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  #11  
Old 03-11-2011, 09:47 AM
Johnny Ringo Johnny Ringo is offline
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Location: Roane County, TN
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Quote:
Originally Posted by NicholasMWhite View Post
This is the problem with this industry. Guys come in with no knowledge of what it costs to be in this business. They start thinking "I'm making $25 an hour I'm doing awesome, I used to only make $12 an hour" they lower the prices for the whole industry and everyone loses.
I agree that this is how some people think. I did an estimate for a guy the other day for his lawn maintenance. After I gave him my written quote he told me that his last year guy has half my price (Mind you that the "last year guy" was using the homeowners equipment). After a few minutes of talking with him he told me that his guy would get paid for the work done and ask for next weeks pay in advance also. Then he said that the guy stopped mowing for him and started sending his nephew. He ended the conversation by telling me that the guy stole his blower and after all that he was considering hiring him again. I reminded him about my written estimate and that if in the future he needed my service not to hesitate to call. These people you speak of tend to work themselves out. The problem is that there is another one right behind him.
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  #12  
Old 03-11-2011, 11:33 AM
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CLS LLC CLS LLC is offline
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Quote:
Originally Posted by Roger View Post
Nickolas, I respect your position, but stand on "too many variables" in determining costs.

When anybody starts, there is little understanding of maintenance costs. How long will a machine last? When I bought my Exmark w/b in 1995, I never believed it would be running well in 2011, ready for another season. I didn't know how long hydro pumps would last, the cost of replacement, etc. Also, I did not know how many miles to drive for a season. I didn't know the whereabouts of my customers, hence I didn't know how many miles to drive. In the early years, I was thrilled with five jobs per day. Now, I'm disappointed with seven. Advertising, ....? Who knows what will be needed? I spent $18 the first year, no other direct costs in the past 15 years. I am doubting many starting out can make a good estimate on what expenses will be associated with advertising.

Yes when they start they don't know any of that information. But those are the questions these people should be asking, instead of "what should I charge." Of course you're not going to know the exact location of each customer, but you can select a service area and there for determine the approximate number of miles you'll be driving for each account. That's the problem no one does there research.

Much is said about "cost of doing business" in these kinds of threads. In reality, there is much more discussion in more threads about "what the market will bear," "what others are charging," and "why won't people pay more for my services." In these discussions, "cost of doing business" has little to do with pricing. The "cost ...." has much to do with longevity and profitability, however. The 500# gorilla sits in the corner at all times.

This statement again just shows the problem with the industry. You can't base your business on "what the market will bear." I agree that you do need to determine what the market will bear, but you shouldn't determine the price of your services based on that. You should determine what you need to charge and then find out if it is higher or lower than what the market will bear. If it's higher, find a way to cut costs or find another business to start. If it is lower than charge it and you'll be happy with what you're making and you'll accumulate more customers because you're charging less than other companies.

The turnover in this industry is so fast that most never reach a point of understanding their business, their plan, or a realization of something of longevity. For most, the tasks to be done are the menial ones of grass cutting, trimming, mulching, etc. There is nothing unique about these tasks, nearly everybody can do them. Any business built on these asks is vulnerable, highly subject to pricing pressures. There is no shortage of posts on LS, "... I have been in business for five years .... I need a program to make invoices ...." When asked, rarely does somebody offer how they have been managing their finances for the previous five years. The answer is undoubtedly, "not." In these cases, nothing is being done to build a base of information to understand "cost of doing business," even though they have all the information to understand a basic concept of financial management. Strong, straight stripes, having a diesel powered mower, ... all more important than managing finances.

Here you're describing the perfect employee and the last person who should RUN a business. The thing is if it took you 5 years and you still have no clue what your cost of doing business is you really need to get out of the business. The reason the turnover is so high is in direct correlation to the lack of research being done before starting a business.

On the other hand, tasks of wall building, landscape design, plant selection, and install, and the like, are more specialized and not everybody can do this work. Pricing is much more leveraged because of the unique nature of the services being offered.

These principles are not unique to this industry.

I completely agree these principles aren't unique to this industry, and ALL basic principles of business say that you should do research before entering in a business venture.
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  #13  
Old 03-11-2011, 11:35 AM
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CLS LLC CLS LLC is offline
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Quote:
Originally Posted by Johnny Ringo View Post
I agree that this is how some people think. I did an estimate for a guy the other day for his lawn maintenance. After I gave him my written quote he told me that his last year guy has half my price (Mind you that the "last year guy" was using the homeowners equipment). After a few minutes of talking with him he told me that his guy would get paid for the work done and ask for next weeks pay in advance also. Then he said that the guy stopped mowing for him and started sending his nephew. He ended the conversation by telling me that the guy stole his blower and after all that he was considering hiring him again. I reminded him about my written estimate and that if in the future he needed my service not to hesitate to call. These people you speak of tend to work themselves out. The problem is that there is another one right behind him.
This is exactly why you can't just "charge what the market will bear." If you did that you'd quickly go broke trying to complete with Joe Push Mower.
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  #14  
Old 03-15-2011, 04:33 PM
New2TheGreenIndustry New2TheGreenIndustry is offline
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marked for later
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  #15  
Old 02-21-2014, 11:04 AM
A. W. Landscapers, Inc.'s Avatar
A. W. Landscapers, Inc. A. W. Landscapers, Inc. is offline
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I have an app for this too…it's called arithmetic.

It works by charging a price for each minute you work.

Here is where it gets really complicated...

If I estimate the job will take 45 minutes or less, the price is $45.

If I estimate the job will take 50 minutes, the price is $50.

If I estimate the job will take 55 minutes, the price is $55.

If I estimate the job will take 60 minutes, the price is $60...
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A. W. Landscapers, Inc.
www.awlandscapers.com

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Equipment & Work thread: http://www.lawnsite.com/showthread.php?t=415830
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  #16  
Old 02-21-2014, 11:14 AM
the3ps the3ps is offline
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Quote:
Originally Posted by Roger View Post
This is a "chicken/egg" situation. I've read many responses like this, "What is your cost of doing business?" I think one needs to have two or three years of experience to get a good handle on the "cost of doing business." There are too many variables, too many unknowns, without any data.

Nobody would get started if we suggested they didn't extend themselves at the onset. Yes, pair up with somebody else, but how likely will somebody share all the information to make a decision to leave and get out on their own. This might happen if somebody is leaving the business, and wants to groom another to take over.
nice post....
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  #17  
Old 02-21-2014, 11:15 AM
Roger Roger is offline
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A.W. ... don't hold back. Tell us how it really works.
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  #18  
Old 02-21-2014, 11:49 AM
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jrs.landscaping jrs.landscaping is online now
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AW, where can I find this app?

Is it on android.
Posted via Mobile Device
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  #19  
Old 02-21-2014, 12:31 PM
marc228 marc228 is offline
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Join Date: Feb 2014
Posts: 11
I guess the way I price a lawn may be considered lazy, non calculated, simple ect. It works for me and this is my 9th season in business. All I do is mow, trim, edge, and blow. Anything else i sub out to one of three other companiies. Im sure every area in the US is different but it works great down here. I only work in the 17 largest neighborhoods in my area closest to my residence. I only do residential. These neighborhoods consist of 150-400 homes each. At the beginning of every season I take my flyer that has two large blank spots at the bottom and go door to door. Above these two blank spots it has "your lawn already priced". I write two prices with a red sharpie in these blank spots. A price for a 10 day cut and a price for every other week price. They are 5 dollars different. My minimum is 40. I never have and never will go back and give an estimate. The customer knows the price and what it includes from the flyer. These are cookie cut neighborhoods with sidewalks. At most 1/4 to 1/3 acre. I pre determine if the neighborhood is a 40/45, 45/50, 50/55 ect neighborhood.I knock every door, hand the customer the flyer, introduce myself, tell them what I do, tell them that the price and number is on the flyer and if they are interested please give me a call. It is the simplest, yet most affective way I know how to do it. But hey I just cut grass for a living.
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  #20  
Old 02-21-2014, 12:36 PM
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JFGLN JFGLN is offline
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Join Date: Mar 2004
Location: Olympia, Washington
Posts: 661
Quote:
Originally Posted by A. W. Landscapers, Inc. View Post
I have an app for this too…it's called arithmetic.

It works by charging a price for each minute you work.

Here is where it gets really complicated...

If I estimate the job will take 45 minutes or less, the price is $45.

If I estimate the job will take 50 minutes, the price is $50.

If I estimate the job will take 55 minutes, the price is $55.

If I estimate the job will take 60 minutes, the price is $60...
I think an app would be kind of handy for mowing quotes. Get a bit more precise then just eyeballing it. If it was available for iPad I would give it a try.
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