PDA

View Full Version : What's wrong with this pricing?


zoomer
01-03-2005, 12:51 AM
I'm reactivating my lawn service in a couple of months and am considering the following:

Most of the companies in my area charge around $20-$30 a week to mow a 6,000-9,000 sq. ft. yard. What I am thinking about is offering to do the same yard for $15.00 a week. If I can get, say 100 yards a week @ $15 each, that will be $1500 gross income.

Labor cost for me is $8 an hour and we can manage 100 yards in 3 days with 2 men, plus myself. IOW, it would cost me about $400 labor. That leaves $500 a day, less overhead, for me.

I’m I missing something?

afftandem
01-03-2005, 12:56 AM
what are you mowing with?

MWHC
01-03-2005, 12:59 AM
Why wh0re up the market?? Do some more math and calculate your expenses. You may want to look into what workmans comp, unemployment, insurance, Gas, office work, equip, truck, trailer, etc etc etc cost you. Ah what the hell, at least buy nice stuff so someone can pick it up cheap when you go under.

mbricker
01-03-2005, 12:59 AM
I'll have to be fast here, to beat some of the other guys, who also want to know:

If most every one in your area is mowing this size lawn for $20 to $30 a week, WHY WOULD YOU WANT TO DO THE SAME LAWN FOR $15?

If you are just wanting to get a jump start on building a customer base, let me be the first to warn you, low-balling to get the work very rarely gets you any customer loyalty. What you usually get is a bunch of tightwad customers who will jump ship for the next lowballer to come down the street. And you will get a rude lesson in that if you think you can start off cheap, then raise the price the second season.

But what the he!! do I know?
try it. Maybe it will work out for you.

zoomer
01-03-2005, 01:38 AM
Just to clarify, I have been a roofing contractor for the last 12 years and have done a limited amount of lawn services on the side. All of the usual overhead items are in place--office equipment, trucks, general equipment--but I would need to purchase better mowing equipment if my idea works.

As selfish as it might seem, I'm not too interested in what is good for everyone else, i.e., other lawn service companies, I am mainly concerned about making as much money as possible for myself. (I doubt if they are concerned about me.)

As for my main idea, I have been looking at advertising expenses vs. expected returns and have been wondering if I could just make it easier, and cheaper, by giving a discounted price up-front since most residential customers generally only care about the “bottom line”. Why not give them a "price they couldn't refuse" and be happy making a reasonable amount of money?

Do I really have to go through the same agony that every other person does who starts in this business, and normally fails, or can I just go for the volume that will reap a decent profit?

Thanks for all the replies

K c m
01-03-2005, 01:45 AM
Why wh0re up the market?? .

Why do you say ***** UP THE MARKET. IF he can make money offering cheapers services then let him be. Sucks for you guys with a million dollars overhead. I bought my stuff flat out. :cool2:

Richard Martin
01-03-2005, 03:00 AM
Just to clarify, I have been a roofing contractor for the last 12 years and have done a limited amount of lawn services on the side. All of the usual overhead items are in place--office equipment, trucks, general equipment--but I would need to purchase better mowing equipment if my idea works.

I am going to assume that your lowballing approach to roofing isn't working out or has only been marginally effective or you wouldn't be trying to cut grass. Or is that all of the legal and reputable roofing contractors have run you out of the roofing business? Or maybe the state of Texas took your license?


As selfish as it might seem, I'm not too interested in what is good for everyone else, i.e., other lawn service companies, I am mainly concerned about making as much money as possible for myself. (I doubt if they are concerned about me.)

Why not give them a "price they couldn't refuse" and be happy making a reasonable amount of money?

You are a man who double speaks. First you speak of making as much money as possible and then you speak of making a reasonable amount of money. Which is it?


Do I really have to go through the same agony that every other person does who starts in this business, and normally fails, or can I just go for the volume that will reap a decent profit?

If you are making any kind of money as a roofing contractor why are you in such a rush to cut grass? Slow down, build a good customer base and make a lot of money by doing a top quality job and charging appropriately for it.

There are a lot of us who are interested in raising the industry. We have learned and seen that those who corner the market usually never last long.

impactlandscaping
01-03-2005, 09:29 AM
Why have 100 $ 15.00 accounts instead of looking for 30 $ 50.00 accounts that would accept full service instead of mow and blow???....

olderthandirt
01-03-2005, 09:40 AM
Sucks for you guys with a million dollars overhead Those guys don't even know your around your like a bug on a windshield you hardly notice it and its gone soon enough
As selfish as it might seem, I'm not too interested in what is good for everyone else, i.e., other lawn service companies, Then why would you xpect to get any help from other lco? I'm not like that and will offer this advise $15 is good but if you really want to make some money do them for $10 and you can get alot more jobs :D

Mac

PMLAWN
01-03-2005, 11:18 AM
Richard, Thank you for saving me all that typing time!

yrdandgardenhandyman
01-03-2005, 01:06 PM
I'm reactivating my lawn service in a couple of months and am considering the following:

Most of the companies in my area charge around $20-$30 a week to mow a 6,000-9,000 sq. ft. yard. What I am thinking about is offering to do the same yard for $15.00 a week. If I can get, say 100 yards a week @ $15 each, that will be $1500 gross income.

Labor cost for me is $8 an hour and we can manage 100 yards in 3 days with 2 men, plus myself. IOW, it would cost me about $400 labor. That leaves $500 a day, less overhead, for me.

I’m I missing something?


I see your numbers don't add up. $8.00 labor?? 2 men and yourself?
You won't be around long. Might as well start planning your next failed career. You won't believe it but you WILL fail with this business plan. Have fun with all the PITA customers you're going to have. And have fun raising your prices when you realize you numbers are all wet.

procut
01-03-2005, 01:11 PM
I have heard of many differant guys trying this approach. They all say, "I'm high volume," or "I'm gonna by the Wal Mart of lawn mowing." Guess where they are now, out of business or struggling beyond belif.

MMLawn
01-03-2005, 01:15 PM
When you do it I have a name suggestion for the business for you:


<b>"LowBalling ScumBag Lawn Care Service Who Failed At Lowballing Roofing Service Who Says He Could Care Less ABout All Other LCO's But Ask Them For Advice, INC"</b>

bobbygedd
01-03-2005, 01:17 PM
let me know how your knees, back, ankles, and hips feel after 5 yrs of this"more work at cheaper prices" technique of yours. you are begging for disaster. 2 weeks of rain will wipe you out. a dozen non, or slow paying customers will keep you in a financial tailchase. an injury will destroy you. you will never be able to charge legitimate prices on extras. if you're mowing for $15, then everything else becomes "relative." the $100 hedge trimming job will be expected at $35. an equipment breakdown will kill you (unless a dealer will sell you a new mower at half price) . follow me? mcdonalds can sell hamburgers for 89 cents each, and make it up in volume, the fryer will fry 24 hrs a day, how long will your leggs last?

TClawn
01-03-2005, 01:18 PM
$15.00 for a 6,000-9,000 sqft lot! are you CRAZY? nobody can turn a good profit on that if you have licensing and insurance! then you add in worker's comp and all the other taxes you have to pay and you'll be breaking about even.

my brother and I started off at $15.00 for a 7,000 sqft lot and we were not making that much money even though we were NOT LICENSED AND INSURED at the time. right now the lowest I would go is $25 for a 7,000 sqft lot.

your pricing should be that your not landing all of your jobs. if you are there is something wrong with your pricing.

and as stated before why not do 50 accounts at $30 instead of 100 at $15? less work for you, less overhead and MORE money.

Rollacosta
01-03-2005, 01:36 PM
IMO anyone who cuts the local price down from $30 to $15 deserves to be put through my wood chipper :waving:

cush
01-03-2005, 02:40 PM
If you plan to charge $15 a lawn x 100 over three days with a three man crew you will average :

33 lawns per day with a gross daily income of $495. Paying $8 per man hour to your two employees = 16 man hours at $8 which = $128 after you pay taxes it will cost you close to $200 just for labor add on your overhead and fuel plus your non billable time such as the time it take you to send out bills work on equipment and you will be making less then you employees. You would be much better working for someone else if you are doing this to make income. Otherwise enjoy the long hours and hard work.

landcare pa
01-03-2005, 03:09 PM
YOU ARE BY FAR NO BUSSINESS MAN, you have no clue and you should be the $8 hr guy behind the weed wacker, it`s obvious that you are not a successful roofing contractor, go to a local community college and see if they give a course in common sense!!!! my monthy gas bill is $8200 per month and i am a guy that started in this bussiness with nothing and busted my ass, charged a fair price never the cheapest guy. services sells and $15 per lawn is a joke what are you going to make .50 cents a lawn. do us all a favor go on welfare , i cant afford to pay anymore insurance for someone that doesnt pay any. sorry for venting guy`s but life is to short not to have common sense. :realmad:

Tn Lawn Man
01-03-2005, 03:24 PM
If you plan to charge $15 a lawn x 100 over three days with a three man crew you will average :

33 lawns per day with a gross daily income of $495. Paying $8 per man hour to your two employees = 16 man hours at $8 which = $128 after you pay taxes it will cost you close to $200 just for labor add on your overhead and fuel plus your non billable time such as the time it take you to send out bills work on equipment and you will be making less then you employees. You would be much better working for someone else if you are doing this to make income. Otherwise enjoy the long hours and hard work.

Cush

That is assuming he can do 4 lawns per hour. That would have to be a tight route to maintain that.

I bet it turns out to be more like an average of 3 lawns an hour.

If so he will have to work 11 hours to complete the job. From the day gross income of $495 he now has $175 in labor cost if he is paying under the table and $265 if he goes legit. That leave $230 to pay for everything else. LOL

Good Luck to Him

rgjlawn
01-03-2005, 03:52 PM
THAT IS CRAZY :help: :help: I will bet you the guy has a sears credit card! Get a mower and your in bus. No insurance you name it he does not have it. THIS IS WHAT IS WRONG WITH THIS BUSINESS :help: :help: :help: NOW THIS IS A REAL COWBOY :realmad: :realmad: :realmad: :realmad:

tiedeman
01-03-2005, 03:57 PM
Why have 100 $ 15.00 accounts instead of looking for 30 $ 50.00 accounts that would accept full service instead of mow and blow???....

my thoughts exactly. I may not have that many accounts, but I charge top dollar for those accounts. Why work your butt off for 100 accounts at $15.00 each per time, where you could have 50 and make $30 each on those per time.

zoomer
01-03-2005, 05:50 PM
My, things have really changed on this board since I was last here a few years ago. At that time when someone asked a question he could get an answer without being flamed. I guess over time a “board mentality” has developed here and there are pat answers for every question—especially from the ones who post a lot.

A couple of people mentioned my “failed roofing business” but that’s not quite accurate. It is still profitable but not nearly as much so as it was before 9/11. Before 9/11 we did 100% re-roofs and no repairs. Now we are doing about 20% re-roofs and 80% repairs. The market has been sluggish the last couple of years and I consider myself lucky that I have been able to maintain my business while so many others have gone by the wayside.

I understand the distaste for “low bidders” since I have also faced that the last 12 years as a contractor. However, this is a capitalistic society and if someone can deliver a good or service for a cheaper price, he has a big advantage. WalMart has taken over the retail industry simply by offering the cheapest price.

One reason I am contemplating lower pricing is because it appears to be somewhat difficult to differentiate yourself from the competition in this business. Why would someone pay you $30 to cut the grass when there is someone else at $15? That probably should have been the question to ask.

Thanks again,

coastallandscapesolutions
01-03-2005, 05:55 PM
I'm reactivating my lawn service in a couple of months and am considering the following:

Most of the companies in my area charge around $20-$30 a week to mow a 6,000-9,000 sq. ft. yard. What I am thinking about is offering to do the same yard for $15.00 a week. If I can get, say 100 yards a week @ $15 each, that will be $1500 gross income.

Labor cost for me is $8 an hour and we can manage 100 yards in 3 days with 2 men, plus myself. IOW, it would cost me about $400 labor. That leaves $500 a day, less overhead, for me.

I’m I missing something?

Are you dense or something? $15 a week per yard? I would like to know who your insurance company is because you must be getting one heck of a discounted rate. Labor cost of $8.00 an hour.... :dizzy: and you're paying someone? Who, neighborhood kid at 2 bucks an hour with a puch rotory mower? Workmans Comp will eat you alone.

$400 labor for 100 yards in 3 days with 3 people...... You should be president with those kind of numbers.

splatz100
01-03-2005, 05:59 PM
So what kind of equipment are you going to be using to cut these 100 yards?

olderthandirt
01-03-2005, 06:00 PM
Why would someone pay you $30 to cut the grass when there is someone else at $15? That probably should have been the question to ask

My question to you is why stop at $15 why not $10 or if your really looking for recognition make it $5. There is a standard price that someone is willing to pay for a service, as you said $30 so why would you want to lower that standard to $15 ? That is the question you need to ask yourself

Mac

MWHC
01-03-2005, 06:03 PM
The board has changed over the years. It's really frustrating to watch and see what low-balling does to an industry. Do really believe that Walmart is good for our economy? I won't go on a 1000 word rant but you may wan't to do some reading in between roof jobs. The degradation Walmart has on our economy is enormous. They have put more people out of work than you can count. The gap between upper and lower class is rising. Any correlation to our Walmart induced society? Big and small companies. Just a hint, go the other way with your pricing and raise the standard. Maybe offer a product that is unmatched for top dollar.

oldturf
01-03-2005, 06:03 PM
Can we set this up like a football pot and make bets on how long it will take for him to go out of business?

TClawn
01-03-2005, 06:05 PM
I was not trying to "flame" you with my reply.
there are three "good" ways to differentiate your self from other company's 1. quality of work. 2. quality of work. 3. quality of work.

the reason somebody should take me being higher priced than somebody else is the quality of work I do. the only way to make it in this business is to raise your level of quality high enough that when somebody looks at a yard you do they want their's to be just like it.

by charging $15 a lawn you will attract "budget" customers who will only want you to cut their lawn and not do anything else to improve there property, this kind of customer is a customer you do not want.

by charging $30 a lawn and getting less customers you will be able to take the time to give them a good quality job instead of having to blow through there yard because you've got 30 more to do that day.

A higher price will get you the "loaded" customers who hire you as a luxery and a status symbol. customers like this are great because if there's a yard improvement project to do around the house guess who their going to hire to do it.

packerbacker
01-03-2005, 06:09 PM
I dont know what the economy is like over there but the only people that charge 15 here is the neighborhood kid.

You need a minimum and my suggestion is 30, thats what i use. the only yard i do for less then that is one that doesnt have a backyard and the front has 5 strips in it, takes me 10 min and i charge 25 for it

PMLAWN
01-03-2005, 06:13 PM
My problem with cheap stuff is where does it end. I live in NC where the textile industry has been killed by wanting cheap clothes. The ecomomy can go up or down. But the you can not have it both ways. Looking to pay the least but wanting to get payed the most will not work for that long. Bringing down the average rate of an industry will make all people in it make less. When all the people in it make less they will all spend less. On cars-houses-toys-clothes-and services. Now your customers that sold cars and houses and clothes etc. dont have the money to pay you so you are out of work.
You have a choice to be part of a prosperous ecomomy or the choice of being part of a declining one.

nitrotim
01-03-2005, 06:14 PM
[ I'm not like that and will offer this advise $15 is good but if you really want to make some money do them for $10 and you can get alot more jobs :D

ROFLMAO :D

Richard Martin
01-03-2005, 06:17 PM
My, things have really changed on this board since I was last here a few years ago. At that time when someone asked a question he could get an answer without being flamed. I guess over time a “board mentality” has developed here and there are pat answers for every question—especially from the ones who post a lot.

Ehh... I've been here a while and the replies have always been the same regarding lowballers.

I understand the distaste for “low bidders” since I have also faced that the last 12 years as a contractor. However, this is a capitalistic society and if someone can deliver a good or service for a cheaper price, he has a big advantage. WalMart has taken over the retail industry simply by offering the cheapest price.

I knew Walmart would enter this thread at some point. The truth about Walmart is they are starting to feel the years of store-wide loss leaders. Prices have gone up especially this past holiday season. While it is true that Walmart does give certain items away they are now increasing prices on most other items beyond what other retailers are charging. Target is making serious inroads into what has traditionally been Walmart territory and they're not giving the store away to do it. Additionally, most of the items you find in a Walmart are junk anyway.

Why would someone pay you $30 to cut the grass when there is someone else at $15? That probably should have been the question to ask.

You have to find the clientle that is willing to pay more for a better service. There are people out there who will willingly pay more for the secure knowledge that you will service their lawn every week come hell or high water. On 2 hands I can count the number of cuts I've skipped in 10 years. I have a very good reputation for always being there. You also need to make sure that you do the entire job every time. Don't skip a little grass here or trimming that there. Consistancy is key. While one of my favorite mottos is "You need to set the expectations for the customer" you must also do the same job every time once you set the expectations.

I could go on for hours.

splatz100
01-03-2005, 06:18 PM
It is people like you that will soon ruin this industry

packerbacker
01-03-2005, 06:19 PM
It is people like you that will soon ruin this industry






BS, its been the same since it started and it will be the same till the end, one bad apple doesnt ruin the bunch

Shuter
01-03-2005, 06:20 PM
Why cheap out if you can get what the market bears???

TClawn
01-03-2005, 06:25 PM
don't bash him too much. I think that he was only throwing out a mode of doing business. I'm sure that he knows about undercutting the market. if he does not the we should steer him away from that. but venting our hatred of local lowballers on him will not help him at all. but it sure does feel good doesn't it. :)

Lux Lawn
01-03-2005, 06:28 PM
TCLAWN
I was wondering whats the going rate over in Hawaii for the basic yard or hourly?
If you don't mind me asking.

oldturf
01-03-2005, 06:31 PM
Zoomer has to be setting back and having a good laugh, because this has to be a joke.

lawnwizards
01-03-2005, 06:32 PM
WalMart has taken over the retail industry simply by offering the cheapest price.


thats not always true. Wal-Mart has led people to believe they have the lowest price when in reality K-Mart and the others have competitive if not lower prices.

Tn Lawn Man
01-03-2005, 06:35 PM
The market has been sluggish the last couple of years and I consider myself lucky that I have been able to maintain my business while so many others have gone by the wayside.





Maybe, just maybe the reason that market is so sluggish is because of all of the low bidders.





I understand the distaste for “low bidders” since I have also faced that the last 12 years as a contractor.




Then why in the world would you want to come into this industry and do the same thing that was done to you in your industry. And, you wonder why you are getting "flamed"





One reason I am contemplating lower pricing is because it appears to be somewhat difficult to differentiate yourself from the competition in this business. Why would someone pay you $30 to cut the grass when there is someone else at $15? That probably should have been the question to ask.

Thanks again,

The way you differentiate yourself is to build a reputation upon quality of work and being a good company to do business.

How much quality do think you are going to be able to bring to the customer when you are concentrating on volume? And, believe me, in the lawn industry you don't want customers that "volume selling" brings in.

You spoke of Walmart. You ever see the return line at Walmart. Wait till you have a "return line" of your own, so to speak.

This is not meant to be a flame.....just facts.

TClawn
01-03-2005, 06:50 PM
TCLAWN
I was wondering whats the going rate over in Hawaii for the basic yard or hourly?
If you don't mind me asking.

I can get $60 per hour for landscaping work. and about $30-$40 for lawn care.

hedge trimming jobs are by the foot. but it is almost always put in with a maintenance package.

Lux Lawn
01-03-2005, 06:53 PM
I can get $60 per hour for landscaping work. and about $30-$40 for lawn care.

hedge trimming jobs are by the foot. but it is almost always put in with a maintenance package.

Sounds good I thought the pay would be pretty good over there.
We get between $30-$40 per hour.

splatz100
01-03-2005, 07:03 PM
how long does it usually take yall to finish??



thanks

Likestomow
01-03-2005, 07:29 PM
Why wh0re up the market??

Zoomer is a business man and is thinking of ways to increase his business. Yet because he has the obnoxious idea that he can work cheaper than others on this board, he is branded a looser, no worse yet, the destroyer of the industry.

I would like to pose the question: Who in this business determines EXACTLY where the line is between Lowballer and Professional?

As a Solo Operator, I wanted to gross at least $60 per hour while on a job… hey that’s great money… why not? But now that I have employees, I am looking more at squeezing out a 30% - 40% profit from my business. The main thing I am looking for is PROFIT. If I can’t get 30%, is 20% so bad that I should quit the business? What about 15%? What about 10%? What about going for volumn?

Why not consider JUSTMOWIT.COM and ask yourself is this guy nuts too? He also works so “cheap”! He must be a bad businessman because he works so cheap. But don’t consider how much money he makes during the season because he does it the wrong way.

Guys, we live in a Free Market economy and the laws of supply and demand set the prices for our services. Demand certainly has elasticity, which allows for some to be able to charge the maximum for their service, but not everyone can. The majority of demand is in the middle, and that is where price can sway decisions.

It is hard to compete with the guy who has an old car or truck, a small trailer, a 36” mower, works part time after his other job, and is so happy to get $20 handed to him at when he is done mowing. Is he licensed, insured or paying taxes? Certainly not! But hey, he’s not going anywhere soon. In fact, his numbers are growing and because of that, equilibrium for our service is coming down every year. Only the strong will survive in the future. I plan to be one of them.

packerbacker
01-03-2005, 07:35 PM
Who in this business determines EXACTLY where the line is between Lowballer and Professional?






Anyone here with over 3000 posts!

TClawn
01-03-2005, 09:14 PM
Sounds good I thought the pay would be pretty good over there.
We get between $30-$40 per hour.

remember that everything else that we buy here has to be shipped from the mainland. that makes it much more expensive.

It usually takes us about 25 minutes total for a 7,000 sqft lot.

DennisF
01-03-2005, 09:26 PM
I'm not flaming you or your idea. But I will tell you up front that your business plan will not work. Don't take my word for it...try it and see. You can not make money with that business plan. You are not the first guy with the idea to cut prices for lawn service and you probably won't be the last.

I've been doing this for over 30 years and I have yet to see even one low priced lawn service survive more than a year or two. Once they figure out that they are losing money, they dis-appear.

I would wish you good luck...but...you'll need a lot more than luck.

landcare pa
01-03-2005, 09:57 PM
FOR ONE I DONT CARE IF THIS GUY WORKS FOR WORMS? the housing industy is at a all time high .if you are not busy there`s a reason behind it! and it might be that you work sloppy have crappy trucks,or you dont show up . i have a roofing buddies around me that do $2.5 million a year in roofing and started with nothing. if you want to be a cheap guy im happy for you.but dont make a post in a room on how you are going to cut lawn professionals price's in half and think everyone is going to hand you the golden mower award. do good work,have a good work ethic,and do the right thing . i started in this business15 years ago before the big gold rush and have 34 employees this past season most have health plans,and company truck`s. i made a bussiness out of this. and i hope you can but dont cut people`s price by half. if you where in my market and did that i bet i turn out the winner,we have a fleet of all clean new trucks nicely lettered and take pride in are work.

bobbygedd
01-03-2005, 10:06 PM
FOR ONE I DONT CARE IF THIS GUY WORKS FOR WORMS? the housing industy is at a all time high .if you are not busy there`s a reason behind it! and it might be that you work sloppy have crappy trucks,or you dont show up . i have a roofing buddies around me that do $2.5 million a year in roofing and started with nothing. if you want to be a cheap guy im happy for you.but dont make a post in a room on how you are going to cut lawn professionals price's in half and think everyone is going to hand you the golden mower award. do good work,have a good work ethic,and do the right thing . i started in this business15 years ago before the big gold rush and have 34 employees this past season most have health plans,and company truck`s. i made a bussiness out of this. and i hope you can but dont cut people`s price by half. if you where in my market and did that i bet i turn out the winner,we have a fleet of all clean new trucks nicely lettered and take pride in are work.
that's right, do all these things, and in 20 yrs you'll be working for the same pay as u do now

stumper1620
01-03-2005, 10:06 PM
[QUOTE=TClawn]$15.00 for a 6,000-9,000 sqft lot! are you CRAZY? nobody can turn a good profit on that if you have licensing and insurance! then you add in worker's comp and all the other taxes you have to pay and you'll be breaking about even.

i don't think he is planning for these trivial items, you know the IRS don't matter type thinking, i don't need insurance types ( i have a lot of them around here)
makes for some tough competition when they don't pay the expense and i do. i just cannot believe the commercial lots that have these guys do them.

newbomb
01-03-2005, 10:26 PM
$495 per day will not support 3 people seriously addicted to narcotics!!! Your going to ask 2 guys to bust a$$ and do 33 lawns a day for $60 to $80 per day? That will last part of 1 day. Se Habla?

BobwithECLC
01-03-2005, 11:27 PM
Who in this business determines EXACTLY where the line is between Lowballer and Professional?






Anyone here with over 3000 posts!

Sweet I just found the way I can get rich and never break a sweat. I am going to sit here and answer every thread that comes along. When I have topped the magical 3000th post. I am then going to become the industry guru and start a consulting firm. This is great I never thought of not having to have experience in an industry to be able to determine who is a low baller or not. Sorry about this post I just have a sarcastic side.

Metro Lawn
01-04-2005, 12:04 AM
This industry should take some lessons from other service people. If I needed a plumber or an electrician, I would prey that zoomer was in that business. I can call everyone from A to Z in the phone book and may get a few dollar difference in rates. What I won't find is a plumber, electrician, ect for say $20 an hour. These people keep the rates within reason. Under bidding by 50% would never happen. It is bad for the industry as a whole. They know that it will eventually hurt them too. No good can come of this. I myself would like to see some type of national certification and guidelines applied to this business to keep the rates where they should be. Maybe a committee of lcos from around the country. They can set base rates for services in certain areas. Then the only competition would be from quality and service, not being cheapest.

I can see it now. If by some chance zoomer makes it and becomes a large full scale operation. Will he still be cutting lawns for $15, or will he be here complaining about the lowballers??????

Likestomow
01-04-2005, 12:39 AM
Who in this business determines EXACTLY where the line is between Lowballer and Professional?


Anyone here with over 3000 posts!


Well the question still stands. There can be lots of goofy answers, but I'd like to see some serious answers.

I have been on this forum for probably longer than 80% of most, yet I don't have a thousand posts. I'm not going to knock those who have logged more entries than me, but I log on for business reasons, not entertainment.

Likestomow
01-04-2005, 12:40 AM
I kind of got sidetracked on Zoomer’s original offering, so here is my take on his original proposal.

Okay, if you want to explore the idea of volume business, I’d go with being $10 less than the competition. That means a range of $15 - $20, not a straight $15. If your cliental is split say, 50/50, you would have a weekly gross of $1,750.

With the right equipment setup, two people should be able to complete about five of these small properties per hour, or 40 per eight-hour day. I am assuming you will have your business clustered so drive time will be minimized. Two men earning $12 per hour (cost = $14 per hour) will cost you $224 per day. I know you are wanting to pay your people $8 per hour, but that doesn’t seem to be a very realistic wage to be able to attract and hold capable people. After all, your goal is to get the work done each and every week, not pinch pennies on labor.

So your gross would be about $583 per day minus $224 for labor. That would equal $359 for a net gross each day. Say your overhead was high at $66 per day, that means you would net $293 each of your three work days, for a weekly profit of $879, or 50% --- $879 times 33 weeks would yield about $29,000 per year. If you run your two-man lawn crew in addition to your current roofing business, that would be a very excellent added source of income.

splatz100
01-04-2005, 12:44 AM
Likestomow

that is a good way to put it

packerbacker
01-04-2005, 12:44 AM
Well the question still stands. There can be lots of goofy answers, but I'd like to see some serious answers.

I have been on this forum for probably longer than 80% of most, yet I don't have a thousand posts. I'm not going to knock those who have logged more entries than me, but I log on for business reasons, not entertainment.





If you want a serious answer ill give you one.

IMO the only people who try to find a line between a lowballer and a legitimate business are the ones who are so worried about losing customers they resort to calling others out on how they do things.

i_plant_art
01-04-2005, 01:16 AM
u mak me sick by saying that you want to undercut people so that you can get work. UGH guys like you i laugh at cause i know a few years from now ill be mowing the grass at the grocery where youlll be sakcing groceries you make me sick to say that!

packerbacker
01-04-2005, 01:17 AM
I rest my case...

Richard Martin
01-04-2005, 04:47 AM
I would like to pose the question: Who in this business determines EXACTLY where the line is between Lowballer and Professional?

No one ever said he wasn't a professional. But zoomer did say that he was thinking about underbiding the market to get work.

Most of the companies in my area charge around $20-$30 a week to mow a 6,000-9,000 sq. ft. yard. What I am thinking about is offering to do the same yard for $15.00 a week.

This is the definition of lowball from Princeton University:

v : make a deliberately low estimate

So stick that in your pipes and smoke it.

Stephen M.
01-05-2005, 12:25 AM
I also have a problem with Zoomer planning to undercut the Lawn Professionals.

I question his own professionalism when he says he cant give a rats arse about how it affects other LCOs. If Zoomer understands the lowballers of his own profession, why does he want to screw with us?

I personally think he ISN'T a roofing professional, and won't be much of a LCO Professional.

And Yes, I am flaming you Zoomer. Since you have been on this board previously, you should have understood OUR profession much more. Any MORON can cut grass and break even; but it takes a Landscape Professional to know how to make that lawn look like a million bucks and make money to stay in business for a lifetime. :realmad:

Soupy
01-05-2005, 07:05 AM
I kind of got sidetracked on Zoomer’s original offering, so here is my take on his original proposal.

Okay, if you want to explore the idea of volume business, I’d go with being $10 less than the competition. That means a range of $15 - $20, not a straight $15. If your cliental is split say, 50/50, you would have a weekly gross of $1,750.

With the right equipment setup, two people should be able to complete about five of these small properties per hour, or 40 per eight-hour day. I am assuming you will have your business clustered so drive time will be minimized. Two men earning $12 per hour (cost = $14 per hour) will cost you $224 per day. I know you are wanting to pay your people $8 per hour, but that doesn’t seem to be a very realistic wage to be able to attract and hold capable people. After all, your goal is to get the work done each and every week, not pinch pennies on labor.

So your gross would be about $583 per day minus $224 for labor. That would equal $359 for a net gross each day. Say your overhead was high at $66 per day, that means you would net $293 each of your three work days, for a weekly profit of $879, or 50% --- $879 times 33 weeks would yield about $29,000 per year. If you run your two-man lawn crew in addition to your current roofing business, that would be a very excellent added source of income.


I hope you are joking! ROTFLMAO!!!!!!!!!!!!!!!!

zoomer
01-05-2005, 05:48 PM
What I was looking for was not put-downs and insults--I can get those at home--but input about a pricing plan to re-activate my lawn care business. Unfortunately, that apparently was too much to ask from many of the self-proclaimed “professionals” who post on this board.

However, hidden among the many insults were a lot of good points I had not considered and that have convinced me $15 is probably too low. So, I will scrap my $15 idea and raise it a bit while still maintaining a lower rate than the competition.

For the large number of people who are afraid of “lowballers” I suggest you take a course in basic economics. In our society “price” is (mainly) determined by the market, not by you nor by me. You might also want to look at it the other way—if I am charging $15 and you are charging the $30 for the same service, why aren’t you considered a “price gouging scumbag”?

Terms such as “lowballer” and “price gouger” have no relevant meaning, the only thing that matters is if someone can run a profitable business at the price he is charging.

Soupy
01-05-2005, 07:13 PM
What I was looking for was not put-downs and insults--I can get those at home--but input about a pricing plan to re-activate my lawn care business. Unfortunately, that apparently was too much to ask from many of the self-proclaimed “professionals” who post on this board.

However, hidden among the many insults were a lot of good points I had not considered and that have convinced me $15 is probably too low. So, I will scrap my $15 idea and raise it a bit while still maintaining a lower rate than the competition.

For the large number of people who are afraid of “lowballers” I suggest you take a course in basic economics. In our society “price” is (mainly) determined by the market, not by you nor by me. You might also want to look at it the other way—if I am charging $15 and you are charging the $30 for the same service, why aren’t you considered a “price gouging scumbag”?

Terms such as “lowballer” and “price gouger” have no relevant meaning, the only thing that matters is if someone can run a profitable business at the price he is charging.

What makes you think that you can operate at such a lower cost then your competitors? Your whole business plan or lack there of is why you will most likely not succeed.

Please don't use the thoughtless business plan (if you can even call it that) posted a couple of post up and think it will work.

What equipment are you planning to purchase? What is the cost for said equipment? What replacement plan do you have set for this equipment? How much have you allocated for advertising?

Give us more info, other then "I plan on being the cheapest guy in town". Let us know how much your indirect expenses are and how much you project your direct expenses will be etc.

You mentioned that you plan on doing 100 lawns in the 7-9K range and plan on doing this in 3 days with a 3 man crew. Can you tell us more about the layout of these properties (gates etc.)? How many hours total are you allowing for these 3 days?

Do you already have employees lined up? If not, are you sure you will be able to find 2 part time workers that will be happy with low pay and few hours? Most hard workers will want full time hours. Usually lazy people look for part time jobs.

How do you plan on billing customers? Monthly invoicing will mean that you will not have even cash flow all the time and if a couple of customers stiff you then you have really lost big since you didn't have much of a profit to begin with. If you collect weekly then you might want to add 5 minutes (some will take longer and some will have check ready) to each property. That is 8 hours right there and chances are you will have more wasted time with employees standing around waiting too.

If you can come up with some operation cost. Then maybe we can help you out. Just remember that after you figure your cost you need to add a % for error and unforeseen circumstances. After all that you will add a comfortable profit margin which should be able to cover the cost of your current and future life style. You need to think of retirement savings etc.

I would say that after it is all said and done. The guy cutting part time after work doing 10 good priced lawns a week will earn more money then you. I'm not trying to be rude. I just think it is impossible to make a living doing low volume cheap cuts.

Think for a minute what you could achieve with 50 lawns at normal rate. You can cut them in 3 days by yourself, you will not have employee overhead. you will need Less equipment etc. etc. etc.

yrdandgardenhandyman
01-05-2005, 07:41 PM
[QUOTE=Soupy]What makes you think that you can operate at such a lower cost then your competitors? Your whole business plan or lack there of is why you will most likely not succeed.


Oh, he'll most likely succeed. As long as he doesn't mind living in a van down by the river and eating tv dinners every night. Maybe it's just beer money. In any case Zoomer will succeed. My living standards, by the way, are a little higher. I have a daughter in college, a house and all that. This is no hobby for me like it is for the lowballers and scrubs.
:angry:

Tn Lawn Man
01-05-2005, 07:51 PM
Zoomer

How many weeks a year do you cut where you live?

Petr51488
01-05-2005, 07:55 PM
However, hidden among the many insults were a lot of good points I had not considered and that have convinced me $15 is probably too low. So, I will scrap my $15 idea and raise it a bit while still maintaining a lower rate than the competition.


So, what, your going to go to 17.00 per house? Take my advice and quit while your still down.

jajwrigh
01-05-2005, 09:47 PM
Why wh0re up the market?? Do some more math and calculate your expenses. You may want to look into what workmans comp, unemployment, insurance, Gas, office work, equip, truck, trailer, etc etc etc cost you. Ah what the hell, at least buy nice stuff so someone can pick it up cheap when you go under.

I like this response...so I agree!!

zoomer
01-05-2005, 10:37 PM
Thanks for offering one of the few helpful responses...

What makes you think that you can operate at such a lower cost then your competitors? Your whole business plan or lack there of is why you will most likely not succeed..

This was just a starting point...I wanted to get a few accounts and then, hopefully, get referrals where I could charge a higher price

What equipment are you planning to purchase? What is the cost for said equipment? What replacement plan do you have set for this equipment? How much have you allocated for advertising?

One thing I know is that I need new, commercial equipment--and set aside a certain amount for replacement. I don't have a budget for advertising yet.

Give us more info, other then "I plan on being the cheapest guy in town". Let us know how much your indirect expenses are and how much you project your direct expenses will be etc.

Since I have been in the construction business for the last 12 years I already have a handle on most of my overhead expenses--which will not be greatly effected by the addition of the lawn servie.

You mentioned that you plan on doing 100 lawns in the 7-9K range and plan on doing this in 3 days with a 3 man crew. Can you tell us more about the layout of these properties (gates etc.)? How many hours total are you allowing for these 3 days?

Most of the yards are in a relatively high income area, but the yards are small--normally about 6,000 sq. ft, with gates, and with pools. The homes are relatively large.

Do you already have employees lined up? If not, are you sure you will be able to find 2 part time workers that will be happy with low pay and few hours? Most hard workers will want full time hours. Usually lazy people look for part time jobs.

I have a access to almost an unlimited supply of inexpensive labor that I have used over the last 12 years as helpers. I get calls almost on a daily basis of someone looking for work.

How do you plan on billing customers? Monthly invoicing will mean that you will not have even cash flow all the time and if a couple of customers stiff you then you have really lost big since you didn't have much of a profit to begin with. If you collect weekly then you might want to add 5 minutes (some will take longer and some will have check ready) to each property. That is 8 hours right there and chances are you will have more wasted time with employees standing around waiting too.

I'm not worried about cash flow since I have other income but I plan to bill exclusively by credit card on a montly basis.

If you can come up with some operation cost. Then maybe we can help you out. Just remember that after you figure your cost you need to add a % for error and unforeseen circumstances. After all that you will add a comfortable profit margin which should be able to cover the cost of your current and future life style. You need to think of retirement savings etc.

I probably didn't explain my situation accurately. I am not destitute, trying a last ditch effort to make money, or without any hope for the future. I have a business that is making money, but I also have the capacity to expand into other areas. The reason I am considering lawn care is that I have done it before on a limited basis and I like the idea of regular customers. If I never make a dime cutting grass it won't effect my lifestyle.

I would say that after it is all said and done. The guy cutting part time after work doing 10 good priced lawns a week will earn more money then you. I'm not trying to be rude. I just think it is impossible to make a living doing low volume cheap cuts.

You may be right--and that is why I was asking the question. Would it make any sense to try to start off with $15 a yard and get some customers instead of going through the agony of putting out 50,000 flyers and getting 3-4 customers?

Think for a minute what you could achieve with 50 lawns at normal rate. You can cut them in 3 days by yourself, you will not have employee overhead. you will need Less equipment etc. etc. etc.

That is an alternative--much fewer lots at a higher price.

Thanks again for some real help...

yrdandgardenhandyman
01-05-2005, 11:19 PM
[QUOTE=zoomer]Thanks for offering one of the few helpful responses...





If I never make a dime cutting grass it won't effect my lifestyle.

Then why screw it up for others by lowballing? If it fails, you are just going to walk away?? This is not important to you? Why do it? At least that way. Why don't you earn your customers like everybody else? Well, except the lowball scrubs.
I will say, if you decide to do this thing in a way that won't damage the whole industry, I wish you the best of luck and may the fruit of your efforts be sweet.
I guess what ticks me off is many of us are trying to be successful and keep our integrity, and there are those with no remorse, will come in, lowball, fail and leave the rest of us to deal with the rubble. Of course, the other side of the coin is that maybe you'll get all the PITA's and the rest of us won't have to deal with them.

TotalCareSolutions
01-05-2005, 11:39 PM
[QUOTE=zoomer]What I was looking for was not put-downs and insults--I can get those at home--

Why...do you think?

zoomer
01-05-2005, 11:45 PM
yrdandgardenhandyman

Then why screw it up for others by lowballing? If it fails, you are just going to walk away?? This is not important to you? Why do it? At least that way. Why don't you earn your customers like everybody else? Well, except the lowball scrubs..

I am not interested in causing trouble for other lawn care professionals however, I am a believer in the "free enterprise" system which means that if I can succeed at a lower price, then "so be it". If I can't, then that will be the end of the story.

My intention is to give the customer a quality job, and quality service, but at a lower price than the competition. I don't want to shortcut the customer, but I don't mind undercutting the inefficient competition.

My original question was really concerning pricing vs. advertising...is it better to offer a lower price than trying to distribute 10,000-50,000 flyers. However, apparently I didn't phrase the question correctly.

Fantasy Lawns
01-05-2005, 11:52 PM
$1500 per week .. with 3 guys @40 hrs. each comes to $12.50 per hr of "gross income"

I may not be reading this correct but if you have 2 helpers .... let's say at full time that is 80 hrs per week ...n @ $8 per hr ... that is $640 true or $860 "gross" per week .... fore those week of cutting ....not to include those weeks of the year when your not cutting .... but either way you haven't even paid fore your indirect or overhead cost

Stephen M.
01-06-2005, 01:22 AM
...
For the large number of people who are afraid of “lowballers” I suggest you take a course in basic economics. In our society “price” is (mainly) determined by the market, not by you nor by me. You might also want to look at it the other way—if I am charging $15 and you are charging the $30 for the same service, why aren’t you considered a “price gouging scumbag”?
...

The marketplace doesn't necessarily set my price; if that were true, I'd still be working for $10-$20/hour. The going rate for a solo "gardener" is $10-$15/hour and they rarely run power equipment. Most other business charge around $15- $20/hr but have trouble maintaining their equipment.

I'm charging more than that, and depending what I'm doing, I can get it. I refuse to let the market dictate my pricing. If you compete on price and lower your price to get the job, you will always be working for crap wages. I didn't become "my own boss" to work a business collecting minimun wage.

I chose to compete on quality of work and service, i.e., dependability. My work standards are high; We are dependable, and we give value for the buck. People are willing to spend money when they understand that you work hard to give these. This also works in reverse, since there are those who will agree to the price and then try to flake out and try to get out of what they agreed to. In those cases, we are in small claims court AND I ALWAYS WIN.

Somebody said that there was a recession going on since 9/11, and that the economy was lousy last year! If that was the case, I didn't get the memo since I made very good money. But if I did business using your "plan", I'd be in recession and out of business. That my boy IS letting the market place dictate my pricing.

zoomer
01-06-2005, 01:38 AM
[QUOTE=Stephen M.]The marketplace doesn't necessarily set my price; if that were true, I'd still be working for $10-$20/hour. QUOTE]

You are correct--to a certain extent. There are different demand curves for different levels of service. However, the market will always determine the price for your particular level of service.

What this all means is that there are some people who just want someone to cut the grass and will pay the lowest price. Also, there are some people who want a higher class of service and are willing to pay more. (Different demand curves).

The bottom line is that if you are a true professional you shouldn't worry about the competition attempting to charge the lowest rate since you are offering a different service which should demand a higher price.

Soupy
01-06-2005, 01:57 AM
yrdandgardenhandyman



I am not interested in causing trouble for other lawn care professionals however, I am a believer in the "free enterprise" system which means that if I can succeed at a lower price, then "so be it". If I can't, then that will be the end of the story.

My intention is to give the customer a quality job, and quality service, but at a lower price than the competition. I don't want to shortcut the customer, but I don't mind undercutting the inefficient competition.

My original question was really concerning pricing vs. advertising...is it better to offer a lower price than trying to distribute 10,000-50,000 flyers. However, apparently I didn't phrase the question correctly.

I just think it is odd that every new guy thinks they can offer a cheaper service. Why not go in and charge accordingly to market value (most likely your market value has already been lowered and is struggling at the current rate) and see how things go. If you are making a ton of money and want to change directions and offer a cheaper service by quantity then that is fine. At least you will be making decisions based on knowledge.

Now let me explain something. I do not pay more for my equipment and I don't pay more for my insurance etc. then you do. I shop smart and don't waste money on expensive trucks etc.

I charge $30-$35 for 7-9K. I am not getting rich! It is hard to make it through the winter sometimes. I live a simple life and my wife works. She gets free medical for the whole family because she works for a insurance company. This saves a lot that some guys have to pay close to a grand a month for. So my expenses are not any higher then the average guy.

Now, tell me how all the new guys think they can come in and work at half my price and get rich. I mean, why ain't I rich. If it is that easy we should all be rolling around in piles of money. I made more gross then you are planning, but after all the expenses I'm not left with much. What gives? Please fill me in on the secret?

Lets say I did what you are planning. Lets say I lower my price to $17.50 and pickup twice the work. Did I make anymore money? Did I make the same? No, I increased my cost (and you are saying you are going to operate cheaper) which decreased my profit. How are you going to operate cheaper cutting twice the lawns?

All you new guys with this same mentality should take the advice from us guys that have been in this business for awhile. I don't know why you all want to argue.

Stephen M.
01-06-2005, 02:17 AM
[QUOTE=Stephen M.]The marketplace doesn't necessarily set my price; if that were true, I'd still be working for $10-$20/hour. QUOTE]

You are correct--to a certain extent. There are different demand curves for different levels of service. However, the market will always determine the price for your particular level of service.

What this all means is that there are some people who just want someone to cut the grass and will pay the lowest price. Also, there are some people who want a higher class of service and are willing to pay more. (Different demand curves).

The bottom line is that if you are a true professional you shouldn't worry about the competition attempting to charge the lowest rate since you are offering a different service which should demand a higher price.

Again, Yes and No; True and False:

I conceed on the different demand levels, but I disagree with the "Wal-mart" mentality when it comes to competing on low, lower, and lowest pricing. The "Walmart" mentality looks at everything as being negotiable, including your time, wages, and expense/overhead. Profit is always optional.

Alot of people, including yourself, make the mistake that you can make money grow out of lawns based upon volume. That's false because it depends what your time is worth and how many lawns you can actually mow in an hour based upon what type of equipment you are using. Even if you are using a bigger machine than the standard 21", it also costs more to operate. Besides, what the plan looks like on paper is always better than what might happen in the field, especially when employees do the work. I may bid work and know that I can get xyz lawn done in 1.5 hrs, but it may take the employee 2hrs to complete. Whoops, there goes the bottomline. I've had at least 6 of those miscalculations last year. Fortunately for me, other higher priced work cut the pain of screwing up.

There was a guy in my area who ran under "Denney's Mow for Less". He was in business for 4 years and paid his 3 employees $8/hr under the table. He was busy all the time and had a booming "business". But he lost customers when his 21" mowers broke down. Why? He couldn't afford back up mowers; he could barely fix his equipment; and his "employees" made more money than he did. But hell, he had the best prices in the county!

Around here, many of the solo operators lose customers when their mower goes to the shop. They complain that they can't afford another mower or can't rent the equipment to get the job done for their customers. I GET their customers at the HIGHER price and keep them because I have my people there on the same day every mowing period. I don't guarantee the time of day, but I guarntee the day.

zoomer
01-06-2005, 02:48 AM
Again, Yes and No; True and False:

I conceed on the different demand levels, but I disagree with the "Wal-mart" mentality when it comes to competing on low, lower, and lowest pricing. The "Walmart" mentality looks at everything as being negotiable, including your time, wages, and expense/overhead. Profit is always optional.

Thanks for the "non-insulting" input--I will think about what your said.

zoomer

PMLAWN
01-06-2005, 03:34 AM
Zoomer-- You say that you don't care about the other LOC's and I believe that is OK, Business is what it is. Each has a right to feel any way they want.
But you also say that you care about the customer and you don't want to hurt them. You want to do a good service for them. You also say that if it does not work out, So what? No skin off my back. Someone else said that we would be around to pick up the pieces.
The problem comes from the fact that you have been in the market and lowered the going rate and now the man trying to run a true business can no longer make it so he goes under. You have hurt the other LOC but you don't care. But he will no longer be around to service all his customers that wanted proper service by a true, knowledgeable, professional. Now the customer can no longer get what he wanted.
Look at the Walmart, No more Mom and Pop places that cared for the customer, No more customer service. No more getting the thing you bought fixed. Everybody is aware that most manufacturers make a dummied down or lesser quality product to sell at the big box store.
In the end the customer does lose. In the end you hurt the customer.
I said farther up that you have a choice to be part of a growing, prosperous economy or a dieing one. I think that you also need to know that you will be part of whatever you help create.
Please do not think short term. Have a long range business plan and a long range life plan.
You started this thread with a question and people gave you an answer.
Be open minded and learn and prosper rather than bull headed and hungry.

tstrong
01-06-2005, 09:07 AM
Zoomer,Lawnsite members Justmowit have an excellent Low cost/High volume business plan that is operating in the DFW area which is very similar to Houston. If you read everything they have ever written here, then you will know EXACTLY how to run a sucessful business with the concept you have in mind.

Soupy
01-06-2005, 09:37 AM
Zoomer,Lawnsite members Justmowit have an excellent Low cost/High volume business plan that is operating in the DFW area which is very similar to Houston. If you read everything they have ever written here, then you will know EXACTLY how to run a sucessful business with the concept you have in mind.

Big difference. Justmowit is cutting thousands of lawns. Plus I doubt it is low cost. He makes very little off each lawn but makes it up in volume. It takes a lot of money to get something like that going. Justmowit is smart but his plan is bad for the industry. I can already see how everyone wants to lower prices and try to copy his plan. This is going to cause problems for him and the market. It smells like WalMart, and we all know that WalMart is bad for business. Sure the WalMart family got rich, but look what happen on the way. Don't forget that a big reason he has success is the fact that he outsources his labor. You all know what that does to our economy. It is a double loss if you ask me.

I'm not slamming Justmowit, it works for him. He is entitled to get rich anyway he sees fit. But as the market comes crashing down he will regret sharing info on lawnsite.

Tn Lawn Man
01-06-2005, 10:04 AM
Zoomer-- I think that you also need to know that you will be part of whatever you help create.


Amen!!!! Exactly!!!

PMLAWN
01-06-2005, 10:47 AM
If you go on to Justmowit's web site you will find that he starts pricing at $26.00 which is a lot more than 15. The other part of Just Mow It is that they only do mowing and a little trimming which gives them a low overhead.
I believe this is much more doable at $25+ per lawn than $15.00.

Ground Master
01-06-2005, 11:24 AM
great idea zoomer!

please keep everyone informed on your progress...........

scaglawnsnj
01-06-2005, 12:11 PM
[don't under bid just to get work..i would never cut a lawn for under 30.00
the problem with your 15 to 100 is that is a educated guess..your not getting 100 in a year..thats imposable.. i charge 30 for even small lawns. 35 for med
45 for large that makes a profitable day..for 15.00 i would take a **** on there door step a leave

JustMowIt
01-06-2005, 02:56 PM
I'm reactivating my lawn service in a couple of months and am considering the following:

Most of the companies in my area charge around $20-$30 a week to mow a 6,000-9,000 sq. ft. yard. What I am thinking about is offering to do the same yard for $15.00 a week. If I can get, say 100 yards a week @ $15 each, that will be $1500 gross income.

Labor cost for me is $8 an hour and we can manage 100 yards in 3 days with 2 men, plus myself. IOW, it would cost me about $400 labor. That leaves $500 a day, less overhead, for me.

I’m I missing something?

Take a look at www.justlawns.com, he is in Houston. He mows around 1,500 lawns, spoke with him a year ago & he has done very well @ $18 rate. His concept is almost identical to ours, but I think he can charge less because labor is much cheaper in the Houston area than Dallas & more readily available.

TJ

scaglawnsnj
01-06-2005, 03:53 PM
what the blank you could tell she pockets all the money

Bushwhacked
01-06-2005, 06:15 PM
Keep in mind where he's located, Texas is a whole other country. Cheap seasonal labor force is a way of life. I know of a contractor that has this kind of setup. They arrive in Spring and go home in the fall. He pays in cash and picks them up by the truckload (7-days a week when he's really busy),no EE taxes, no Work Comp. Up here customers know you get what you pay for, who's gonna deal with a pita when she's only paying you $15 bucks anyway.
I can't believe you would put in as much effort if you're only makin' $15....you're gonna fly thru there with a "that's good enough" attitude because you're gonna be hustlin to get to the next 30+ properties. :rolleyes:

Doster's L & L
01-06-2005, 06:41 PM
It sounds to me that zoomer wants to pick up the cheep customers that arent really looking for all of the "nicities", but would rather "just get by". Of course we all know, these folks are pitas (hard to collect from, want all "extras" for free, want you to pick up dog turds at no cost, etc.), for the most part. Personally, i dont want to go to someones home to give them a price if all they want is to have their grass cut. I want to do ALL of their lawn and landscape maintenance. So for those of us in this same kind of market, zoomer will have no bearing on us. Besides, this type of customer already knows that what you pay for is what you're gonna get.

Zoomer, if i were you, id raise the price up a good bit closer to normal prices or else you're nailing your own coffin closed. This in itself will keep you from getting the PITA customers that i mentioned above. Your Walmart technique sounds good to you i'm sure, but you have to have ALOT of money backing you up should something turn out really bad. Advertising in your kind of market is essential for any kind of growth. Another piece of advice, make yourself look as professional as possible in your doorhangers or whichever method you use. The main thing is.... have a PROFESSIONAL IMAGE! ALWAYS!! This will get word out more as your business as well as your confidence grows.

K c m
01-06-2005, 06:59 PM
Those guys don't even know your around your like a bug on a windshield you hardly notice it and its gone soon enough
Mac

Mac im not worried what other people think about me. I am here to take their business plain and simple nothing personal. I run 2 xmarks, drive a olds 91 bravada and a 12 foot trailor. and pay a 30,000 a yr bill for school. obviously im doing something right :cool2:

Metro Lawn
01-06-2005, 07:05 PM
Wow, I can't believe I didn't get any response from my earlier post.

Anyway, I am glad I am not in Houston... But, we have plenty of "zoomers" here aswell. Now, I see why we have to charge less for services now than we did in 1990. Everything else has gone up except the rates... why?? because of "dildos" like this... I'm done with this subject.

Thank God our real money is made doing snow. The big players (companies that don't award contracts based on lowest price, but on service standards) won't deal with scrubs like this.

dwc
01-06-2005, 07:32 PM
The idea of "starting out at $15 and increasing later" will not work. People are either gonna know Zoomer Lawn Buzzing as yeah he has excellent service and his prices are decent or man call that Zoomer guy, he will do it dirt cheap but don't expect much.
If you happen to be known as the $15 dollar man, and you have Mrs. Smith tell Mrs. Jones that lives next door to each other that she is getting her's buzzed down for $15 and she calls and you say oh yours will be $25, then you probably are gonna have a hard time explaining to Mrs. Jones as to why you are "ripping her off".

If all I could charge was $15 for a 7K lawn, I would not bother to get out of bed in the morning. I could make more than that at McD's serving $.89 burgers and asking if they would like fries with that.

If I were new to the biz and I had 10 pages of replies that pretty well agree that you are "nuts", I would sure do a checkup on my biz plan!

And just a thought......have you ever seen a new electrician start a business and hang out fliers that say "my rates are half of the competition?" More than likely not if they are still in business. There was a guy here in my town a couple years back that had your mentality. He ran ads in the paper ANY lawn $20 or less. Everytime we would see him out, he just waaaaved and smiled. Needless to say he is no longer in the business.

Metro Lawn
01-06-2005, 07:50 PM
And just a thought......have you ever seen a new electrician start a business and hang out fliers that say "my rates are half of the competition?" More than likely not if they are still in business. There was a guy here in my town a couple years back that had your mentality. He ran ads in the paper ANY lawn $20 or less. Everytime we would see him out, he just waaaaved and smiled. Needless to say he is no longer in the business.

Basically the same thing I said in my first post. I don't even bother price shopping these kinds of services. Plumbers, electricians, and the like are ALL around the same rate. You only base your decision on service. Gee, what a concept....

yrdandgardenhandyman
01-06-2005, 09:16 PM
Sorry about all these long story posts but, a couple of years ago, when I was just starting out, I worked in a factory and was doing the lawn and landscape thing on the side. I always charged a fair price to the customer but more importantly I charged a fair price for myself. At the same time, a mid 20ish kid started his. He advertised, "any lawn 7 bucks". No kidding. 7 bucks. He had inherited some money and was going to invest it in the business, and lowball the rest of us "chumps" out. He figured, he said, he'd raise his prices when the rest of us were gone. Used to brag to me about it. Well, he did get a bunch of lawns and did a pretty good job. Didn't make any money though. Last year he decided to start spraying. Charged $1.00 per gallon of mixed chemical. He bought a tank sprayer for the back of his Walker and went at it. Unfortunately he forgot to get a pesticide license. The fine, and the cost of replacing a couple of lawns because of wrong mix, broke him. I don't think he ever made any money, even before he got busted but, and as was said here before, he didn't even make a blip on the radar screen and actually helped the prices around here. A lot of people found out, you buy cheap, you get cheap. I have 2 of his ex customers and they pay me $35.00 a cut.
Ironically, his nickname, even before the business venture, was Radar. And he still works in the factory and I'm not. :p

Soupy
01-06-2005, 09:35 PM
Sorry about all these long story posts but, a couple of years ago, when I was just starting out, I worked in a factory and was doing the lawn and landscape thing on the side. I always charged a fair price to the customer but more importantly I charged a fair price for myself. At the same time, a mid 20ish kid started his. He advertised, "any lawn 7 bucks". No kidding. 7 bucks. He had inherited some money and was going to invest it in the business, and lowball the rest of us "chumps" out. He figured, he said, he'd raise his prices when the rest of us were gone. Used to brag to me about it. Well, he did get a bunch of lawns and did a pretty good job. Didn't make any money though. Last year he decided to start spraying. Charged $1.00 per gallon of mixed chemical. He bought a tank sprayer for the back of his Walker and went at it. Unfortunately he forgot to get a pesticide license. The fine, and the cost of replacing a couple of lawns because of wrong mix, broke him. I don't think he ever made any money, even before he got busted but, and as was said here before, he didn't even make a blip on the radar screen and actually helped the prices around here. A lot of people found out, you buy cheap, you get cheap. I have 2 of his ex customers and they pay me $35.00 a cut.
Ironically, his nickname, even before the business venture, was Radar. And he still works in the factory and I'm not. :p

Do you think that maybe if he never tried his crazy scheme that you might have picked up more then 2 of his customers.? How do you know just how much it effected your business? Sounds like he was snagging up customers pretty good. How many of them might have went with you or someone else in the first place? How many years could you have been collecting revanue on those two customers?

Like I mentioned in another post. I'm sure the specialty stores thought that discount stores would not effect them much either.

You can not tell me that our industry has not suffered because of these people.

I know we can't stop this problem. But we can change a few minds here and there.

Fareway Lawncare
01-06-2005, 10:47 PM
I didn't read all the Other Posts but It's a Good Plan.

Low Prices Give you Density, Security & Lots of Word of Mouth.

I Could Care Less about the Other Guy...My Goal is to Put the other Guy Out of Business.

I blanket Subdivisions w/$15-$20 Pricing & Knock 3 or 4 other Operators out of the Area who were charging more..Soon We're doing the Whole Subdivision...No Drive Time...Huge Mowing Hrly...Higher hrly than the Guys who were charging $30 a cut....& More Crews.

What does that Tell You ?

Soupy
01-06-2005, 11:48 PM
I didn't read all the Other Posts but It's a Good Plan.

Low Prices Give you Density, Security & Lots of Word of Mouth.

I Could Care Less about the Other Guy...My Goal is to Put the other Guy Out of Business.

I blanket Subdivisions w/$15-$20 Pricing & Knock 3 or 4 other Operators out of the Area who were charging more..Soon We're doing the Whole Subdivision...No Drive Time...Huge Mowing Hrly...Higher hrly than the Guys who were charging $30 a cut....& More Crews.

What does that Tell You ?

What is $15-$20 canadian worth in U.S dollars?

YardPro
01-07-2005, 09:13 AM
What I was looking for was not put-downs and insults--I can get those at home--but input about a pricing plan to re-activate my lawn care business. Unfortunately, that apparently was too much to ask from many of the self-proclaimed “professionals” who post on this board.

However, hidden among the many insults were a lot of good points I had not considered and that have convinced me $15 is probably too low. So, I will scrap my $15 idea and raise it a bit while still maintaining a lower rate than the competition.

For the large number of people who are afraid of “lowballers” I suggest you take a course in basic economics. In our society “price” is (mainly) determined by the market, not by you nor by me. You might also want to look at it the other way—if I am charging $15 and you are charging the $30 for the same service, why aren’t you considered a “price gouging scumbag”?

Terms such as “lowballer” and “price gouger” have no relevant meaning, the only thing that matters is if someone can run a profitable business at the price he is charging.


reactivate your mowing business?
so you've failed at this before, then failed at roofing, now are mad becuase people are getting pissed that you want start mowing again and are planning to cut thier throats by 50%.

you cannot start and grow a business underpricing by 50%

how would you feel if a roofer was taking your business away by charging 1/2 of what you do?

you really should take business classes and learn what profit really is, and how to generate it.

YardPro
01-07-2005, 09:33 AM
zoomer

i do not see in your equation any allowance for equipment and vehicles ( a truck costs YOU $.35/mile to operate) repairs, depreciation, fuel, insurance, non billable time (billing and travel etc.). These are the factors that will kill your profit. You WILL not be profiable with the figures you're using.

If you have been a contractor for 12 years and have not figured these BASIC business principals out, then this is probably the reason for you lack of success in your past two business ventures.

you say you'll start ultra cheap then get referrals.

I guarantee this is how it will work.

the customer tells thier friends about this unbelievable price they are getting from thier lawn guy. when thier firend calls you andyou up your price for the new work ( as you have stated you will do). they will argue that you are doing mr X's house for $15.00. They are only calling you cuase you are cheap. you will soon get the reputation of being the cheap guy. you will be unable to raise your prices becuase the clients that will be calling will be expecting ultra cheap prices.

you keep mentioning that we are in a free market. and use wal mart as an example.

wal mart does not undercut by 50%. more like 10-20%
and the free market lets individuals to fail with thier businesses every day.

GrassInspector
01-11-2005, 06:35 PM
I say go for it Zoomer. However, if you do not add customers, then you will probably shrivel up on the vine and die as a business. High volume means just that. You have to have a lot of customers at $15.

If you go out and buy a new F-250, new trailer, new ZTR and all the other stuff like so many of these LCO's do, then you will die off shortly.

My partners and I have started, built and sold several service companies. Some were high volume/low price and others were/are low volume/high price. Lawn care is not different than any other service business if you're just looking at the business side of things. It's just cutting grass, it's not brain surgery. Keep your overhead down or next to nothing, do a quality job and do a lot of them.

I always get a kick out of the guys who say "Wal-Mart is bad...." It's usually those who were run out of business by Wal-Mart that say this. What they fail to tell you is that when Wal-Mart came to town they were so set in their ways they could not change and compete with Wally World.

"Can't sell a shirt for under $20 bucks! Wal-Mart won't last" Many of those same people now work for Wal-Mart or the people who changed and now compete with Wally World. Some of the most successful people in Wal-Mart towns are those who changed the way they did business and learned to adapt and thrive. Those who didn't faded away crying about how Wal-Mart run them out of business.

I think I read someplace that Wal-Mart was one of, if not THE, largest employer in the world. There are far more people Wal-Mart has helped than hurt.

Spending some quality time reading business journals and market reports will give you a littel insight into these high volume, low price retailers. The funny thing is, you'll see many of these same moaners and complainers at Wal-Mart, Best Buy, Sam's and other high volume/low price stores buying their TV's and grocerys.

bobbygedd
01-11-2005, 06:44 PM
"there are far more people walmart has helped than hurt." CORRECT, but these are people who were never meant to be anything but a $7 an hour employee. with, or without walmart, these people have reached thier platue as a $7 an hour employee. what places like walmart do, is destroy not only small businesses current, but also THE FUTURE of small businesses, and creates a city with $7 an hour employees.

dwc
01-11-2005, 08:31 PM
You took the words out of my mouth Bobby!
I think that is where this thinking comes in of $15. They are so used to their $7 an hour job that $15 looks awful good to them.

Soupy
01-11-2005, 09:16 PM
I found this in the basement.
[B]The voters in Inglewood, California defeated a Wal-Mart initiative by an overwhelming vote of 60 to 40 percent. But experts who follow Wal-Mart see this as only the beginning. The Arkansas-based mega-store wants to wipe out all retail and grocery competition. The goal, whether stated or not, is to become a Soviet-style retail monopoly.

Wal-Mart is bad, bad, bad for america!!!!! Wal-Mart might be the biggest employer, but how many jobs did they wipe out first? How many of those jobs are overseas? What ever happened to Wal-Mart's claim to only sell made in America products?

Bestsmurf
01-11-2005, 09:53 PM
Good Luck,

Are your guys going to want more than $8 per hour with you making all that money? They may not come out and ask you..... They might call in sick, break your mower, crash your truck, wreck a lawn, get hurt, etc.

Meantime....... Your customer is going to expect the same quality they got when they were paying $30.00.

100 accounts Wow! Works on paper, why stop at 100, why not 30 guys and 1000 yards and you make $5k per week?

I would start with ten lawns at a fair price and see how it goes.
"If it were easy, everyone would do it."

tiedeman
01-11-2005, 10:18 PM
have to agree, I watched a special about Wal Mart on Tv and I thought that basically Wal Mart was this big gaint, that if companies wanted a product to be on a Wal Mart shelf that had to go rock bottom with their costs in order to survive. Many of the business that did would go out of business or had to outsource in order to keep within the costs. It was a very eye opening show to watch just to see how bad Wal Mart is to the economy.

yrdandgardenhandyman
01-11-2005, 10:43 PM
Offtopic

WalMart is NOT the company :nono:Sam Walton envisioned or started. Read his book.