Leaf Removal?

[derbydon]

Here's why:

Example: 1 acre property, heavy leaves, customer requires removal - not mulching.

Company A (me, lol) comes in with 3 guys, boxed trailer, debris loader, mower w/ leaf pusher. Removes leaves in about 1 1/2 hours, for 4 1/2 total man hours at $30/m hr for $135 total.

Company B (you) charges same $30 per hour. Using rakes, blowers and loading by hand on to trailer, then tarping, then dumping and coming back for a second load maybe takes 2 guys 5 hours for a total of 10 man hours. Total charge of $300.

Customer talks to neighbor down the street who paid $135.....you see my point.

What is the market rate for leaf removal in your area for comparable lawns?

By the way, I think leaf removal is worth more than $30 per man hour. That's just about the bare minimum I'm willing to fire up the truck for in the morning.

[gdavidson]

I always do leaf clean up by the hour to avoid any issues with a customer feeling that we need to spend more time or return for leaves that have blown in. Early in my career I made the mistake of setting a price for leaf clean up only to have customers calling me back out for leaves that blew in. Now I give them an estimated amount of time that it should take by how long it takes my guys to blow leaves, how many square feet my machine on my tractor can vac before needing dumped or sucked into our leaf truck. Then the time per dump that it takes to dump them in the woods or vac them into our truck. I also charge a dump fee for leaves and debris that must be removed from property.

[slapon]

Originally Posted by derbydon

Here's why:

Example: 1 acre property, heavy leaves, customer requires removal - not mulching.

Company A (me, lol) comes in with 3 guys, boxed trailer, debris loader, mower w/ leaf pusher. Removes leaves in about 1 1/2 hours, for 4 1/2 total man hours at $30/m hr for $135 total.

Company B (you) charges same $30 per hour. Using rakes, blowers and loading by hand on to trailer, then tarping, then dumping and coming back for a second load maybe takes 2 guys 5 hours for a total of 10 man hours. Total charge of $300.

Customer talks to neighbor down the street who paid $135.....you see my point.

What is the market rate for leaf removal in your area for comparable lawns?

By the way, I think leaf removal is worth more than $30 per man hour. That's just about the bare minimum I'm willing to fire up the truck for in the morning.

derbydon,

I think you might be undercharging the customer if you're going to bill the same amount as someone that does not use the equipment you use. Here's the reason, all of that equipment you are running has a cost to acquire and maintain. I would suggest you add your direct fuel cost and average maintenance cost to the hourly fees you are charging, as well as something to cover the cost of equipment you are using. Typically, you could use a rate similar to what you might be able to lease the equipment for or whatever other financing cost may be associated with the acquired equipment. Otherwise, several years down the road, you may not have sufficient capital available to replace the equipment that will eventually wear out.

[Big Bad Bob]

Originally Posted by slapon

derbydon,

I think you might be undercharging the customer if you're going to bill the same amount as someone that does not use the equipment you use. Here's the reason, all of that equipment you are running has a cost to acquire and maintain. I would suggest you add your direct fuel cost and average maintenance cost to the hourly fees you are charging, as well as something to cover the cost of equipment you are using. Typically, you could use a rate similar to what you might be able to lease the equipment for or whatever other financing cost may be associated with the acquired equipment. Otherwise, several years down the road, you may not have sufficient capital available to replace the equipment that will eventually wear out.

That's what's wrong. Some people don't realize their real cost of doing business.

[bbo]

That is what my old boss did before I started my own company. The problem I am having is, how much to price a job? Do I price it by the hour after the initial mow?

[slapon]

Originally Posted by bbo

That is what my old boss did before I started my own company. The problem I am having is, how much to price a job? Do I price it by the hour after the initial mow?

I would look at it as what is fair compensation for your time or your employees' time, regardless of the equipment you are using, given, in your case, the expertise you bring to the engagement. Your time has value, so put a price on it. From there, everything is added on to your hourly rate for labor. Price out the equipment you are using and add that cost for the time it is being used in that engagement. Fuel and other direct cost should be added.

For larger equipment, it is often useful to do a cost analysis before plopping down a ton of money. Take a leaf vac, for example, and assume it costs $10,000 to acquire and its useful life may be five years and you can borrow funds at 8%, your monthly payment would be approximately $202. Add in anticipated maintenance and replacement parts. Also include fuel and other direct costs. Take those costs and allocate them over the average time you spend on each engagement relative to all work engagements you anticipate that month using that equipment.

Now, the expenditures may increase your cost of service per hour, but the efficiency in which you get your work done should offer some considerable savings in time. So, time savings could offset higher hourly cost of service. If you cannot justify the additional hourly price you would have to charge the customer, offset by the time savings, then the purchase may not be worth it. So, let us say prior to acquiring equipment you are charging $30 per hour to clean up leaves and a job takes six hours. Your price for doing the job is $180. If you were to acquire a leaf vac, let us say that after allocating your costs for the job, your price per hour is now $55, but you can complete the job in 3 hours. Your price for the job is now $165. The customer is better off because he or she is being charged less overall and you are better off because you are still being compensated your $30 per man hour, equipment cost is being covered, and you finish the job in 3 less hours, meaning that you can fit more jobs in an 8+ hour work day. On the other hand, it may not be worth getting the leaf vac if the hourly costs are or the time it takes to finish the job is greater than the three hours.


In essence, get a handle on all the costs of running your business in the best detail that you can and appropriately allocate those costs relative to the business engagements you have. It will help you manage and price your services much better. Hope that helps.

[Big Bad Bob]

Originally Posted by slapon

I would look at it as what is fair compensation for your time or your employees' time, regardless of the equipment you are using, given, in your case, the expertise you bring to the engagement. Your time has value, so put a price on it. From there, everything is added on to your hourly rate for labor. Price out the equipment you are using and add that cost for the time it is being used in that engagement. Fuel and other direct cost should be added.

For larger equipment, it is often useful to do a cost analysis before plopping down a ton of money. Take a leaf vac, for example, and assume it costs $10,000 to acquire and its useful life may be five years and you can borrow funds at 8%, your monthly payment would be approximately $202. Add in anticipated maintenance and replacement parts. Also include fuel and other direct costs. Take those costs and allocate them over the average time you spend on each engagement relative to all work engagements you anticipate that month using that equipment.

Now, the expenditures may increase your cost of service per hour, but the efficiency in which you get your work done should offer some considerable savings in time. So, time savings could offset higher hourly cost of service. If you cannot justify the additional hourly price you would have to charge the customer, offset by the time savings, then the purchase may not be worth it. So, let us say prior to acquiring equipment you are charging $30 per hour to clean up leaves and a job takes six hours. Your price for doing the job is $180. If you were to acquire a leaf vac, let us say that after allocating your costs for the job, your price per hour is now $55, but you can complete the job in 3 hours. Your price for the job is now $165. The customer is better off because he or she is being charged less overall and you are better off because you are still being compensated your $30 per man hour, equipment cost is being covered, and you finish the job in 3 less hours, meaning that you can fit more jobs in an 8+ hour work day. On the other hand, it may not be worth getting the leaf vac if the hourly costs are or the time it takes to finish the job is greater than the three hours.


In essence, get a handle on all the costs of running your business in the best detail that you can and appropriately allocate those costs relative to the business engagements you have. It will help you manage and price your services much better. Hope that helps.

Absolutely. That's why we can't tell you what to charge for a particular job. It is up to you, as the owner, to do the math.

[Florida Gardener]

I'm in s Florida so leaf cleanups are foreign to me. What I mean is that we pretty much deal with leaves throughout the winter. I go to all my accounts except for 2 every week in the winter so if there are leaves, they get mulched on the week I cut, and raked and bagged on the off week. This way, it's not a huge cleanup. I factor in the time in the monthly price, and the homes always look clean. I run mulching kits and plates on my mowers year round especially for leaves. Taking and bagging is such a time killer. Blowing leaves into the grass and mulching is the way to go.
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