Originally Posted by Roger
A.W. ... in principle I agree with you. However, we must remember the basis on which services are supplied.
For the kinds of work involved here, the large part of the costs is pure manual and menial labor. Carrying the leaf blower, gathering leaves to a pile, or loading a tarp to drag to the woods, or likewise, does not take much skill. However, other services, such as the lawyer example used, are much different. Or, take the case of a qualified medical doctor. In these cases, the labor component isn't worth much, but the skill level, knowledge, and experience, are worth lots. In the marketplace, we bring a certain value to the table, whether it be knowing how to start the leaf blower, whether it be understanding complex laws, or how to do heart surgery.
I think our customer base understands these distinctions quite well. In my case, many (most?) customers are very capable people, personally bringing lots of value to the marketplace for their skill, knowledge, and experience. In their word-a-day world, they have come to understand the marketplace outside their own domain, one that extends to the person/business that offers lawn services.
For those who aren't active in the marketplace, such as widows that have managed their own affairs for many years, have other reference points (e.g. window washers, painters). But, they also understand what they are buying, and know if the charges for lawn services are out of line.
I know I've shared this story in the past, but it makes a point. An expert was called to a manufacturing plant having great difficulty getting a machine to work properly (details are unimportant). He came, spent five minutes to make a fix to get it working properly, and left. He sent a simple invoice for $10,000 for his services. The company objected, "That is ridiculous, you were here only five minutes." He reissued the invoice with a breakdown, "Services, $5.00, Knowing what to do, $9.995.00, total $10,000." True story, or not, it makes the point that he brought more than just himself to the task. He brought skill, knowledge, and experience, for which he deserved compensation.
I received a call this Summer from a long-time widow. She wanted to get started with me in August, so that I would be ready to do leaf work in the Fall. Last year, "my guy" charged her $1,200 for leaf work. She knew it was way out of line, but was satisfied with the mowing work and costs. I chose to refer the job to another LCO because I was fully scheduled. I suspect the true cost for doing the leaf work was more like $200, or $300, tops. And, she made reference to other residential services, and the time he was on site, for knowing the $1,200 was out of line.
Just because you think this industry (as you've said hundreds of times on this site) is "mere grass cutting, leaf blowing, throwing mulch, etc.", does building retaining/boulder walls, installing permeable paver patios or waterfalls count as something mere to you?!
Anyway, that does not mean we charge next to nothing because the work isn't very "mind taxing". We still have thousands upon thousands (some companies within the millions) in equipment that is operating and depreciating and besides having to be replaced at some point, needs to make a profit to meet direct & overhead costs PLUS turn a profit and therefore needs to be charged accordingly to be used on a client's property.
Originally Posted by GMLC
Everything we do is charged by the job not by the hour. I have never given a customer an hourly rate. Each job is worth so much. If we are more efficient good for us. If we are not shame on us. We use big leaf loaders and haul all the leaves away and are very efficient at clean ups. Leaves get over a foot deep here and jobs range from $300 to over $1000. What takes us 3 hours with three guys to do may take a customer days. Around here customers are more than happy to pay big $ for clean ups. They know its back breaking work.
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^ One of the best posts in this thread. In MN we have lots of properties that are covered in large Oaks and Ash, they drop TONS of leaves. I'd say 60% of the clean ups we did this fall were on properties up to half an acre but had lots of large trees and the leaves covered the entire property and most people don't want to try to rake or bag with a push mower. Prices for a clean up only ranged from $100 - $400+. We aim for $75/man hour on site, and sometimes include drive time if it's further than 10 mi away (furthest we'll go is 15 mi).
No billing by the hour, if it is a new client, I'll drive to the property and take a quick look (5-10 min) and have a very good idea of how long it'll take us and email an estimate/quote over to them within 12-24 hours of the initial call with a price. The speed of getting back to prospects definitely affects your chances of landing the job. Earlier this spring when we were swamped and working 12+ hrs a day in the field I was in the office another 3-4 hours/day on top of that I was a little sluggish on getting back to people with quotes, especially on the larger landscape installs and it may have contributed to not landing them however the price may have more to do with it than that.
For clean ups we use the equipment listed in my signature. Handhelds are not listed but Echo PB770s for blowers, Stihl HS 45s for cutting back perennials. Next year I plan to add a second truck, a dump trailer and a leaf loader to increase efficiency.
The only thing that I'll price hourly is plowing & shoveling. Otherwise it does not make sense to quote hourly as a lawn/landscape business.
Originally Posted by A. W. Landscapers, Inc.
This is so true.
Several years ago I had a price shopper make the comment, "that's what my lawyer charges an hour." I told him, "if your lawyer's rates are that low, you need a better lawyer."
There are a lot of people that simply do not make the connection that hiring a business at a rate of $60 an hour is not remotely close to paying an employee $60 an hour. There are also a lot of people who believe that if they pay you in cash the job should cost them less, because they think you are as dishonest as they would be if someone paid them cash for a job.
I can't stand people like that. As a young business owner, I want to have as much on the books as possible to post a high profit (yes, I know I'll pay more in taxes) however I need to in order to get a loan for a house w/ land and continue to grow my business. Not to mention being able to get a loan for more equipment & trucks. Contrary, cash is nice to have to spend on fun however my mindset right now is getting as much of my debt paid off as fast as possible to be in a better position to qualify for the loans as I described above.
'01 Chevy 2500 HD ECLB w/ 8.1 - 06 Tow Mirrors, 285s, 17" MB Chaos Wheels, Torsions Cranked, Airlift Airbags
2014 Diamond Cargo 8.5' x 20' Enclosed Trailer - Fully Loaded Interior
Exmark Lazer Z X-Series 52" w/ Ultravac
Exmark TTHP 36"
225 Gal MN Wanner Skid Sprayer
8' Boss RT3 Straight Blade
Graduate - Anoka Technical College w/ Associate's in Hort/Landscape - May 2013
In business since Feb 2011
23 Years Old
When you have systems, you have control.