

If your goal is to capture market share in your working area by keeping competition out then you MAY FIND some long term success. That said, if your hoping to weed out low-ballers it is impossible. They are like dandelions there is always a new one growing. Gaining market share is better done with a plan like Jim Lewis described in another thread. Project a professional image with uniforms , identifiable trucks, and quality work at consistent prices. The entry barriers to this business are indeed low but the hurdle to being successful comes with time and earning a reputation for quality and dependability. Then you will be fighting off work. We are booked for April and May already in our pressure washing business and we are at max capacity for lawns. You will get there , as I was reassured by members here , through ccompetitive pricing dependability , and quality work .with dependability

[onemancrew]

BIG NO:sleeping:

[1stclasslawns]

If I can't make money on it I'll stay at the house. I can go broke from there. I don't need to work my tail off and spend 10 grand on a mower to make nothing. Im in it for the $$$$$


Jim

[dougaustreim]

Most new businesses have the wrong attitude about competition. In most respects, competion is good for your business, because it forces you to focus on the quality of your work and giving value for the money.

I have been at this for thirty years, and many many times new entrants into the business have made the statement that they would run Austreim's out. Guess what, I am still here and the oldest competior based within 30 miles of us is barely 10 years old and most are less than five. I do not base my prices on the competion but rather on what the numbers tell us it has to be.

I learned long ago that the competion could not put me out of business, but if I am not careful and let outside forces make my decisions for me, I can put myself out of business.

We also have to realize that there is not a finite amount of work available. The more companies that are out there doing lawn and landscape work, the more visible the industry is to the general public. We are all competing for disposable income, but so are the boat companies, restaurants, theatres etc. We just need to provide quality for the price, and if the results of our services are more satisfying to the homeowner than the steak he had last night at the restaurant, we will come out on top.

That said, the there still are strategies that can be used when dealing with competion. A landscape job that we did last fall was being looked at by another company as well. I knew that they always bid tough on irrigation, but I also knew that they were usually very high on paver work, because they weren't set up for that very well. I simply shifted some of my overhead recovery, and profit to the paver item and lowered our irrigation price a little, and we got the job. Actually we were still a little high, but close enough that the customer went with us based on our years in business etc.

Once you have developed that reputation, the market will usually give you a margin so you don't have to be rock bottom. When all is said and done, the customer that looks at only price and doesn't factor anything else in usually isn't the best customer anyway.

Doug
Austreim Landscaping
1973-2003

[garyslawn]

Doug; Like your post. Nothing gets wisdom like age. I have often said you can approach my customers with a price of $5.00 and 95% will say "no". My uncle ran a small fleet of trucks and I can remember him screaming at a guy on the phone. " I can leave my trucks sit and go broke, I don't have to run them."

[dougaustreim]

I remember Andy Rooney one time on 60 Minutes making the statement that there are some things you can't know until you have lived a long long time.

The sad part is that none of us seem to be able to learn these lessons from those older, but have to continually learn them for ourselves.

There are a lot of things that I have learned the had way, that as I look back, I remember my Dad dealing with the same things when I was very young. I didn't remember those things until I had relearned them for myself.

Doug

[Meier]

Every time I see a competitor in the area, I write down the name of the company. My area is only a 2 mile radius around my home. So far, I have counted 28 competitors and the list is still growing. This doesn't include all the many clowns running around in pick-ups (some with trailers, some without) who have no signage on thier truck or trailer at all. There are surely another 28 of them, probably more.

To think that I should have ALL the business in my little 2 mile radius is insane. I never thought of this business as a monopoly type of business. If you're thinking that way, you've got a lot to learn.

Just figure on $40 per hour when you're working by yourself. If you can hit that goal at the end of the day, you're doing ok and I think most in this business are ok with that number. Don't worry about the other guy, the competitor...most of the customers you want are the customers who don't bother getting mulitiple bids. Seriously.

Example: The VERY FIRST customer that signed up for my service lives 3 houses down from me. She saw me out working on my pansies with my trailer parked in the street. She asked how much I charged. I got my measuring wheel, went down there and got a quote. My quotes include prices for mowing & edging, but also include a la carte fertilization & weed control. I explained to her that my lawn service was weekly, every week, from late March through min-November. She thought I was high for mowing, but did sign up for weed control. (At the time, she said she liked to work in the lawn, so she'd mow it herself.)

About 10 days later, I see a guy in front of her house mowing and edging. He was running out of a pick-up with no trailer. No signs. It was a Saturday, so this could well be his part time job. He was using a line trimmer along the sidewalk and curb.

At first, it bothered me. Why would they hire someone else when I live right down the street and they KNOW I'm in the business? Well, that guy was back again yesterday (Saturday) exactly two weeks later. Bottom line, they were shopping price and they want it mowed every other week. I DO NOT WANT CUSTOMERS WHO MAKE THEIR DECISIONS BASED ENTIRELY ON PRICE. They don't care about professionalism or dependablility. As for me, as soon as I hit that lawn with the Nitrogen next week, and the temperatures get into the 80's next week as forecasted, that clown will be wondering what he's doing wrong when it takes him 1-1/2 to 2 times (or longer) to earn the same money that seemed so easy the first two cuts. He'll have to slow down the pace with his mowers...no two ways about it. And the lawn won't look as nice since he'll likely be cutting off more than 1/3 of the grass blade.

Good chance that guy will just "not show up" later this summer. But they still probably won't call me to mow because in their mind, mowing is uneducated labor worth about $10 per hour. They can have their opinion. That's fine with me. Chances are, I'll make more than they make next year. There are several operators here in Dallas reportedly making well north of six figures.

As for doing work to break even...that's insane. 110 degree heat here in Dallas during the summer. No way in hell. $30 per hour is pushing the envelope for me. When I'm working, my goal is $40 per hour by myself.

Later,
DFW, TX

[lawnboy]

Thanks for the posts guys. We have a area in town, which is very visible. We have about 8 of the 10 lawns there. It is buy a walmart. We decided on one of them to breakeven on some work. On the chance of picking more business off of it. I agree dont do anything for nothiong. We consider this a advertising aid.