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Old 01-07-2000, 07:28 AM
Millertime34 Millertime34 is offline
LawnSite Member
Join Date: Jan 2000
Posts: 38
I think the bottom line of everybody's pricing is &quot;by the hour.&quot; Whether you price by the job, by the hour, by the square foot, or whatever method you price by, it all leads back to how much money you made per man hour worked. This amount has to be enough to cover all expenses and leave a profit margin. How much you charge per hour is determined by the competition level in your area and how much they charge and it also has to do with how efficient your company is. You need to match your equipment with the job. If you can mow 45000 sq.ft/hr and I can mow 135,000 sq. ft/hr, I will be more efficient and make more money per hour. example: We both bid on a job that has no trees and is 135,000 sq. feet. I bid $35 and make $35/hr. You bid $35 and make $11.67/hr. This amount won't even come close to my expenses per hour and I don't think it will cover anybody's expenses. I charge differently for each piece of equipment because each piece of equipment has different production rates. The trick is matching up the right equipment for the job so you can give a competitive bid and also make money. In my area, northern Minnesota the most the market will allow is about $35-$40 per hour for a 60&quot; Lazer. This is the most efficient piece of equipment that I own. Next I will provide an example of how I figure expenses for this machine and how I guarantee that I make a profit. First, I figure the machine has 2000 hours in it and I determine that it has no salvage value. I believe this to be conservative but it is my personal preference. The machine costs $8000 to replace so I have an equipment cost of $4/hr. It sucks down 1 gallon of gas/hr at $1. Labor = $10/hr. Payroll taxes = $3/hr. I continue this way through all of the expenses and divide each amount into 2000 machine hours. For this machinemy expenses are roughly $25. Any thing over this amount and I know that I will make a profit. I do this for each machine. After you know the expense of each machine you need to find its production rate per hour so you can give a competitive bid. This might seem tedious but once you know this stuff, giving a bid is easy and it eliminates all of the guesswork involved. I hope this helps. Sorry for rambling so long. <p>Bryan..Heartland Lawn Care<br><p>----------<br>Bryan..Heartland Lawn Care<br>
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