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Let it Grow
06-22-2003, 05:11 PM
How many of you actually get $1 per minute? I cannot charge even close to that or I won't get any work! Am I not getting into the right neighborhoods or what. How can you charge that much???

tiedeman
06-22-2003, 05:16 PM
we actually get $1.10 per minute for mowing

tiedeman
06-22-2003, 05:18 PM
after a while you will start to weed out the serious customers. The ones that are totally serious about their lawn, but of course those are also the picky ones. For us, we just made the switch overnight. We were and still are, taking on lots of customers so we thought that the best thing to do is to raise the price to eliminate the non-serious ones. So far, it has worked great.

grassyfras
06-22-2003, 05:24 PM
What kind of equipment are you using. That makes a huge difference. I use a 36" so I don't expect to make $60 an hour its more like $30 to $40 after drive time. But if I had a 52" hydro I probably could come closer to $60 or $50 an hour. Also, you can't be afraid to charge more. Everyday I realize that I should be getting more for a certain job and then I'm actually getting and wonder why I'm not charging more and I bet that most of my customers would pay alittle more.

Let it Grow
06-22-2003, 05:29 PM
OK that makes more sense. We use two 21" Honda hydros. We have mostly smaller lawns, and just started this year. We usually are getting $35-$40. When I upgrade to a larger mower (hopefully next year) I should be pulling in right around $60/hour.
I will weed some of the cheapos out also, but right now I just need to stay busy even if I'm not making quite as much as I would like.

T.E.
06-22-2003, 05:31 PM
I have a question? A dollar a minute sounds good, but is that with a 21" mower that you are getting $1.00 a minute? or is that with a 52" Z rider? (Example) I pull up to a property at 12:00 o'clock I mow,edge,trim,blow, (with a 21" mower) completely done back in the truck at 1:00 o'clock at a dollar a minute I need $60.00 dollars for this property. (Example) The same property, but I use a Z rider,and I'm done in 25 minutes do I charge $25.00?

This is why I don't allways charge a dollar a minute, I have a property that I do that I can do in less than 50 min. and I still get aver a dollar a minute.

BSDeality
06-22-2003, 05:32 PM
keep in mind when people are charging $1/min or there abouts they're using quality commercial machines and technique.

The other day i was talking with a younger guy that asked me what i charge for lawns and i said usually it works out to about $1/min and he had this look of "holy ****" in his face. He said "i've got some yards that take me almost 2 hours to do and i'm only getting $30, i guess i better see about raising my prices." I said "well, what kind of machine do you have?" He said "a 21" craftsman and an electric blower and weedwacker." I ended the conversation with "yah, sounds like you're getting jipped alright." :dizzy: :dizzy:

Let it Grow
06-22-2003, 05:36 PM
I run the best commercial mowers I can buy here in Walla Walla, and I only hire good hard workers with experience. I am fully licensed too, but there are a lot of guys out there with none of that who can beat my price, but our lawns always look better!

tiedeman
06-22-2003, 05:46 PM
we don't charge a dollar a minute. That is how much we have to make during the day in order to cover overhead costs. Sometimes we make more, like around $1.25 per minute at a job site, but in the end of the day we need to make $1.10 per minute. So at the end of an 8 hour day. 480 minutes at $1.10 per minute we need to make at least minimum $528 gross in that day.

Lawn-Scapes
06-22-2003, 06:53 PM
tiedeman.. What do you mean by "we"? Does that mean two of you?

To the original question.. Around here it would be tough to average $60/hr... I can do $40/hr consistantly.

DLS1
06-22-2003, 08:19 PM
This comes up from time to time about hour much per minute.
You got to talk apples to apples.

The better question would be what is you minimum charge per yard and what is typical square feet for that minimum. Also what part of the country do you live. Then people can expand upon that the yard is so much $ per square feet over the minimum. If your getting same as everyone else then you know once you get better producing equipment then you can get to that $1 minute.

T.E.
06-22-2003, 10:09 PM
tiedeman, Thanks for the answer on the dollar a minute. That clears up my misunderstanding. I can see what your are talking about. Thanks again :)

Gr grass n Hi tides
06-22-2003, 10:29 PM
Originally posted by T.E.
I have a question? A dollar a minute sounds good, but is that with a 21" mower that you are getting $1.00 a minute? or is that with a 52" Z rider.

Through my somewhat limited personal experience I can already see that targeting your market is the way to go. If you are using 21s, then mostly smaller properties would be a better fit for your equipment. Volume is probably where it's at for you.

I've got a couple of 1 acre properties which I cut with my 48 hydro. It takes me longer to cut them than a guy with a 60 Z rider, but if I want those properties then I have to bid close to what the guys with Zs charge. Sure, I get paid pretty well but looking at the big picture I would probably do better to replace these larger properties with, say a couple of mid size yards I can finish quicker in less time.

The property owner always sees that they are paying for a service. We LCOs always try to sell time. So, keeping a tight route (something I am working on) and matching your accounts to equipment is very important.

tiedeman
06-22-2003, 11:41 PM
Originally posted by Lawn-Scapes
tiedeman.. What do you mean by "we"? Does that mean two of you?

To the original question.. Around here it would be tough to average $60/hr... I can do $40/hr consistantly.

when I say we, I mean a two person crew. The $528 does not cover the landscaping guys though.

Let it Grow
06-23-2003, 01:31 AM
[i]

I've got a couple of 1 acre properties which I cut with my 48 hydro. It takes me longer to cut them than a guy with a 60 Z rider, but if I want those properties then I have to bid close to what the guys with Zs charge. Sure, I get paid pretty well but looking at the big picture I would probably do better to replace these larger properties with, say a couple of mid size yards I can finish quicker in less time.

[/B]

How much time does it take you to cut 1 acre on your 48" ?

TLS
06-23-2003, 07:15 AM
tiedman,

How much do you pay you help then?

Lets go cheap and say $10/hr for your helper. $528 minus $80 equals $448 net.

That brings it down to $0.93/hr then.

And thats with CHEAP help!


Some days I get $60+ and somedays (LIKE TODAY!!!) I won't come close!

tiedeman
06-23-2003, 04:52 PM
Originally posted by TLS
tiedman,

How much do you pay you help then?

Lets go cheap and say $10/hr for your helper. $528 minus $80 equals $448 net.

That brings it down to $0.93/hr then.

And thats with CHEAP help!


Some days I get $60+ and somedays (LIKE TODAY!!!) I won't come close!

what do you mean by $60 per day? Is that all your net is per day? All my guys are on salary pay though.

Green in Idaho
06-23-2003, 05:16 PM
It's a big one....
*************
When a homeowner or property manager asks you for a price they don't care whether you use a 21" or a 48". That is the justification for sq ft pricing! But to get to a sq ft pricing I have to use an hourly rate. And an hourly rate is different for everyone based on their situation.

Just like T.E. said using a flat hourly rate doesn't make sense when you change equipment or gain efficiency.

If 10,000 s.f of turf is worth maybe $60 in ABC town. Mow in two hours with a 21" and you have $30/hr. Mow it in 60 minutes with a 48" and you have $60/hr. It's still 10,000 sq. feet and it's still worth $60!

But if you can get to the point of a price per square foot, THEN you can compare your rate to someone else. IF you know your time and cost to mow 10,000 square feet you can ask someone else their time and cost for the same coverage. Then you know if you are more/less efficient.

Instead of worrying about others hourly rate, try to determine yours. An example:
________________________

1) Your hourly wage rate ____. That is what you could be earning working for some other business doing the same thing. As an employee you get 40 hours work, but as an owner you usually work more than 40 but often bill for less than 40. If your annual salary could be $28,000 working for someone else and you have to earn that in 1,500 billable hours it is $19/hr (for example) + taxes = $22 bidding. Add a min. $2 for health insurance. And another $2 if you want a retirement benie.= $26/hr
That is for someone who could be earning $28,000 as an employee for someone else. If you would be working for someone else at $8 as an entry-level worker your bidding (billable) can be justifiably lower. Do you work as a technician operating a mower, or are you a manager of 10 people?

2) Your direct cost of operations. The costs “to do the job” on site- equipment, fuel, trimmer line, fertilizer, chemicals, etc. This is should be an exact dollar amount. Gas used in 1 hour, line, etc. = $2.00.

3) Your equipment cost. It is the cost divided by the useful life. Another measure is what would it cost you to rent that equipment per hour if you had to? This is the big difference for different people.
Example a $900 21" lasts 3 seasons for 4,500 hours = less than a buck an hour. But a $9,000 rider for 4 seasons (6,000) = 1.50. Plus all the other equipment on the trailer. Estimate $3/hr for a full trailer. Bidding for applications and installation this obviously sky-rockets.

4) Your indirect costs of operating. The cost of bringing your truck to the curb and related expenses related to that job (payment, insurance, fuel, dumping fee for waste & clippings, time to bid it, bill it monthly, customer service along the way). Truck + maintenace $3/hr.

5) Your overhead costs of operating. Those things you pay just to be in business and are not for any specific job: Licenses, cell phone, office electricty, renting garage space from your wife (parents)(self), storage space from your wife, advertising, etc.) Take the total of these for the whole year and divide by the # of hours you work. $10,500 / 1,500 hours for example. = $7/hr

6) Then you add your planned profit. If you could be making $28K as an employee you should be getting 'extra' for being in business of 10$-20% more ($2,800- $5,600). $4,500 /1,500 hours = $3 each hour for profit. Let's see how that totals up.


HOURLY that is:

$26 Wage
$ 2 direct expenses
$ 3 equipment used
$ 3 truck & indirects
$ 7 for overhead
$ 3 for profit
___________
$44 per hour.

________________

With the equipment in this example, the owner can mow 10,000 sq feet in an hour so the rate is $4.40 per 1,000 square feet. If they equipment was faster and takes only 40 minutes = $2.90/1k.
_______________


Owner gets compensation of $29 for each hour worked. = $43,500. But working a real 60 hours a week for 42 weeks and easy street for 2 months. = $17/hr.

Going the other direction>>>
If an owner has a full schedule to achieve 1,500 hours of billable hours in the year:

$66,000 Gross
$ 3,000 fuel, trimmer line, and direct expenses
$ 4,500 equipment
$ 4,500 truck, ins, & maint
$10,500 overhead exp
$28,500 wages
$ 4,500 S.E. taxes PAID
$ 3,000 insurance PAID
$ 3,000 IRA contribution
$ 4,500 profit
___________


These are NOT exact figures. It is only an EXAMPLE of a process one can use to get to their hourly rate and then to a budget based on projected billable hours.

The budget can then be used as a balance against the hourly. Does it seem reasonable to spend $4,500 on a truck for one year? $375/mo average. or $400/ for 9 months and $300 for 3 months of winter. Looks good here, but how about for YOUR situation.

Does 1,500 billable hours seem reasonable for YOU? If not divide the annual amounts by whatever you can work to determine your hourly.

Notice there is A LOT of room for fluctuating in the wage and equipment expense. Based on the cost of you equipment ($5,000 or $50,000) the HOURLY rate can change dramatically. That is the difference between guys not accounting for their equipment or overhead and coming in with a low bid but they think they are doin great 'cause they put in $20/hr for themselves and figure that is a good rate.

How does one go from $30 up to $60 and justify it? Either more expensive equipment, hirer rate for their wage, more overhead, OR less hours to bill. This example has $66,000 of expenses. IF an operator has only 1,000 hours for work to recover that, the rate has to go up! Or if you start off charging $55 and can get it, you only have to work 1,200 hours instead of 1,500 to make the same cash! Of course if one can bill for more than 1,500 hours then the fixed costs like a truck payment can be spread out over more hours in order to either lower the rate or make more profit.

If your market rate is higher than your cost based rate, GREAT that’s money in your pocket. Charge as much as you can! But also know the minimum you have to charge to make money and use it when you need to be “competitive.”

**************************************
My POINT is a person has to go through their costs, their wage requirement, and their expected budget to come up with the numbers. Using someone else's rate is the same as throwing dice.

And someone who just pulls $60 out of their butt without having some numbers to back it up ought to be in politics! And someone accusing someone else of paying themself $15/hr as too low needs to evaluate the market for a wage for a person chasing a mower.



Pay yourself a wage, pay expenses, recover equipment capital casts, get a return on your investment, and make a profit.

Pricing is simply adding the components together and being sure to include ALL components.


For those quoting $60/hr, I’ll guess its based on charging $30 for a 30minute mow or something like $44/hr with a $10 base = $32 for a 30 minute mow. $60/hr for a small job may be common, but try bidding $60/hr for a 32 hour job and see where you place with other bidders. And then figure your close rate. Win some, lose lots???

The bigger the job the more your hap-hazard bidding will affect you. :dizzy:

brucec32
06-23-2003, 05:42 PM
Originally posted by tiedeman
when I say we, I mean a two person crew. The $528 does not cover the landscaping guys though.

So you're making $.50/minute per man hour, then? Obviously people need to be clear that we're talking per man-hour, since a 3 man crew needs to make more per hour than a one man operation.

BSDeality
06-23-2003, 05:47 PM
Green In Idaho.

Excellent post. I learned about overhead this past semester in an accounting class and my instructor said basically the same as you do. its not what you charge compared to your competition, it's knowing your numbers and knowing a realistic figure of your overhead gauged off a constant or near constant driver. (gas/week or small parts/month etc)

ULTIMATE LAWN
06-23-2003, 05:53 PM
I am currently using a computer program adapted for lawncare whereby we can simply enter the area, # of obsticles, length of walls-walks & the type of mower that will be used. The program will then generate a quote based on our expected hrly.

Even factors in # of trees for fall clean-up estimates.

brucec32
06-23-2003, 06:06 PM
GreenInIdaho makes some excellent points. I see so much WAG'ing in regards to pricing out there that it'd be funny if it wasn't so tragic. For every guy who's charging an old lady $45 for a modest lawn that takes 15 minutes for one man to mow, and getting away with it, there is the poor guy who is getting $25 for a lawn that takes him an hour or more to do.

I would, however, point out that per-sq foot is, like many other methods, a somewhat flawed way to compare prices since lawn types vary so widely. An operation set up to handle small but intricate high end lawns with wb's can't be compared on a "per sq foot" basis to a mow/blow/go operation that is set up to mow huge areas with 60" ZTR's .

I think the key element is time, and if we make the assumption that you are always using the most efficient equipment available for the type lawns you mow, then time can be compared unit-for-unit against others to see how you stack up.

I have found that the difference in equipment costs for a more productive mower are minimal vs. the labor savings. A $2500 basic wb and a $7500 ZTR are vastly different in capabilities, ON SOME TYPES OF LAWNS, and yes, the ZTR costs more to operate. But when you're dealing with $60/hour units of revenue, the $1-$2/hour difference in operating costs becomes a non-factor, especially when compared to the increased productivity. Conversely, on some types of properties, the ZTR isn't much faster, or even gives an undesireable cut, and the added costs may not be worth it.

Other factors to consider:

1. $1/min by an owner operator is pretty good.

2. Getting consistent (accounting for damage they do, absenteeism, training costs, etc, drive time for 3 men vs. 1 owner operator, etc) $1/min productivity out of a crew of employees would be great.

3. Is your " $1per minute" figure arrived at only after a long drive to a big property, or is it close by? Does it factor in drive time and other down time or not?

4. What is the "cost" in terms of fatigue? I know I take on some lawns for a little less because they are much easier to do physically than others. Even guys who hire employees should note this. Send your guys to work every day doing nothing but mowing hills and hand weeding beds and you will have a harder time keeping good help than if you're sitting them on ZTR's most of the day.

5. What is the "cost" in terms of stress, conflict, and customer turnover? Some high end properties pay very well, but are a PITA to manage and deal with. Some discount this, but I would rather make a little less and deal with the easy customers. Life is not all about money. $.80/minute for properties I never hear from would be welcome more than $1.10/minute dealing with people I get stomach pains from every time I'm there.



You gotta find your niche. But what I have found is that if you are priced too far above "market rate" you will eventually lose most of those customers as they "wise up". And if you are too far below "market rate" you will not make enough money to satisfy yourself for the effort involved. Some guys have a philosophy of "stick it to them" but I notice that they tend to spend a lot more hours hunting for customers, handling problems, and dealing with stress than I would care to.

There is no "right" way to price, but I think it should include more than just one or two factors, as much as we'd like it to be that simple.

Turf Medic
06-23-2003, 06:18 PM
Originally posted by ULTIMATE LAWN
I am currently using a computer program adapted for lawncare whereby we can simply enter the area, # of obsticles, length of walls-walks & the type of mower that will be used. The program will then generate a quote based on our expected hrly.

Even factors in # of trees for fall clean-up estimates.

What is the name of the program that you are using???

Let it Grow
06-23-2003, 08:17 PM
My plan is to buy a bigger mower next year, so I have been bidding at a price where I can make a decent profit this year, then I'll just keep my price the same or raise it just a little next year, and I'll be getting the same amount, but it will take less time. Sound like a good plan???

Green in Idaho
06-23-2003, 08:19 PM
Originally posted by BSDeality
... and knowing a realistic figure of your overhead gauged off a constant or near constant driver. (gas/week or small parts/month etc)

Yes, good cost drivers are in time, or in physical metrics.

Metrics:
Square feet of turf
Number of bushes
Linear feet
Miles driven

etc....

I agree there is no "right" way or easy way. And straight price per sq.ft is not comparable when comparing different property. And one'sr costs are based on their type of properties served. IF all of yours are wide open and mine are postage stamps, our costs to serve the same footage is way different.

BUt if I have a 10,000 property this week and you come do it next week. Then we talk some TRASH... lol....

Gr grass n Hi tides
06-23-2003, 08:38 PM
Originally posted by Let it Grow
How much time does it take you to cut 1 acre on your 48" ?

Sorry it took me a while to get back to you - I logged off and crashed last night. As a matter of fact I just got back home cutting one of my one acre (actually 9/10 acre) properties. This one though has quite a few obstacles which change constantly because the homeowner is an auto mechanic & his back yard is a revolving door of motorized vehicles. It takes me about 70 minutes and I get $50 for it. A guy on a bigger Z gets this one done quicker and is making more in the target area; however, I'm happy this year to have this account.

The yard I cut right before I did this one - a smaller property that took me 31 min. tonight & $35 for the job.

I had another smaller one tonight that takes 45 min. & it's a $40 job.

Heck, if I were to cut these two smaller properties with a 21er I'd be there an hour + for each one & suddenly I'm way out of the target earning target area.

Let it Grow
06-23-2003, 10:46 PM
I'm using two 21's so that makes it much fatster than just one, but then I have to pay for labor too. I'll be looking into getting a larger mower for next year and was just curious to see what I could expect as far as the difference in time. Your post definitely helps me out...thanks!

LAWNGODFATHER
06-26-2003, 06:54 PM
Originally posted by Turf Medic
What is the name of the program that you are using??? Excel I bet

ULTIMATE LAWN
06-26-2003, 07:20 PM
The program was a special customization & should be avail. for mass purchase in the near future.

Popsicle
06-26-2003, 07:31 PM
Originally posted by Let it Grow
How many of you actually get $1 per minute? I cannot charge even close to that or I won't get any work! Am I not getting into the right neighborhoods or what. How can you charge that much???

Look and act professional and you can get the higher paying accounts. I also started this past fall and a few of my early accounts are far less profitable. A local LCO clued me in on how to ask for, and get, the good ones. I never negotiate price but instead "sell" the potential client on service and integrity.

And yes, it is the neighborhoods! There are going to be those accounts who want the "Walmart" price and then there are the "Nieman Marcus" ones. As it's said, an a** for every seat...

LAWNGODFATHER
06-26-2003, 07:32 PM
Originally posted by ULTIMATE IDIOT
The program was a special customization & should be avail. for mass purchase in the near future. So it does not exist like all that equipment you claim to have.

Lets see those pics, make sure you are in them so we can remove some doubt that you stole the pics from some one else like those MM pics.

drsogr
07-05-2004, 12:10 AM
Whew those are some pretty harsh words!